Friday, 13 January 2012

Fair shares

As the London media tries to play catch up on the independence issue, we are starting to see many of the old hoary issues resurrected.

One, of course, is currency. What currency would an independent Scotland use?

Scotland already has a currency - its called the pound, aka sterling, aka £. On independence day that will remain our currency.

Lets be clear, the London government doesn't have exclusive ownership. It is as much our currency as it is the rest of the UK's. Any suggestion that a Tory government in London will have to give us permission to use sterling is just absurd. Decisions on sterling's future use will not be for London to take unilaterally, they will be for Scotland and the rest of the UK to take together.

And what about the Bank of England, aka the UK's central bank? Some might argue that because a Scot created it, we should take ownership after independence . . . but that wouldn't be fair!

The UK's central bank is something Scotland and the rest of the UK own together - we must not forget that. This means the rest of the UK does not have exclusive rights to the institution, or an exclusive say on its future. The Bank of England was a private company nationalised after the Second World War. Scotland will be entitled to its share of this asset and, as 'part-owner', Scotland will be entitled to representation (something we don't have just now).

An independent Scotland doesn't start from scratch. We already have everything we need (or a share of everything we need). We are entitled to a fair and equitable share of the assets and are responsible for a fair and equitable share of the liabilities we have built up together.

What we won't have a claim to is those assets that nature has bestowed on the rest of the UK. The coal under Yorkshire or Wales was not put there by the Union. Scotland has no claim to it. And the Union didn't put oil and gas under Scottish waters, so, quite simply, the rest of the UK has no claim to that.


  1. Hi Stephen, think you're talking a lot of sense here.

  2. Great post.

    I'm slightly gobsmacked - this post makes an unbelievably good point that hadn't occurred to me before. I guess the assumption that UK=England is too ingrained in my psyche.

  3. A very, very good point there Stephen. We need this to be propagated into the popular debate, because already we've got Osborne saying England might not "let" Scotland keep the pound.

    Misinformation is our enemy here, because we already know we have facts on our side.

  4. Scenario: immediately after independence, rUK adopt a new currency starting at 1:1 parity to the GBP, leaving us with the old GBP as a de-facto Scottish Pound.

    I have no idea if that is a plausible scenario.

  5. It's very important that the Scottish people are made aware of the real asset/liability facts before the Ref.

    I know I should have expected it, but I'm still incredulous how the London set are playing this. They really are treating it like Scotland is either a client state or a colony!

    I've read many things about how the British empire used to operate, but to see the beginnings of a well worn strategy happening to your own country, well that's different. It needs exposed, and I imagine it will be, in good time.

    Scotland is in a treaty with England - nothing more. The rest of the UK doesn't 'allow' or 'grant' anything to Scotland, because Scotland IS the UK, as much as anywhere else. When a treaty is revoked, negotiations over joint assets begins.

  6. Of course you can't guarantee any of that - and if an independent Scotland were to join the EU, it is not realistic to think that it would just carry over all the UK opt outs. Chances are we'd either have to join the Euro or not be part of the EU.

    People need to understand definitively, before they vote in the referendum, what independence will mean to their everyday lives.

  7. As I've demonstrated in a previous blog, Scotland would not be forced to join the euro. We would have a point of choice, and of course it would be for the people to decide in a referendum, which is also Lab and LD policy for the UK. This position on the euro is what EU law clearly states.

    On EU membership, again EU law, rather than politically-inspired fear mongering, makes clear Scotland will not be thrown out of the EU on independence. We will remain part of the EU. I've also written a previous blog post setting out the legal position.

  8. Re the Euro. It is true that all new EU members have to commit to joining the Euro, but it is doubtful if Scotland would be a "new" member, given that we are already in the EU. More importantly, however, the rules state that no country can join the Euro without first joining the Exchange Rate Mechanism, and membership of ERM is completely voluntary. This is the route Sweden has followed - stay out of ERM and you can never join the Euro! One further point, unless Scotland adopts its own currency it can never join the ERM (as it would have no currency to peg to the Euro) and therefore can never join the Euro!

  9. Excellent article Stephen, I've often thought along similar lines when people asked how we would fund all the new embassies we'd need...erm, we already have them (or at least a share of them). But you're absolutely right that the same logic extends to many other things, including the BoE.

    Caron, the noises I hear from Europe following Cameron's veto a few weeks ago make me think that an emasculated England would be very popular indeed in Europe. Even if only for that reason the powers that be in the EU might decide to be very amenable to an independent Scotland.

  10. Great post, which was referenced by one of your readers on Munguin's Republic.

    All totally logical. The "you'll have to join the €" scaremongers are really just being ridiculous.

    Even Sweden does not HAVE to join the € until its currency and economic cycle meet the €'s. Given Sweden's economy and the Eurozone economy will probably never meet, Sweden will probably have its kroner in 20 years time.

  11. Why is it not realistic to think that Scotland wouldn't carry the EU opt-outs that Scotland as part of the UK made, Caron?

    Scotland signed these things. Some of them were signed by Scotsmen, Blair and Brown. They are as much Scottish as they are English. England doe not equal the UK.

  12. There are many things that are assumed that are not born out by the truth and the law. On independence day the union ends. There were ONLY two signatures on the Treaty of Union. Thus there is NO rump UK. Just adivorsce between two equal sovereign nations. But wait! If there is no more UK What happens to Wastemonster? The cold fact is that the Building was purpose built with UK tax money and is NOT English and England has neither an elected parliament a treasury ora state bank. No one can legally run England as the Civil Servants are UK employees. The legal thing is Her Majesty must summon someone and request that they form Her Majesty's English Government. She cannot call upon the UK civil service to advise her. Perhaps she might even call Alex Salmond to form her Majesty's English Parliament. Oh! Dear!

  13. Apologies for the delay in putting comments up. I've been away for a few days and so only limited internet access.

  14. It is also important that the unionist parties start to think about what their positions will be on defence, currency and other matters. They have to be challenged on their preferences; they can't just keep saying they'd prefer the status quo.

  15. "how we would fund all the new embassies we'd need"

    I didn't realise that embassies were loss making enterprises. That's the last time I take Sid Meier's Civilisation seriously.

  16. AnonymousJan 16, 2012 11:50 AM.

    Your last comment was very funny and should go down well repeated on the Telegraph comments,lol.

  17. Excellent blog site Stephen - thank you - keep up the good work!

  18. What happens to the national grid? Do we take the plug out at the border. Was that not built with U.K. monies?

  19. I am so happy to see that there are people out there who are fully capable of combating the drivel that comes from the UK politicians and UK media about this topic.

    Thank you sir for weighing in on this.

    Scottish Referendumn and why it might fail

  20. Excellent piece and I will give the Telegraph readers something to think about reading this article and postings.

  21. Sorry, what a lot of rollocks! Correct that a negotiated portion of asset and liability would be shared; but the strength of a Central Bank is dependent on the strength of the economy it make monetary decisions for and the strength of currency it supplies to that economy.

    So after an Independent Scotland the idea that an independent Scotland would have influence over the Central Bank for what will be the rest of the UK is laughable.

    Thus is an embarrassing blog - u are normally good, and with sharper argument. Sort it out!!!! Plenty of arguments for independence, this isn't one Stephen!

    1. Sorry ,your comment is laughable.

      This blog simply tells the truth about the lies peddled in the media.

      THE TRUTH does it hurt!!!!

  22. Nice in theory, but all that would happen would be that rUK gives Scotland it's share of BoE assets (and national debt) and waves cheerio. Absolutely no chance, and I mean no chance, that rUK would agree to Scots representation on a central bank without a central UK government maintaining full fiscal powers for the whole economic area covered by the bank's currency remit.

    For anyone to try and claim otherwise, when we are witnessing the economic disasters caused in the Euro zone by currency union without fiscal union is extremely lazy thinking.

    Scotland could keep the pound, it could peg to sterling, but it will never have a say in setting sterling interest rates, unless it relinquishes tax and spend powers. Suggesting anything else is a complete fallacy. In no way does this mean an independent Scotland is not viable, but you need to get used to the fact that independence means independence - not independence, but hanging on to the bits you like.

  23. Incidentally I forgot to mention the balance of power in the negotiations. What is happening in Europe today tells us how critical a lender of last resort is to the banking sector. If independent Scotland wants to keep the pound, all the BoE needs to do is refuse to act as your LoLR and you don't have a functioning banking system. Your negotiating powers are virtually nil against this, and you wouldn't even be able to use pounds without rUK compliance - think about who prints pounds, and where those nice crisp new notes you get from cash machines comes from. We turn the taps off - no cash in Scotland.

    I'm ambivalent about independence - could be good, could be bad, but the sloppiness and lack of honesty really needs to be addressed (on both sides). Treat the Scottish people with a bit more dignity and stop hiding from the problem issues.


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