Scotland's debt - a question for OAPs

In the independence referendum debate, the SNP have found themselves repeatedly on the back foot particularly regarding post-independence currency.

Nicola Sturgeon, the Deputy leader has repeatedly stated that there is no need for a Plan B, see here for a February 2014 outing on the subject.

Alex Salmond, the leader of the SNP and First Minister of Scotland has belatedly decided he has 3 Plan Bs.  He too was castigated by Alistair Darling in the first televised debate and so came up with not one, not two but three currency plans.  Say what you like about Salmond, he gives you value for money - three plans for teh price of one!  What a man!

Retain Sterling as part of a currency union (something which all three rUK parties have categorically refused to countenance), retain Sterling as some sort of Sterlingization position - where Scotland's monetary policy is then decided in Westminster and not Edinburgh and according to the needs of the rUK economy and not Scotland's or, join the Euro.

My view is that if Scotland votes for independence, then part of the price they will have to pay, to join the European Union, will be to adopt the Euro.

That aside though, John Swinney the Scottish Finance Secretary has weighed-in to the debate and added the full depth of his intellectual prowess.  He has said (and try to hear this without the necessary petulant voice which neatly captures his point) - If Scotland cannot be part of a currency union with rUK, then Scotland will take on none of the UK debt or liabilities. So there, nah, nah, nah!

Consider this though.  Most all governments operate using the debt markets to one degree or another.  Current national debt for the UK is in excess of £1.3 Trillion or 80% of GDP and climbing (this is why George Osborne gets a 'Could do much better' on his end of term report!). For the US the debt mountain is more than $17.8 Trillion for Federal debt or 105% of GDP and a further ~$5 Trillion for debt owed by the individual states.  Germany's debt is around 80% of GDP and that is probably understated when the European Central Bank commitments are properly considered.  Norway is a country much mentioned by Scottish Nationalists.  They too need to go to the debt markets.  Their debt to GDP ratio is in the acceptable 30% range but still the Norwegian government has to borrow.

So, John Swinney's first genius act as the economics guru for Scotland is to send a message to the world of finance that Scotland doesn't pay its debts!  It welshes on them!  It runs away from its obligations! 

So here is question # 1 for Scotland - who do you think will lend you money?  International banks and finance organizations have a thing about debt defaulters - they don't like them.  In fact to go further, they shun them.  Argentina defaulted on its debts and this had two consequences - a great depression which lead to riots and social unrest and hardship and, it could no longer borrow money.  Oh and yes, Argentina has oil as well!

And here is question # 2 - this time for Scotland's pensioners and would be pensioners.  You have paid in to a system, all of your working life but that system was predicated on you getting a pension at a set time in the future.  If an independent Scotland repudiates its debts, who will pay the pensions of Scotland's OAPs?  Certainly not the rUK.  

Think about it, the 'divorce' has become messy and one partner has decided, in a moment of pig-headedness, that they are not paying anything for the mortgage on the house or maintenance for the children - they're offsky!  A little way down the road, this partner realises that they actually need to get a new mortgage and they need a share of the house sale proceeds, to pay their new debts and a house deposit.  They find that they can't get a new mortgage because they have a default against their name and numerous county court debt judgements against themselves, relating to the jointly held debts that they walked away from and even their lawyer tells them they have no chance of getting any help from the former partner, because they can cite abandonment and abdication of fiscal responsibility and so the individual is, if you will excuse the expression, buggered! 

That is the position in which Scotland will find itself, post-independence if they adopt Swinney's policy.

Of course, that all pre-supposes that after a Yes vote, the rUK will allow Scotland to just walk away from its share of debt.  Why should they?  Why should Scotland which has enjoyed and continues to enjoy the fruits of the debt - schools, hospitals, roads, etc., - be allowed to wipe the slate clean.  Need I remind Salmond, Swinney, Sturgeon and the voters of Scotland, that this is a referendum on independence.  All legislation to enact the consequences of a Yes vote must be passed by Westminster.  Can you really see English and Welsh and Northern Irish MPs voting to allow Scotland to walk away 'Scot free' (no pun intended) from its obligations?  Can you?  Why would they agree to burden their rUK constituents with debt for Aberdeen Royal Infirmary or Mrs MacGregor's pension? 

Come to think of it, I don't know why I am so bothered about Swinney's comments unless its just this arrogance that thinks all of the power in this debate, lies in Holyrood.

I hope Scotland votes No on September 18.

Scotland - My View

My heart hopes that the Scots vote to stay in the United Kingdom  - we have a lot of shared history and I believe we are better and stronger, together.

My head says, while I do think we are stronger together, the important thing is to make the decision and then implement whatever that tells us!

Why will it take so long to hold a referendum?

Labour was elected to be the majority party in the UK Parliament, in May 1997,  By September of that year the referendum that established the Scottish parliament was held.  So around 4 months!  The Scottish parliament was up and running by May 1999 or within 2 years

Salmond and the SNP say they prefer a simple In or Out question.  Since they are in charge, in Edinburgh and they reckon they have a mandate, why wouldn't they just go ahead and get this done?

Why would it take 2 1/2 years to get that simple thing done?  Are they going to hand write the ballot papers?  That may keep some folks employed but surely that wouldn't reflect well on Scotland's efficiency!

Scotland and Salmond

It must be terrible for wee Alex Salmond!
He has huffed and he has puffed and he has tried to bring down the Union but for all his bluster we can now see him for what he is - a calculating politician rather than a Scottish patriot.

He wants all of the trappings of being 'El Presidente' but is scared to let go of the apron (and purse) strings of the Union.

He wonders:

"Who will pay, if my independence ploy becomes a folly?  What happens if I upset the neighbors and then when I ask to borrow a wee cup of sugar, they say, 'no more, you borrowed from us, too many times in the past and then just snub us and bad mouth us '? "

"What happens if the ungrateful and unforgiving Scots wake-up and say 'Hold on a minute, we have swapped shared governance  by the 'Brits' and Westminster, to domination by the Germans and French - didn't we fight wars against them, to avoid being ruled by Bonaparte and Adolf?'"

"How, when I know, 100% for sure, that constitutional matters are reserved to Westminster, can I gracefully and face-savingly  back-down?  What words can I use to deflect the Scots from knowing that the accursed Westminster parliament have seen through my plan?  That the public schoolboy running the show is not the easy push-over I took him for"

"I don't think I can win a straight Yes or No question, so how do I 'pull the wool over the eyes of the electorate' and get them to back me going for 'Devo-Max', when it seems that only my party and the Greens, want it and at the same time hold on to my 'Freedom for Scotland' credentials?"

If it wasn't for the fact that he is a politician, I might feel some sympathy for him.  But no!  I will reserve that sympathy for the decent Scots that he has deceived and led-up a garden path, never intending to get to the end.

Who was it said?
"Oh what a tangled web we weave, when first we practice to deceive"

Sir Walter Scot, methinks!

Scotland and Independence

Some of you will have read my previous posts about the fear that surrounds Alex Salmond and the SNP,  (fear of calling a referendum) and their trying to squeeze ever more concessions out of the UK government.  This on top of the excessive funding that Scotland already receives.

Well, seems like someone is finally listening.  The timing of the referendum is being discussed by the UK government as well as the question to be posed.

Salmond and Co. want a three choice option.  Something like:

Do you want complete independence for Scotland and a break with the United Kingdom or do you want greater powers for the Scottish Assembly?

• Yes, complete independence
• No, remain part of the United Kingdom
• Greater powers for the Scottish Assembly but remain part of the UK

The SNP and fellow travelers think that when faced with such a choice, they will get what they really want - Greater Powers. 

I believe that they know they will not get a majority Yes (what would be a majority?  More than 50% of the eligible voters (that is those registered to vote in Scotland) or more than 50% of those that bother to vote?)  

Getting Greater Powers is what they really want as this way they can strut and preen themselves as leaders without needing to face the full economic consequences of their actions - i.e. they will demand that the English continue to subsidize them.

As I said earlier, I think that the English should also be asked for their opinion or view. 

I think the question on both sides of the border should be:
                   Do you want Scotland to remain a member country of the United Kingdom?

• Yes
• No

A majority would be when 50% plus 1 vote of those eligible to vote is met.

The referendum needn't be binding ( I am not sure any referendum is binding on the UK Government) but this would give a sense of English  and Scottish feelings.on the matter. 


Also, whatever the outcome, the Barnett formula must go and the subsidy to Scotland (and Wales and Northern Ireland) must end.   This needs to happen before the March Budget.

Then we can see if they can afford free university education and prescriptions etc.

Gus O'Donnell interview

The UK Cabinet Secretary (a Civil Service post) retires on December 31, 2011 and has given an interview.

In this, he highlights the three key issues facing the UK;  The EU, The Economy and the Union.

The EU - If you believe some, the UK is isolated and so can expect to have little influence.  Reality though, is we are still a member and as such need to continue to push for reform of EU institutions in spite of what some petty Euro MPs think of us.

http://blogs.telegraph.co.uk/news/danielhannan/100124965/time-for-britain-to-make-the-great-escape/

Click on the above and Open!

The Economy -  Everyone (except Ed 'I think we should borrow more' Balls and Ed ' does my voice sound funny and whiny to you' Miliband) agrees that 2012 is going to be a hard year, and 2013 doesn't look great either!  However, stopping the austerity measures isn't really an option.  Indeed many say the cuts should be deeper and more immediate.

Also, the fate of the economy is inextricably linked to the actions (or rather, non-actions) taken by the EuroZone members.  At some  point, fairly soon, I expect (not wish for) that the financial markets will lose patience and will attack one of the Eurozone members.  I would not be surprised if they took a tilt at France.  The exposure to sovereign debt for French and German banks is worryingly high.

The Union - I have posted before.  Have a referendum in Scotland and one in England and go with the wishes of the people.  No more delay.  I see that Alex Salmond and the Welsh leader, Jones have requested a meeting with Cameron to discuss his handling and us of the Veto at Brussels.  They both full well know that Foreign Policy is a 'reserved' policy and falls outside the ambit of the devolved administrations.  Their comments are posturing such as only petty people can manage.  Time Cameron slapped them down and sent them scurrying back to their Celtic palaces.

I have just re-read the paragraph on The Economy.  Why is it that in the case of Labour, two Eds are not better than none?

Incidentally, Gus O'Donnell is retiring aged 59.  Presumably on a sizable pension linked to his final salary of around  £235K and index-linked for life!