[Closed] Osbourne says no to currency union.

1) you are renting the assets or 2) you are still paying for them. When you stop paying the rent/loan the assets return to the owner

Who's the owner? If something is bought by the taxpayer, it belongs to the taxpayer - 9% of that is Scottish.

Were it gets messy is that 9% of a fighter jet is no use to anyone. So things will have to be divided up a more sensible way.

So things will have to be divided up a more sensible way.

I'd agree with that - thing is you seem to want to pick and choose which assets get divided

you want to keep more than 9% of the oil (asset), then you need to accept a quid pro quo deal against other assets to the same value that we keep in full

Oh Gods, not this again 😉

How else do you divide up a physical asset apart from geographically? There's some huge military training areas up north - do you want 91% of those too?

there is no precedent in history, before, ever, for a natural resource in the territory of one country to belong to another country in this way. It's total nonsense, which is why the UK doesn't own a share of Canadian shale oil reserves or Australian uranium.

On the negotiation, is my understanding correct of this scenario. Scotland vote Yes in 2014. Nothing much happens as the UK is focused on a general election in 2015.

Do the Scots get to vote in a 2015 General Election ?

I can imagine the 2015 election would have as one issue a manifesto commitment from each of the main parties as to how they would deal with the Scotlish negotiations. I could see a fairly hardline stance being very popular. So Scotland ends up trying to negotiate with a very obstinate and unyielding new UK government. We could even has a situation where the UK is seeking to exit the EU but an independent Scotland deciding it wants to remain inside.

All seems a massive mess to me.

How else do you divide up a physical asset apart from geographically?

No problem at all - just the same as dividing up an fighter jet in many ways isn't it, you don't - you put the value into the 'pot' and divide it out in fair proportions

Thing is, that to keep more than 9% of the oil, once again you've got to accept that means you're going to get substantially less of everything else - if the oil is worth £X billion, then you lose out on £Xbillion of other assets.

Sooner or later you get to the point where you realise you've got all the oil, but nothing else at all.

You might want to have a look at Haiti and France for an example of ongoing debt after independence 😉

bencooper - Member
There are a few red lines. Trident is going, the only question is how quickly.

In the event of a yes vote, is this definite, or is it pending the result of the Scottish election i.e. if the SNP don't get in it might not actually happen?

@ninfan - small poor countries cannot borrow money, having low debt/gdp isn't necessarily a sign of strength.

I think about as many Scots think we are going to get a share of UK assets(there I said it) that are based in England,as (this thread apart)English folk do of Scottish assets including oil.

or perhaps carved out of an independent Scotland altogether, like Gibralter ? Latter unlikely but possible

That's the point I think you'll find the UK "stick absolutely" to the EA

I am basing this on the premise that the politicians will be more reasonable than the average STW poster so it may well be flawed...actually perhaps not given the musings today.

the UK's contribution to the Ireland bail out was fairly small and driven largely by political considerations and the fact the RBS in particular had huge exposure to the country.

I think being seen to be tough on Scotland, including refusing to accept the "democratic will of Scotland" might actually be a very big vote winner in the UK.

I could see a fairly hardline stance being very popular....with me

No problem at all - just the same as dividing up an fighter jet in many ways isn't it, you don't - you put the value into the 'pot' and divide it out in fair proportions

Not sure that's how it works overall is it? Take the oil, it's worth x amount per year, how do you calculate it's worth to take it out of the pot. How many years worth to you take out?

Scotland will get the oil, physical assets that are in Scotland and a share of everything else, for example 9%ish of the remaining banking shares etc. We're obviously not going to demand a share of an airforce base in England, but we'd expect, for example, the Regiment of Scotland to remain (or some of it).

[url= https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/274477/scotland_analysis_borders_citizenship.pdf ]UK government analysis[/url]
So it seems a maritime boundary is likely to be created according to the principles of international law or agreement between the 2 parties. The rUK doesnt seem to have a case for any greater than the current civil jurisdiction boundary at most

A similar comparison would be that Scotland should get a share of Crossrail, since some of it is being paid for by our taxes. But I don't think anyone expects that to happen.

[quote=bencooper ]It's total nonsense, which is why the UK doesn't own a share of Canadian shale oil reserves or Australian uranium.

Oh noes, not Scotland as a colony again 😉

[quote=bencooper ]A similar comparison would be that Scotland should get a share of Crossrail, since some of it is being paid for by our taxes.

http://www.standard.co.uk/news/scotland-given-500m-sop-for-crossrail-6616253.html

Have we done the No Borders cinema adverts yet? This is one of them:

😀

133 pages and we are still going around in circles.

Yes Scotland can use the pound after independence. It can't force the rUK to be the lender of last resort though. After independence Scotland stops paying tax to the UK so it no longer has the right to use the Bank of England as lender of last resort.
If you get independence good luck and all the best. More likely is that we will still be together and then a devo-max thread will start and we will all be at it again just on a slightly different topic.

aracer, that's a great example of Scotland getting the shit end of the stick. We're supposed to be grateful for £500m? Proportionally that's about 1/3d of the southern subsidy of crossrail.

Junkyard - lazarus

Ben AS has said nukes are not up for negotiations though i dont believe that either - Leasing land to rUK so it is not in Scotland is my guess there.

See, that's what I'd be happiest with- rUK can pay for it, they can have the moral burden, which is the real benefit of getting rid of the things. And in return we'll gain something pretty big in the negotiations, and retain the economic benefits of the base. It's a big win, that. And the rUK will be happy about not having to spend a fortune rebasing the things. I think the SNP have backed themselves into a pretty tight corner on that one and tbh I can applaud the stance but there are other good outcomes.

I can understand that, but for quite a few people (including me) it's a red line - the WMDs have to go from the Clyde.

And really, it's not a workable option for the rUK either. Faslane and Coulport would be incredibly vulnerable to the actions of any future Scottish government - there's no power station, no accommodation, no airfield, no guaranteed road or sea routes. If, say the Greens got into Holyrood, they could shut down Faslane in a day.

That's not the kind of risk any military planner would want to take.

[quote=Northwind ]We're supposed to be grateful for £500m?

You're supposed to be grateful for anything we give you laddie 😈

After independence Scotland stops paying tax to the UK so it no longer has the right to use the Bank of England as lender of last resort.

That's not the kind of risk any military planner would want to take.

Ben: Of all the things going on, the MoD being worried its pipsqueak northern neighbour breaching a treaty on a military base is not one. The UK is just not that scared of the mouse however much you think it could roar. [b]and besides,it may take a while for America to tell us what to do[/b]

The saddest thing in my opinion are comments like "YOU can keep them here".
The whole debate brings out an "us" and "them", "we" and "you" to describe people I feel are from the same country.

I look upon Scottish nationalism with the same degree of pity I imagine civilized America looks upon the pro gun lobby there. Having been lucky enough to grow up in a decent democracy though, I understand if fellow Scots vote for it I will have to accept it and move on.

I can understand that - half my family is from the North of England, I have relatives all over. There is a good left-wing argument for the Union that people in a Glasgow have as much or more in common with people in Liverpool or Manchester than they do with people in Edinburgh.

However, we're stuck with the border where it is. And we're stuck with Westminster the way it is. Scottish independence is the only way we'll get democratic representation, and maybe the shock of losing Scotland might kick Westminster into doing something about the way other areas of the UK are governed.

Ben, one of the cornerstones of the yes campaign seems to be that people are lording it up as soon as you go across the border. I also think that Westminster is not beyond repair. I still feel my vote counts there. I feel it is massively misrepresented in nationalist circles.

Ben, one of the cornerstones of the yes campaign seems to be that people are lording it up as soon as you go across the border.

Really? I pay pretty close attention to the wider Yes campaign and I can't think of anything that gives that impression. It's the No campaign who give that impression by making out that Scotland would be poor and lonely without the UK.

Ironic that it's the Better Together campaign that talks down Scotland.

"Ironic that it is the Better Together camp that talks down Scotland". We could go round in circles on this. If you want an example of talking down a country, watch the yes campaign official video regarding the UK.

athgray - Member
...I also think that Westminster is not beyond repair. I still feel my vote counts there. I feel it is massively misrepresented in nationalist circles.

If Westminster had been "repaired" I very much doubt we would have had this problem.

As for your vote counting, which house? Are you a Lord?

After all it is the members of the HoL who are telling us it doesn't matter which way the referendum goes, they can still deny us independence.

I think the SNP have backed themselves into a pretty tight corner on that one

The whole debate brings out an "us" and "them", "we" and "you" to describe people I feel are from the same country.

Comparing it to the gun lobby is pretty grass/unhelpful IMHO and unlikely to make a yes supporter respect you more. Would you be happy if I compared no to Putin and Crimea/Ukraine?

FWIW I think all nationalism sucks but I dont mind federalism

There's an important distinction between nationalism and independence.

But it suits atgrays assertations to conflate the two.

epicyclo. We will not be denied independence if we vote for it. I would not disagree with that, but remember you would take independence even if Scots reject it. I am happy to have a more positive view of the UK than you JY. I would not be offended at a comparison with No/Putin, I would however strongly disagree, and say you have it the wrong way round. Don't get me wrong, I think Scotland is great, and feel lucky to have such magnificent scenerey close to where I live and work. I don't feel particularly proud of Scotland and don't feel a sense of ownership that it is my country. No amount of Yes BS makes the Highlands any less spectacular.

No amount of Yes BS makes the Highlands any less spectacular.

I'm still not sure where you're seeing all this Yes stuff I'm not seeing 😉

The Highlands will still be there whatever way the vote goes - and people from all over the UK and wider afield will still be very welcome to visit or come live here*. Scottish independence isn't about being Scottish, it's about being independent - living in a country ruled by people we vote for.

*Unless the UK leaves the EU, then it might get a bit trickier.

Just in case the negotiations go wrong, we're already making preparations:

http://www.bbc.co.uk/news/uk-scotland-south-scotland-27429939

😀

Ben we didn't do very well in that raid 😆
This is a report from a recent public meeting in Edinburgh
[url= http://www.broughtonspurtle.org.uk/news/scottish-independence-debate-%E2%80%93-damn-closerun-thing ]Broughton spurtle[/url]

I like how the minister is still politely asking for his bell back, almost 400 years later 😀

That was interesting, and kind-of matches my feeling - it's going to be very close.

So why are bitter together not willing to stress the benefits and instead concentrate on telling us how crap life will be? The pro unioners mostly debated in a measured,positive way that puts the BT to shame. Shows how poisonous BT and their tactics actually are to the no vote.

Better Together's problem is that they don't actually have many on-the-ground people. They're trying to make up for it with flying visits from Westminster politicians and astroturfing campaigns like Vote No Borders, but that's not really the same thing.

As opposed to Yes Scotland duckman. They keep telling us how crap life is!

Why does the SNP favour the pound, out of curiosity ?

If you are going to use another country's currency, why not the US dollar ? I think Zimbabwe uses the US dollar ? So there is precedent.

The Aussie dollar seems a good bet these days too.

Why does the SNP favour the pound, out of curiosity ?

Because an independent Fiscal Commission of experts, including several Nobel prize winners, looked in depth at the issue and produced a very comprehensive report saying that a currency union was the best option for both Scotland and the rUK.

They didn't just make it up down the pub.

From Yes website

the UK is Scotland's principal trading partner, whilst on the other hand Scotland is the UK's second largest trading partner with exports to Scotland greater than to Brazil, South Africa, Russia, India, China and Japan put together;companies operate in Scotland and rUK with complex cross-border supply chains;there is a high degree of labour mobility across these islands, helped by transport links, culture and language;all the necessary requirements for an optimal currency area are present, including similar levels of productivity and evidence of a high degree of convergence in terms of economic cycles;and a currency agremeent means that Scotland would continue to make a significant positive contribution to the balance of payments of the currency union area. 

I should add that a vote for Yes is not a vote for the SNP in perpetuity.

hels - Member
Why does the SNP favour the pound, out of curiosity"[

Because like most rational people they recognise that full independence is not in anyone's interests. This way you can duck that central lie.

The biggest negativity is the remarkable re-writing of the UK history - the extraordinary success that the UK has had over sustained periods of success and adversity. The RoW looks at this debate with incredulity. How bloody foolhardy! And to replace a currency union (as part of a wider union with fiscal union) that already works with one that doesn't. Turkey's and Christmas!

Just had lunch with two Edinburgh friends - both find the whole debate utterly depressin. One v senior in fin services ready with obvious contingency plan come the 19th if required. Kids already in education down south, work already has offices ready in London. They just hope that most people continue "to see sense" as the polls indicate just!

Sure, but if the UK gov is an unwilling partner in this theoretical currency union proposed, has anybody looked properly at any other options ?

Genuine question. People I know who are keen on Yes seem very keen on a Scandinavian style high tax high social services style model, why not adopt the Kroner and trade more across the north sea.

Gordie in the same way, it's absurd to pretend that a Tory manifesto especially the bedroom tax (sic?) is a feature in perpetuity.

Ben have you noted and considered the downsides of a currency union as articulated by the fiscal commission?

And then there is the wonderful li(n)e

the proposed framework provides in one sense a continuation of monetary arrangements within a sterling zone but full flexibility in fiscal policy

Well there's a first - anyone got a phone number or email address for the marines?

What would tying the currency to any other version achieve, Hels?. The same (unwritten) obstacles would still exist. At least the Scottish and rUk economies are reasonably in synch with each other. So from that perspective currency union makes sense and broadly works - oh unless there is a spike in oil prices and the S£ appreciates as it did in the 1970s. Let's hope you don't work in exporting then.

Since labour have agreed to the tory spending plans I see little difference between the two thm.

I am happy to have a more positive view of the UK than you JY.

Which apparently means one where they ignore the democratic wishes of the people of scotland an go "hardline". I am not sure how this is more positive than saying they wont do this.

Because like most rational people they recognise that full independence is not in anyone's interests. This way you can duck that central lie.

What was it we had to call this again duckman?
So THM can still freely use the word lie to describe positions he disagrees with[ pretty much each post it would seem]. I think there is a word for this. Would it be ok to use that word to describe your behaviour?

Just had lunch with two Edinburgh friends - both find the whole debate utterly depressin.

Gordi, v good point. And why is that? And what makes you think that AS or any other Scottish party will be in a position to genuinely adopt radically different policies? I think Ernie made that point several pages back - it is a complete folly/fantasy in theory and in practice.

But if AS really can combine lower taxes, higher spending, all the pros of a CU with none if the downsides etc you would be a fool note to vote for him. I would love to have such a magician run the whole of the UK not just Scotland. It would be brilliant. Sadly, I fear that the reality will be v different....still there is a first for everything.

Hels there's a series of articles on this site under the heading currency reflections
[url= http://www.futureukandscotland.ac.uk/tags/currency-reflections ]future uk and Scotland currency reflections[/url]

THM AS is hardly the first or the last politician to stand on an electoral ticket that is unrealistic in its aims

They all do it but it is a fair criticism

[quote=bencooper ]That was interesting, and kind-of matches my feeling - it's going to be very close.

Though it doesn't quite match how you've suggested a debate would go 🙂

I think most people expect it to be very close - far closer than the current polls suggest.

JY, I refer to the UK as more than it's politicians. They come and go. Even an elixir of youth will not save dear leader. In a generation, if we head down this path, our kids World will be smaller, and our impact on a greater scale wil be little felt. By this I mean that people in the rUK will hear little of Scotland during the day to day. It will just become one amorphous place.
As an example, I know little about what makes Ireland tick. Subtleties about daily life, politics, geography, biking, similarities, differences, business and industry pass me by as we don't hear about them. These things pass most of us by. Long term you could argue these things don't matter, but as someone with a geographically diverse family this matters to me.
What out of curiosity is everyones problem with the BBC? Other than perhaps calling their neutrality into question on the independence debate, what else have they done wrong?

What out of curiosity is everyones problem with the BBC? Other than perhaps calling their neutrality into question on the independence debate, what else have they done wrong?

Well not that it matters as according to BT,we won't be watching it anyway. But being impartial would be nice.

Why does the SNP favour the pound, out of curiosity ?

No one seemed to respond to my question of what if any banks will an Independent Scotland have. You can't have a country without banks.

The same we have now,obviously. I realize in your world you carve out chunks of our country,keep 91% of the oil( my favorite ta!) But I am afraid it won't work like that. It won't work the way I want as a separatist,but judging by your posts and expectations,you will be more dissapointed.

By this I mean that people in the rUK will hear little of Scotland during the day to day. It will just become one amorphous place.

How is that different to now?

I mean that people in the rUK will hear little of Scotland during the day to day. It will just become one amorphous place.

We met a guy in Cornwall who thought Scotland was a small town near Manchester where they make whisky.

I see the unsinkable euro rubber duck is still bobbing around 😕

I am not sure where you live tbh but my 8 year old son asked me why scotland* did not fight in world war 2 and only England did

That's disgraceful. I blame the parents.

I saw a Tram today, it was moving and everything.

Never thought I'd see the day.

Did you enjoy Blackpool then ...hell you might even be classy there 😉

[quote=piemonster ]
That's disgraceful. I blame the parents.

To be fair he was not dealt a great hand

[quote=jambalaya ]No one seemed to respond to my question of what if any banks will an Independent Scotland have. You can't have a country without banks.

[quote=duckman ]The same we have now,obviously.

Like all "obvious" things I'm not sure it's at all obvious - though it would probably help if you listed those you think you have now. Isn't there an EU rule about banks having to be based in the country in which they do most of their business?

Though I suppose that might not apply to iS given it won't be in the EU 😈

Reasons why it does not make sense for the UK to enter into a currency union with iScotland.

1. Scotland is not our biggest trading partner.
2. The three biggest parties have ruled it out.
3. The public have ruled it out.

There is no need to debate this one any further.

Good job we haven't devoted much time to it then.

hell you might even be classy there

I'm in a class of my own I'll have you know. Never had clarification whether this is a good thing admittedly.

Ummm....

I'm amazed this currency business has been allowed to run so long.

I can't help thinking AS is using it as a decoy to get BT to waste most of their resources on this issue. A bit like the way a rattlesnake uses its rattle to divert its prey.

He knows most of us don't care what currency we end up using, and I reckon he'll turn around at the last minute and say here is Plan B, we're going to use the Australian $, the rupee, or whatever, and it will look like a master stroke.

The majority of Scots do care about what currency they will use though. In a poll earlier in the year it was the third most important issue raised by Scots. So rather than AS fooling BT it looks like he is really trying to fool his fellow Scots into thinking that they will still be using the pound after independence.

The same we have now,obviously. I realize in your world you carve out chunks of our country,keep 91% of the oil( my favorite ta!) But I am afraid it won't work like that. It won't work the way I want as a separatist,but judging by your posts and expectations,you will be more dissapointed.

Never has epicyclo been so far off the mark and ignorant of the majority view of Scots. We do care what currency we use and would rather it was the pound. Are you always so flippant of the majority view?
I understand I may be an anomoly here in that we have a debate that has raged for about 133 pages, where I think I am the only regular poster here that is entitled to vote and will vote no, despite being in the majority (discounting undecides). Strange. If we do not speak up now we will be steamrollered following a yes vote. Other posters appear to confirm this.

The oil belongs to the UK as a whole, as it's the UK which is the independent nation

By that argument, the land belongs to the UK as a whole - are we only going to get 9% of the land area too?

You keep repeating this bizarre idea that natural resources should be divided up by population. It's never happened before, and it's totally unworkable in practice.

ben. Oil split is one of the few things I agree with you on. If we become independent maritime boundaries would have to be split using normal intrernational standards and treaties. The majority of oil would belong to iS, otherwise Scotland would have 9% right to rUK coal fields, or sand and gravel pits, or shale gas reserves. Starts getting a bit silly then.
JY. You ask if it will be worse than this? rUK knowledge of Scotland, as well as Scottish knowledge of the UK will be diminished, so yes I think it will be worse. Independence certainly won't bring us any closer.

Whether people do or do not care is not really the point - they should care and political leaders therefore have a responsibility to inform them correctly. An analogy would be poor diet and smoking. Clearly many people seem to care little about the risks associated with either. However, at the very least, gov's have a role in education and possibly (not IMO) enforcement.

At the moment, the people of Scotland are being presented with a false choice by yS. You can decide as the level of intent and motive here, but my views are clear on that!

The first question is does the region under consideration satisfy the criteria for a currency union. Unlike the € zone, which doesn't (the fundamental flaw), the UK does. A fact accepted by both sides. So far, so good. At least there is a real decision to be made.

The next stage is the weigh up the pros and cons. The objectives of freedom in economic policies (monetary and fiscal) are best served by a S£. But this comes with the downside of higher transaction costs and the requirement to take full responsibility for financial stability. In the medium term, this should be no problem but there are costs and risk in the short term transition period.

A currency union, on the other hand, reduces transactions costs (to zero) and allocates responsibility for financial stability to the BOE. From a iS perspective, again so far, so good. But and it is a big but, the downside means that you give up control over monetary policy to the BOE (the Central Bank of a foreign country) and accept formal limits on fiscal policy. A small trifle.....

These trade offs are clear (in theory and in practice) unless of course you are AS and yS. In their imaginary world, you can have full independence of monetary and fiscal policy, no transactions costs and another country ensuring the stability of your financial system. This is a brilliant proposal and would be a unique model that no other country/economy has ever been able to pull off. All the pros and none of the cons. He is an economic magician.

Recognising that big business is shrewd enough to understand and see through this, AS has stressed the issue of transaction costs for rUK business. And they are real. But as big business has made very clear, they represent a lower costs than the potential costs associated with agreeing to a formal (or informal CU). You can fool some of the people some of the time, but you cannot fool all of the people all of the time. Unless of course, your name is........

In addition, the need for policy flexibility is itself determined by the level of debt you start with. Now of course, if you believe that Scotland can walk away with and live with no debt then the flexibility requirement are very low. And hence you could live even with an informal currency union with its (hidden) downsides. But if, more likely, you will continue to face a tricky fiscal position and the requirement for continued deficit reduction (IMO much more likely) then flexibility becomes much more important (see NIESR if you don't believe me). So on balance, iS interests would be better served with a S£. Of course, that ignores the obvious other point that Scotland itself is much better served with the status quo in these respects. It's that simple.

athgray - Member
Never has epicyclo been so far off the mark and ignorant of the majority view of Scots. We do care what currency we use and would rather it was the pound. Are you always so flippant of the majority view?...

We'll see come September.

Of course it makes sense to use the £ in the short term, but that has been made an issue, so I'm simply pointing out that Salmond may be deliberately extending the controversy, and what his reasons may be. Because one thing for sure, he will have a Plan B.

I can see if you win, you have no concern in trodding on the views of a large portion of fellow Scots. Also you assume that all yes voters do not care what currency we use. I am sure that if that were the case, this thread would not have rumbled on for so long.

He just isn't prepared to share his plan B with the people of Scotland so they can make an informed decision about independence.

When you're negotiating, you never, ever reveal your plan B.

"Well, Mr Car Salesman, I know I said I wanted a £1000 discount, but I'd really settle for a free fluffy dice"

Alex Salmond isn't that daft.

The negotiations will not start until independence Ben. You are quick to talk down Westminster but think nothing of AS misleading the people of Scotland.

The negotiations will not start until independence Ben.

Do you mean the referendum? Starting negotiations after independence is a bit late 😉

Anyway, negotiations have already started - we're in the willy-waving stage, after the referendum it'll become the pragmatic ger-what-you-can stage.

Like all "obvious" things I'm not sure it's at all obvious - though it would probably help if you listed those you think you have now. Isn't there an EU rule about banks having to be based in the country in which they do most of their business?

Possibly the reason your question has attracted little response is because it seems so silly. Perhaps there's a wry interesting subtlety to it that you haven't articulated. Feel free to do so!

Why does the SNP favour the pound, out of curiosity ?