Compelling reasons to keep sterling

John Cameron and David K Allan (Letters, 25 April) seem to ignore the fact that no developed country has complete freedom over its fiscal policies. An example of this can be seen in pressure exerted by the IMF on Chancellor George Osborne over the size of the UK’s massive debts.

Rather than Osborne playing with fire and trying to bully Scotland, the rest of the UK would be wise to prefer a continuing sterling zone to any of the other options that would be available to an independent Scotland.

There are compelling reasons to retain sterling, at least initially, as £45 billion of trade flows between Scotland and England every year and businesses, in England and Scotland, will want to continue to trade in sterling.

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Scotland would make an important contribution to a sterling zone’s balance of payments. Our onshore economy exports £23.9bn in goods and services to the rest of the world, while oil and gas production, the vast majority of which occurs in Scottish waters, boosts the UK balance of payments by a further £40 billion.

Given the state of the UK economy, they won’t want to give that up as after independence the UK would have buy oil and gas in US dollars rather than in sterling, thus more than doubling the Rest of UK balance of payments deficit.

If the UK government sticks to the line that an independent Scotland has no right to a share of UK assets, and it is our pound and our central bank as much as it the rest of the UK’s, then the inescapable quid pro quo is that we won’t be liable for any of its debts either.

At present Scotland has no influence whatsoever over the UK Treasury which, understandably, is geared towards the needs of south-east England.

Calum Stewart

Montague Street

Edinburgh

The current furore over whether Westminster would allow Scottish bank notes or indeed sterling to be used in an independent Scotland is quite ludicrous.

Who would not want a modern, energy-rich country like Scotland in their currency orbit?

In fact, several small independent nations share the same currency while retaining flexibility and freedom of action over their own fiscal policy.

Scotland is a rich and desirable country in which to live, work and trade. With magnificent landscapes, an educated workforce, proactive entrepreneurs and a population in good relation to its land, who on earth would not want to invest in such a land?

Devolution has certainly proved that. With limited powers, Holyrood has looked after the NHS, education and the economy far better than the UK administration in Westminster. Since independence releases energy, imagination and enterprise, think how an independent Scotland could flourish with its abundant human and natural resources.

If, however, Scotland requires a new currency, may I suggest the kilo, a known and easy to remember term. We could perhaps set a rate of two pounds to the kilo!

Grant Frazer

Newtonmore

Arguably there would be no positive symbolic merit in a “potential Scottish currency” being called “the bawbee”. Isn’t its meaning a trinket or “a small amount of money” (your report, 25 April)?

Moreover, Professor Kay asserts that “breaking up the financial union had been a major motive for independence”.

Surely independence is about the political shift of “the locus of sovereignty” from Westminster to Holyrood?

This shift in power, “hard, soft or smart”, is fundamental to the aim of achieving independence.

Political transformation will outweigh any noticeable cultural change or bring a different social order.

There will still be a power elite concentrated around politics and money while the remainder forms a “mass society.”

Ellis Thorpe

Old Chapel Walk

Inverurie