The people of Scotland are around 40 days away from making a momentous decision - to remain part of the United Kingdom or to become an independent nation. The referendum question is straightforward enough but as with such things, the devil is in the detail.
In this case, there are more than a few unanswered questions and the recent TV debate between the leader of the pro-independence Scottish Nationalists, First Minister Alex Salmond and the leader of the Unionist Better Together campaign, Alistair Darling, did nothing to resolve the key ones.
I will declare an interest at the outset. I sincerely hope that the Scottish people vote to remain within the United Kingdom. So if my comments seem somewhat slanted you will perhaps understand.
I live overseas and didn't manage to view the debate but by most all accounts, Alastair Darling and the Vote No campaign, won the debate in terms of people's pre and post views on how they would vote. Certainly amongst the 15% or so that are 'undecideds'.
The reason for the 'No' victory is, I believe, due to the lack of answers, from Alex Salmond, on key issues.
What currency will Scotland have after independence? Alex Salmond is insistent that it will be the existing Pound Sterling. The UK political parties, in a rare show of unanimity have said that this will not be possible. That the UK will not enter into the required currency union, with a post-independent Scotland. You might think that the UK is being petty and peevish by such actions. Maybe even that they are a poor loser, however, this is the stated policy of all of the major UK parties. We know that politicians usually have only a limited attachment to the promises that they make but I think that the very public and very united approach that they have taken to this one, would mean that reneging on it would be very difficult. Critically though, as I posted here , the Scottish Nationalists have no Plan B.
Alex Salmond has pinned his colours to the mast and said that Scotland will use the Pound Sterling. That's it. All the ramifications of this? Scotland will use the Pound Sterling. What kind of independence is this, when economic policy is effectively decided by another country? Scotland will use the Pound Sterling. How will Scotland use the Pound Sterling - or as Salmond now likes to call it, the Scottish Pound! - when the rest of the UK says no? Scotland will use the Pound Sterling!!
Another unanswered question which, to my mind is inextricably linked to the currency question is membership of the European Union. Comments from European Commission leaders and European political leaders have not endorsed, for one minute, the Independence campaign's assertion that a newly independent Scotland would automatically be a full member of the EU. Some have gone further and indicated that Scotland would need to apply for membership and go through the lengthy process of candidacy. What is clear though, is that any new member of the EU is expected to adopt the Euro currency so where would that leave Alex Salmond's 'Scotland will use the Pound Sterling' assertion?
The third unanswered question, also linked to currency, relates to debt. As in how much debt would the newly independent take-on from the United Kingdom. Most pundits expect that it would be somewhere in the region of 8-10% of the UK National Debt as these numbers represent the relative share of UK population and GDP. When Czechoslovakia split-up in 1992, population was the basis used as the measure. this doesn't seem unreasonable. Speaking of Czechoslovakia, they too had the currency dilemma. Their solution was to continue with the existing currency - score one for Alex Salmond - however, within a matter of months, two currencies were developed and the initial equality of exchange rate, soon fell away.
Linked to debt is the question of future liabilities. This mainly relates to state benefits such as state pension. These are largely unfunded and so paid out of current national income. Scotland has something of a demographic time-bomb with its population aging being a greater proportion of the overall population, than occurs in the rest of the United Kingdom. Does this get taken into account? It certainly doesn't seem to have been considered by the pro-Independence politicians, who promise ever greener pastures and higher pensions in the free Scotland utopia that will come to be!
These are critical questions that need to be answered. I doubt that they will be, during the coming six weeks - Alex Salmond will continue to rely on the 'heart' ruling the 'head' and winning because of that. I sense though that the consistency of the No vote, in polls - always more than 50% - is because people, while liking the idea of an independent Scotland, realise that the actual notion has just not been properly thought through. I suspect this is because, on an economic basis, the arguments simply don't stack-up - that Scotland is better-off, financially speaking, as a member of the United Kingdom.
Three other things to think about, this morning.
You will notice, after Salmond's less than stellar performance in the TV debate, that people in the Yes campaign are starting to distance themselves and the campaign, from Salmond. Things are being said such as 'Salmond isn't the leader of the Vote Yes campaign' and so on. Complete hogwash! Say what you like about Salmond but please don't try to kid people that he has been anything other than at the forefront of the campaign for an independent Scotland for the last 30+ years. And, frankly, he has been resolute in pushing the independence agenda. Alex Salmond and the Scottish Nationalist Party continue to lead the Vote Yes campaign and don't let anyone try to tell you otherwise.
One worrying thing that is now on the horizon is the suggestion that the UK Parliament will grant extra powers over taxation and some other matters, to the devolved parliament in Scotland, should Scotland vote to remain in the United Kingdom. This is absolutely the wrong way to proceed. It is wrong to seek to bribe the people of Scotland and it is wrong to continue to penalise the people of England. Post the 2015 General Election, the so called Barnett Formula, which is used to apportion government spending, must be changed and Scotland cannot be 'ring-fenced' from the effects of such change.
I posted here about the possibility that the Shetland Islands might seek independence from Scotland and take-away with it, all of that oil wealth that the mainland so desperately needs. What then for an independent Scotland.
Scotland should vote No!
In this case, there are more than a few unanswered questions and the recent TV debate between the leader of the pro-independence Scottish Nationalists, First Minister Alex Salmond and the leader of the Unionist Better Together campaign, Alistair Darling, did nothing to resolve the key ones.
I will declare an interest at the outset. I sincerely hope that the Scottish people vote to remain within the United Kingdom. So if my comments seem somewhat slanted you will perhaps understand.
I live overseas and didn't manage to view the debate but by most all accounts, Alastair Darling and the Vote No campaign, won the debate in terms of people's pre and post views on how they would vote. Certainly amongst the 15% or so that are 'undecideds'.
The reason for the 'No' victory is, I believe, due to the lack of answers, from Alex Salmond, on key issues.
What currency will Scotland have after independence? Alex Salmond is insistent that it will be the existing Pound Sterling. The UK political parties, in a rare show of unanimity have said that this will not be possible. That the UK will not enter into the required currency union, with a post-independent Scotland. You might think that the UK is being petty and peevish by such actions. Maybe even that they are a poor loser, however, this is the stated policy of all of the major UK parties. We know that politicians usually have only a limited attachment to the promises that they make but I think that the very public and very united approach that they have taken to this one, would mean that reneging on it would be very difficult. Critically though, as I posted here , the Scottish Nationalists have no Plan B.
Alex Salmond has pinned his colours to the mast and said that Scotland will use the Pound Sterling. That's it. All the ramifications of this? Scotland will use the Pound Sterling. What kind of independence is this, when economic policy is effectively decided by another country? Scotland will use the Pound Sterling. How will Scotland use the Pound Sterling - or as Salmond now likes to call it, the Scottish Pound! - when the rest of the UK says no? Scotland will use the Pound Sterling!!
Another unanswered question which, to my mind is inextricably linked to the currency question is membership of the European Union. Comments from European Commission leaders and European political leaders have not endorsed, for one minute, the Independence campaign's assertion that a newly independent Scotland would automatically be a full member of the EU. Some have gone further and indicated that Scotland would need to apply for membership and go through the lengthy process of candidacy. What is clear though, is that any new member of the EU is expected to adopt the Euro currency so where would that leave Alex Salmond's 'Scotland will use the Pound Sterling' assertion?
The third unanswered question, also linked to currency, relates to debt. As in how much debt would the newly independent take-on from the United Kingdom. Most pundits expect that it would be somewhere in the region of 8-10% of the UK National Debt as these numbers represent the relative share of UK population and GDP. When Czechoslovakia split-up in 1992, population was the basis used as the measure. this doesn't seem unreasonable. Speaking of Czechoslovakia, they too had the currency dilemma. Their solution was to continue with the existing currency - score one for Alex Salmond - however, within a matter of months, two currencies were developed and the initial equality of exchange rate, soon fell away.
Linked to debt is the question of future liabilities. This mainly relates to state benefits such as state pension. These are largely unfunded and so paid out of current national income. Scotland has something of a demographic time-bomb with its population aging being a greater proportion of the overall population, than occurs in the rest of the United Kingdom. Does this get taken into account? It certainly doesn't seem to have been considered by the pro-Independence politicians, who promise ever greener pastures and higher pensions in the free Scotland utopia that will come to be!
These are critical questions that need to be answered. I doubt that they will be, during the coming six weeks - Alex Salmond will continue to rely on the 'heart' ruling the 'head' and winning because of that. I sense though that the consistency of the No vote, in polls - always more than 50% - is because people, while liking the idea of an independent Scotland, realise that the actual notion has just not been properly thought through. I suspect this is because, on an economic basis, the arguments simply don't stack-up - that Scotland is better-off, financially speaking, as a member of the United Kingdom.
Three other things to think about, this morning.
You will notice, after Salmond's less than stellar performance in the TV debate, that people in the Yes campaign are starting to distance themselves and the campaign, from Salmond. Things are being said such as 'Salmond isn't the leader of the Vote Yes campaign' and so on. Complete hogwash! Say what you like about Salmond but please don't try to kid people that he has been anything other than at the forefront of the campaign for an independent Scotland for the last 30+ years. And, frankly, he has been resolute in pushing the independence agenda. Alex Salmond and the Scottish Nationalist Party continue to lead the Vote Yes campaign and don't let anyone try to tell you otherwise.
One worrying thing that is now on the horizon is the suggestion that the UK Parliament will grant extra powers over taxation and some other matters, to the devolved parliament in Scotland, should Scotland vote to remain in the United Kingdom. This is absolutely the wrong way to proceed. It is wrong to seek to bribe the people of Scotland and it is wrong to continue to penalise the people of England. Post the 2015 General Election, the so called Barnett Formula, which is used to apportion government spending, must be changed and Scotland cannot be 'ring-fenced' from the effects of such change.
I posted here about the possibility that the Shetland Islands might seek independence from Scotland and take-away with it, all of that oil wealth that the mainland so desperately needs. What then for an independent Scotland.
Scotland should vote No!
'You might think that the UK is being petty and peevish by such actions'
ReplyDeleteYou'd be wrong.
If Scotland votes for independence the UK's responsibility is to its own population, not to those of a foreign power.
And the UK should not take on responsibility for the debts of a foreign power over which it has no control. Without such responsibilities a 'currency union' is meaningless.
Sorry, not sure what is your point.
DeleteI have posted many times on this subject and my consistent opinion is that if Scotland votes for independence, then Scotland must take on a reasonable proportion of the UK debt mountain. How pension liabilities are settled, I do not know. Maybe just pick a point in time and say if you are resident in Scotland at that time, they are responsible for your state pension and if in RoUK, then they are responsible.
A currency union would mean that rUK would become lender of last resort for Indy Scotland incurred debts. Otherwise the union is worthless and markets would judge it as such.
ReplyDeleteAnd that is why rUK cannot allow such an informal currency union as Salmond is suggesting. It is a strange kind of independence that Salmond & Co are offering - throw off the yoke of a UK parliament and then be ruled by that same parliament as regards fiscal policy and the EU as regards everything else (assuming Scotland gains membership). Exactly who are they gaining independence from?
Delete