Readers' Letters: Losing Independence referendum saved Scotland from austerity

I was interested to read Jim Finlayson’s letter (April 10) in which he said that in the independence referendum of 2014 the Better Together group erroneously argued that Scotland would have had relatively high interest rates post-independence, comparable, if not greater, than that of Greece in 2009 onwards. As someone who made such an argument in 2014, I feel I must point out why that would have been the case.

In 2014 proponents of independence argued that Scotland would continue to use the pound sterling, either formally or informally, post-independence. Such a currency regime is classed by the International Monetary Fund as a rigidly fixed form of exchange rate regime, which means a country using such a regime cannot alter its competitiveness by changing its exchange rate.

Historically Scotland has been running an average current account deficit of around 10 per cent of its GDP. This is a big number and with the exchange rate unable to adjust to improve the country’s competitiveness it would require significant borrowing by the Scottish Government post-independence.

A march in support of Scottish Independence in May 2024 in Glasgow (Picture: Jeff J Mitchell/Getty Images)

However, international investors, recognising that a policy mix of a fixed exchange rate and a large balance of payments deficit are neither credible nor sustainable, would require a significant premium on Scottish issued debt and they would also require a macroeconomic policy mix to address the external balance deficit, which essentially would mean an unprecedent dose of austerity, such as Greece had to endure during its debt crisis.

Anyone who doubts the disciplining power of financial markets when a country’s macroeconomic policy mix is non-credible should recall Liz Truss’s disastrously short reign as Prime Minister and the volte face President Donald Trump has had to make on his disastrous use of tariffs to correct the United States balance of payments deficit.

(Prof) Ronald MacDonald, Adam Smith Business School, University of Glasgow

Stabbed in back?

Chancellor Rachel Reeves advises families and businesses “we have your backs” during Treasury Questions in Parliament relating to Trump’s tariffs (8 April). The irony within that statement is not difficult to gauge! This from a Chancellor who withdrew the winter fuel allowance from pensioners and clobbered farmers with penal Inheritance Tax liabilities, as well as individuals with private pension funds.

Only this week, businesses have been hammered with penal rises in National Insurance rates exactly at the wrong time. One hates to think what might come down the road when the Chancellor decides she no longer believes it appropriate “to have our backs”.

Richard Allison, Edinburgh

Climate clots

The climate change business gives meaning to the lives of many who have never before had an opinion about anything. It is their opportunity to be somebody in the pursuit of something unprovable, with the comfort of knowing they can never be found wrong in their lifetime.

And it is predominantly a hobby of the affluent, with their built-in sense of superiority that allows them to spout nonsense in the face of facts to the contrary. Rather like the religious zealots of the Dark Ages who could say anything to an illiterate population.

And of course, when they say we must stop flying, and driving, and eating meat, they don’t mean we – t hey mean you.

But if these new zealots really believe the world is ending from a surfeit of carbon dioxide, surely they should be promoting carbon-free nuclear energy, or research into things that might save the planet, rather than the nonsense inventions that plague us. But no, it is all your fault, and you must make the sacrifices they dictate. Silly people. Pity many of them are in Government.

Malcolm Parkin, Kinnesswood, Perth and Kinross

Rejected risks

Isn’t it time to stop paying wind turbine owners to stop generating electricity when the grid cannot accept it? Building a turbine is a commercial decision and the business case for each must take into account periods when there is no wind, and times when the grid cannot accept the power produced. These are commercial risks that turbine owners should not be immune from, and it is wrong that electricity customers foot the bill when the grid cannot accept power.

If turbine owners wish to be protected when they are producing energy that cannot be consumed, they must make a commercial decision on whether to build battery storage as part of the business case for the turbine. The UK has some of the highest electricity prices in the world – something that hurts the consumer and, as importantly, burdens industrial users, making their products less competitive – damaging jobs in the process. Time to make turbines stand on their own feet, so to speak!

Brian Barbour, c/o Port Ligar, New Zealand

No chants

Once again we hear offensive football chants. This time sexist chants aimed at the mother of one of the players in the Manchester Derby and at a player’s wife in the Leicester v Newcastle match. In Scotland we have regular bigoted chants from several teams’ supporters. What are the FA and SFA doing about this? Nothing.

There are ineffective measures in place. A stern letter of warning, fines, banning orders for individual fans etc. All have proven ineffective. The answer is simple. Two punishments are all that’s needed.

First, if offensive chants are picked up by an official or police then the club whose fans have done it should be forced to play two games behind closed doors. This would hit clubs in their wallets and is a far more effective financial punishment than a fine.

Second, the club should be docked six points. Then if a team misses out on Championship Europe by five points or less their fans will know it’s their fault.

Of course, the football authorities won’t do this, they are utterly gutless as they have proved time and time again, most recently with their failures to stop fire hazard pyrotechnics into grounds.

Alexander Lunn, Edinburgh

Pay your way

Elderly people feature in the news usually in connection with two subjects. One is the vexed question of social care in an ageing society. The other is that the young are allegedly disadvantaged in various ways, not least in house buying, while older people sit in large expensive houses, often alone.

How different this is from even 60 years ago when elderly parents were often brought into an offspring’s home to see out their later days, while young people acquired mortgages. This was, of course, in the days before mass domestic conveniences and most married women having a career or occupation of their own.

Ian Petrie (Letters, 10 April) writes, “surely funds can be found for the social care of the aged and infirm?” Does this mean he expects the taxpayer to fund the care of all elderly people?

This relates to another hot potato: Inheritance Tax. I hear parents speaking resentfully of their children being expected to pay this on their estate, including their home.

It was all very well for (adult) children to expect to inherit in full from their parents’ estate when they were fulfilling most of the care obligations for their parents. But it is not reasonable for them to expect the taxpayer to fork out when a parent’s home could well pay for a nursing home or other care fees. I certainly regard my house as the source of any future nursing home fees.

It is after that that we need to think about paying for those who do not have the means to pay for social care. But those who have should do so.

Jill Stephenson, Edinburgh

Broken Union

“Throughout history ‘nationalism’ has always led to trouble and strife.” These desperately sweeping words were written by Robert IG Scott in his misguided attempt to sustain a failing Union (Letters, 10 April). Perhaps Mr Scott thinks the world would be a better place if Ireland had remained under British control or if countries such as Ukraine, Estonia, Latvia and Lithuania, had remained in the Soviet Union, or if countries such as Poland, Finland, Czechia and Slovakia had not freed themselves from Russian control.

In today’s supposedly enlightened world military conflict should not be necessary, but as we have seen with Russia’s invasion of Ukraine, and Israel’s ongoing efforts to annex the Palestinian West Bank and Gaza, armed struggle is not always avoidable if basic democratic freedoms are to be preserved.

Perhaps instead of resorting to scare stories Mr Scott can provide a reasonable argument as to why Northern Ireland should have the possibility of a constitutional referendum every seven years but the people of Scotland not have the same right, even if the majority of MSPs in Scotland’s directly-elected Parliament consider it’s time to move on from a broken Union.

Stan Grodynski, Longniddry, East Lothian

Tartan tat

I felt no sense of pride in the country I love, watching the kilted First Minister, John Swinney, and a US citizen/actor, Alan Cumming. prancing along in the recent Tartan Week jolly in New York.

In fact, it brought on a sense of shame.

There is something about nationalism that turns reasonably normal, functioning Scots when abroad into this kind of tartan demagogue and does nothing but lessen their cause, whatever that may be.

Finally, I wish they could do without sending the bill for it all to the people of this country.

Alexander McKay, Edinburgh

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