Alex Salmond and Nicola Sturgeon are guilty of a gross dereliction of duty in campaigning to remove Scotland from the Union without a Plan B for currency. They must now accept that an independent Scotland will not be welcome at the table. Quite simply, the main UK parties are correct to rip the case for separation to shreds. This is not bullying, it is harsh reality.
The Yes campaign must have the courage of its separatist convictions and put forward a case for genuine independence. In that way, the Scottish people can make a proper choice, based on facts rather than flim-flam.
The only option open to an independent Scotland will be a new Scottish currency. Quite how this would be viewed upon the world economic stage is anyone’s guess. If Ms Sturgeon carries out her threat of refusing to accept a representative portion of UK national debt upon separation, then an independent Scotland would be shunned by the world financial sector: a micro state, with a Monopoly-money currency, and a substantial default on its debt. What a genuinely appalling prospect. The case is straightforward, as it always has been: Independence is unachievable, undesirable, and unworkable.
The UK is one of the strongest countries in the world, and the Yes campaign would seek to tear it apart for the sake of out-dated nationalist dogma. Scotland deserves better.
West Balgrochan Road
Torrance, East Dunbartonshire
THE independence debate, with only seven months to go until the referendum, appears to have come down to the question: “Do we wish to keep the pound in our pockets?”
Currency unions, without political and fiscal union, do not really work. We just need to look at the eurozone, where GDP growth is at 1 per cent, and inflation keeps falling, and is now just 0.7 per cent, threatening deflation. Worst of all, unemployment is more than 12 per cent for the eurozone as a whole, some 5 per cent higher than the UK rate.
For many countries in the eurozone unemployment rates are far worse, more than 20 per cent with youth unemployment more than 50 per cent.
It defies belief that the SNP wishes to destroy a working and successful currency, fiscal and political union in the UK and replace it with a failing eurozone model, whereby there is monetary union but no fiscal or political union.
Ireland, the former Celtic Tiger, is one such country suffering under this yoke, the single currency of Europe. If Scotland had been an independent country in 2007-08 it too would be bankrupt.
I believe the only way an independent Scotland could possibly succeed is by having its own currency.
However, the creation of a Scottish currency, let us call it the Scottish crown, might lead to depreciation against the pound. It is not beyond the bounds of possibility that it would quickly be worth the old sterling crown, or 25p in new money.
This would mean that Scots would see their loan and mortgage debt rise if they maintained these in the old currency. To avoid this, many would try to switch the debt to the new currency.
However, in the event of a Yes vote, the currency markets will exact a heavy price. UK ten-year gilt interest is presently 2.7 per cent. That could easily jump to say 5 per cent, taking mortgage and loan rates with it. The borrowing costs would probably be much higher in our new currency. The economic risks will compound as the prospects of lowering income, increasing debt, capital flight and higher inflation develop.
The risks cannot be exaggerated. An independent Scotland would have a small and reducing impact on the world stage and face the high possibility of having a struggling new currency, with borrowing costs to suit the new situation, putting Scotland at the mercy of the bond market.
The SNP is more or less guaranteeing a monetary union, which the Chancellor has now ruled out. Where is the Plan B? The SNP is in denial because the implications are terrifying. Perhaps anyone who is thinking of voting Yes, needs to ask themselves in the voting booths come September: “Do I feel lucky?”
Peter D Robertson
Galashiels, Scottish Borders
IS THE spirit of the Edinburgh Agreement dead in the light of Mr Osborne’s speech about Scotland not becoming part of a formal currency union?
Many people were sceptical about the fine words about “respect” by both Holyrood and Westminster governments for the referendum outcome. They have cause to be really cynical now.
A number of questions need to be asked about whether the Chancellor has the right to make such a statement without the authority of the House of Commons. Even although the Chief Secretary to the Treasury (Liberal Democrat Danny Alexander) and the shadow chancellor (Labour’s Ed Balls) have lined up behind him, it might be useful for this matter to be given a parliamentary hearing.
Many voters north of the Border might need some reassurance that ministers are not treating them with total disdain.
If a determination by Westminster to keep an independent Scotland out of a sterling zone is paramount, then let’s hear all the reasons for it.
I suspect the truth is that this is simply a hardball negotiating stance by the Treasury. The Yes campaigners must know too that unless they win decisively in September, their chance of getting much out of the ensuing negotiations is very limited.
Chancellor George Osborne is certainly demonstrating the spirit of Buccaneering Britain: conclude the outcome, sign the contract but skip the negotiation.
His interpretation of the constitutional position relies on the interpretation proposed by Crawford-Boyle (in HMG Cm 8554, February 2013), which in turn offers an uncertain rationalisation of the evidence, based on selective precedents and realpolitik: Crawford-Boyle does not even discuss the only reason that both the Scottish and UK governments have already negotiated with such suave facility the continuity of rUK (rest of the UK) as the continuing UK state: there is no other safe way to deal with £1.4 trillion of national debt that would otherwise fall due.
This is how mutual agreement works. Mr Osborne is attempting to present a false picture of reality, but which both wisdom and Crawford-Boyle emphasise can only be established by “mutual agreement”. If he now chooses to rule by decree and discard mutual agreement he will open a can of worms that he will be powerless to close.
John S Warren