This Scottish Business

An actual, informed debate is all well and good, but your average voter doesn’t really give a stuff about the details – that’s for politicians to sort out and/or get stuff up later.

The bottom line is that if England win the world cup next year (ha!) and/or Braveheart is on telly the night before the election, it will be an overwhelming yes vote.

dragon – Member
Do we have any idea what rates Scotland could borrow money at?

Another minor issue 😉 . So leaving aside the method by which the UK’s debt is shared out (sounds better that way doesn’t it) how will international investors react if they get to hold the Scottish bit? Yes that’s ok, the risk associated with a smaller economy etc is fine….will they (wee) ‘eck. They will demand higher rates.

Actually the corporate tax thing really starts to make by blood boil. What is one of the key lessons of the € experiment? You cannot isolate monetary and fiscal policy. Unless you live in Scotland apparently. So if you keep the £ and have a tied monetary policy with the rest of the UK you need to align budgets and tax rates. Corporation tax is probably the most obvious area of this.

But no, Scotland will have corporate tax rates 3 percentage points below the rest of the UK. We really are going to be running out of cake to eat at this rate.

So I get flamed on here for suggesting that key issues are not thought through. Ok, I accept I am wrong. They have been fully thought through. In which case, this is written by people who are either economically illiterate or dishonest. Looking at their educational backgrounds, perhaps you can only come to one conclusion after all…….

When wee eck is on Desert Island Disks perhaps the first choice will be Whitney’s “Didn’t we almost have it all.”

What is one of the key lessons of the € experiment

Is it never trust an economist?

😀 spot on

Remind us – what rating does a very small economy (let’s say the Isle of Man) have vs a bigger economy – sharing the same currency – like the UK?

What is one of the key lessons of the € experiment

that the politics of the Euro are more important that the economics ? True for both sides of the debate as it is for this one?
I dont think we can believe either side as its a heady mixture of politics,economic half truths and spin.
The debate wont be won on economics but on where the people see themselves [ or in EU the politicians]

😀

If it does go ahead, I think it will prove an interesting time in terms of economics in general; it is essentially the development of a new nation state albeit from a stable economic base and will be almost an experiment to be observed in real time.

What’s the plan if the referendum doesn’t get a yes majority (sorry if this has been covered earlier?)

What’s the citizenship criteria? From a non-eu citizens perspective. 🙂

That’ll be it off the cards for a while. Impossible to predict for how long though. I don’t think Alex Salmond would ever lead the call again but any party presenting a referendum as part of their Scottish Election manifesto should/would expect a re-run. TBH, I’m not convinced that it’ll happen in 2014. However, I am convinced it will happen at some time in the future. I’d expect another 20 or so years before another – and successful – attempt.

What’s the citizenship criteria? From a non-eu citizens perspective.

A non-EU citizen residing in Scotland?

Good question Scotroutes to which I am sure you know the answer!!! 😉 Which one shall we ask S&P or Moody’s since we will get a different answer 😉 Have Moody’s acted on their downgrade of IoM yet? The second reason for placing IoM on review is interesting in the context of this thread, don’t you think?

Here you go – http://www.tradingeconomics.com/united-kingdom/rating

Lots of small economies doing OK on the ratings front there. I’ve not heard the “Scotland won’t have AAA rating” scare since, oh, I guess not since the UK lost it 😆

A non-EU citizen residing in Scotland?

Yes. If there’s eligibility to vote on the issue, then wouldn’t there be an expectation of citizenship after secession?

Legal migrants can apply for naturalisation (subject to normal checks etc)

A citizen of any country who has been resident for 10 years and has an ongoing connection with Scotland may also apply for naturalisation.

I think this is pretty much standard stuff?

Well we shall see Scotroutes (or hopefully not!) But it is an intersting point and I accept it might not be as clear cut as I may have suggested 😉 Nevertheless I know where I would place my bets as a bond holder!

Perhaps RBS capital markets will be able to place and price Scotland’s new debt inside the rest of the UK. Hmmm, It would be intersting to be in the underwriting discussions for sure!

Scotroutes – there is a difference between the credit profile of the IoM and that of Scotland. I’m not sure the IoM has a very large public sector funding requirement, and the small population is largely wealthy due to the fact it is an attractive tax haven. Not really comparable. Also is the IoM even a sovereign state, or does it actually benefit from an implicit or explicit guarantee from the UK?

Fundamentally a credit risk rating is not determined based on the size of the country, large or small you can have a crap one. Scotland would be unlikely to have a better one than at present due to the increase in concentration risk and reliance on oil, and the profile of the economy. Someone earlier asserted that Scotland wasn’t reliant on the public sector because it had lots of BAE/Babcock jobs. I hate to break the news but BAE is basically a government entity, and as we’ve seen with the recent carrier contract it is unlikely that expenditure would continue post independence.

For Scotland, they cannot benefit from currency union with the rest of the UK without giving up their economic independence. If they took the Euro they would be subject to the same disaster afflicting most European countries who aren’t Germany. An independent currency would be expensive and interesting.

People’s Republic of Scotland: http://www.telegraph.co.uk/news/uknews/scotland/4217793/Scotlands-dependence-on-state-increasing.html

Scots economy hampered by public sector reliance: http://www.telegraph.co.uk/news/uknews/scotland/8763562/IPPR-Bloated-Scottish-public-sector-will-hamper-recovery.html

EY Item Club with very unhappy reading: http://www.ey.com/UK/en/Issues/Business-environment/Financial-markets-and-economy/ITEM-Club-Scotland

Of course those in favour of Eck’s fairytale will rubbish those accounts. Fair enough.

I just doubt very much that Scotland has the enterprise or the open-ness to enterprise to compete globally. Scotland is an undifferentiated proposition in a competitive global market, with few reasons to commend it more highly than any other wannabe country. Remember, the population of Scotland is less than the accepted rounding error on the population of Beijing. And yet we demand attention just because we are Scottish and we did stuff years ago and we’re not English – I’m sorry, but that is not enough to build a nation upon IMHO.

webwonkmtber – Member

People’s Republic of Scotland: http://www.telegraph.co.uk/news/uknews/scotland/4217793/Scotlands-dependence-on-state-increasing.html

Er, did you read it?

“Including a geographical share of the North Sea, official Scottish government figures in 2008 show that the ratio of public-sector expenditure to GDP is 41.3 per cent of Scottish GDP compared to 41.5 per cent for the UK as a whole.”

It’s a classic economic scare story, they filled the top end of the article with comparisons with Cuba and Iraq and hid the comparison with the UK down at the bottom in the hope we wouldn’t notice. Oh and a bit of Barnett misinformation while we’re at it.

I am glad the ‘divorce’ will as easily dealt with as it is here. Sounds quite straight forward.
From a social connection point of view, after being told recently by a Scottish taxi driver to eff off back to England, George Galloway asked if he did not feel socially closer to a taxi driver in say Doncaster than someone like the Duke of Buccleuch? Apparently not.

As a counter point could we have a referendum in England to see if we could give Scotland back to the Scottish?

Isn’t the arrogance amazing from the SNP. Nato yes but nuclear weapons no which goes against the fundamental defence cornerstone of a nuclear deterrent of “preserving peace and preventing war”. A bit like their perspective on Sterling. They seem to think these are one sided conversations rather than considering the other side might not see the point.

What will happen with Scotlands share of the UK trillions national debt?

I cant See England keeping their share.

Salmon wants independence based on upbeat soundbites. ‘We’ll make us more prosperous’.

Why cant you do that now?

Someone earlier asserted that Scotland wasn’t reliant on the public sector because it had lots of BAE/Babcock jobs.

I think you misread my post. BAE/Babcock/Serco all basically the same pigs feeding out of the UK MoD trough. When these high value jobs go the effect will be significant.

slowmart – Member

Isn’t the arrogance amazing from the SNP. Nato yes but nuclear weapons no which goes against the fundamental defence cornerstone of a nuclear deterrent of “preserving peace and preventing war”.

Have we not covered this earlier in the thread? May have been one of the others, this subject is the whack-a-mole of No campaign scare fantasies.

There’s no requirement for a NATO nation to be nuclear. Germany are actively disarming and will be fully disarmed by 2015, Greece fully disarmed in 2001, other members have refused nuclear involvement. Spain. No new NATO member has become a nuclear host since the 60s- there are only 8 nuclear hosts left in NATO from the original 10, out of 28 members, soon to be 7.

In fact, since 1996 NATO specifically bans new, non-nuclear members from hosting other members’ nuclear weapons due to its nonproliferation commitment. (and also bans all NATO powers from stationing nuclear weapons in Scotland, whether or not we join)

So not only does NATO not require us to host nuclear weapons- they wouldn’t let us even if we wanted to.

http://www.theguardian.com/uk-news/2013/aug/14/nato-blow-snp-nuclear-strategy

I haven’t got an argument with the points raised but Scotland already hosts nuclear weapons and the distinction is stark and prevailing given the NATO reasoning.

There’s 2 different messages mixed into one there. Yes, new NATO members can’t have unresolved territorial disputes with other members. That’s just not a problem, there’s no territorial dispute relating to independence, it’s a mutually accepted process.

The requirement mentioned that states must have a stable defence history- actually not in article 10 as suggested, incidentally- is a trickier one. Without actual detail, who knows, it’s all very nudge nudge wink wink.

It makes sense to look at precedent here though. Croatia began the process to join NATO just 5 years after ending a civil war, and most of the recent intake went directly from the Warsaw Pact to NATO, so apparently you don’t need to be all that stable. Certainly Scotland’s defence objectives aren’t going to be dramatically different from the UK’s, aside from the commitment to nuclear nonproliferation which is aligned with NATO’s commitment.

The article then moves on to No campaign mouthpiece, Lord Robertson. Now I was a fan of Lord Robertson, he achieved great things and proved to be a genuine statesman. But more recently he’s claimed that by closing Faslane Scotland would forcibly disarm the UK, ffs, so you can decide how much credibility his comments have now- no matter how many times you remind people that you were secretary general, pish is pish. It’s a shame. I wonder if he believes any of it.

In the final analysis, you can ask yourself whether a non-nuclear Scotland is of more use to NATO in than out, and whether we’re more or less desirable than Albania.

I think you would get an interesting response if you tried to sell that idea to the youth of Spain, Italy, Portugal etc…

On the contrary, the Euro crisis proves exactly how worthless “sovereignty” as far as setting monetary policy is, whether you’re an independent bank or have a vote at the ECB: no matter what happens its currency traders and credit rating agencies that determine your decisions.

I thought Scotland was going to be nuclear free? Or is this policies still being formed?
– don’t ask, don’t tell for visitiors
– a bit more haziness around the future of The Trident fleet.

http://www.theguardian.com/politics/2013/nov/26/alex-salmond-snp-stance-nato-nuclear-weapons

have they been hauled up for fanciful O&G and renewables revenue claims yet? or have they learnt their lesson about all that.

Haven’t read the thread so maybe covered…but having seen the damage they’ve done to policing in Scotland in just six months my mind is well and truly made up. The irony being that despite the argument that decentralisation would allow Scotland to do what’s best for Scotland and not be ruled from afar, they’ve amalgamated 8 police forces into one, put a tyrannical narcissist in charge, and done nothing stop him forcing an irrelevant and inappropriate Strathclyde policing model on the rest of the country (despite his repeated promises that he would let local area commanders police their divisions as they deemed fit). A total **** up, which is why I will not vote for independence so the SNP can **** everything else up.

That’s better…

Salmond at his “best” on Newsnight, So the latest wheeze is the pound is an asset. No it’s not, it’s a currency. Assets and liabilities are denominated in currencies. But the currency is neither in itself. So he is caught with his pants down yet again and tries subterfuge and basic lies once more. What will be next one?

Kona these currency traders and rating agencies cleary have mystical power then? I met the CEO of one of the rating agencies in the summer, he was impressive but not that impressive. Either that or he was a very, very humble man given such extraordinary powers.

Discuss

Nothing to discuss. Freedooommmm!

They deserve independence for being brutally suppressed after so many centuries.

They can live their lives however they wish. Work, beg, slaves … whatever suit their taste.

One thing they can do is perhaps bring back capital punishment. 😈

p/s: I will migrate to SalmonLand then from there move south to sack the southern cities …

vinnyeh – Member

I thought Scotland was going to be nuclear free? Or is this policies still being formed?
– don’t ask, don’t tell for visitiors
– a bit more haziness around the future of The Trident fleet.

Don’t believe everything you read- that’s not a change of policy at all. Here he is, saying the exact same thing a year ago: http://www.bbc.co.uk/news/uk-scotland-scotland-politics-20020843.

Hey, it’s almost like the media isn’t completely neutral. But that would be crazy!

teamhurtmore – Member

Salmond at his “best” on Newsnight, So the latest wheeze is the pound is an asset. No it’s not, it’s a currency. Assets and liabilities are denominated in currencies. But the currency is neither in itself.

Eh. With respect, that’s just not the case- true in terms of financial jargon but that’s not the only meaning. Dictionary definition, asset, “a useful or valuable thing”- so yes, of course the pound is an asset

Well we will disagrees politely NW, if we want to be pernickety, in the old days of currency history the pound was actually a liability (the oppositely an asset) and a weird liability at that because it Is a promise to pay nothing but itself. Either way Salmond and Strugeon are taking BS again and they know it.

But if we want to be precise, I am sure the RUK will be happy to oblige Salmond and let him have even more of our liabilities

This is very sinister politics and they know people will be confused by the terms, But it is a lie. Pure and simple. They could both have a tour of the BoE museum if they need to understand currency and balance sheets better.

Sturgeon starts the day on R4 with a lie on the day she promises an honest debate. Scots and Scotland deserve better.

Okay, Scotland will be happy to share the liability that is Sterling – is that better?

No it’s not Ben because that function of money disappeared a long time ago. Sturgeon and Salmond should simply stop lying. He studied Econs at St Andrews and was an economist. He knows exactly what he is doing.

Why hang on to Scotland if they want to go their own way?

Other matters like currency, the Queen etc are secondary really as they need to start from “new” again. Hardship is not an issue.

It is always better if they are in charge of their own destiny.

If it is not now it will be in future so makes no difference really … unless the UK govt start forcing people to relocate to Scotland with incentives.

Okay, so it’s neither an asset or a liability. In which case it is worth nothing, so why the fuss about Scotland using it?

There is one reason that hasn’t been covered.

The UK is a pretend democracy with an unelected upper house.

Scotland will be a democratic country.

Very drole Ben. There is an answer but it’s too late for the economics of currency unions now!! Sleep well.

(he is still lying and I am sure you can see that)

bencooper – Member

Okay, so it’s neither an asset or a liability. In which case it is worth nothing, so why the fuss about Scotland using it?

In fact it would be better for Scotland to slowly ditch pound and perhaps start their own Scottish Pounds. UK Sterling pound is a liability … so is EURO.

Ach, I don’t even know what to say to that THM. You’re choosing one possible interpretation of the words then wringing their neck to get the maximum possible outrage out of them, when the truth is there’s a perfectly legitimate alternative interpretation which you’re completely ignoring. In someone else I’d honestly suspect trolling.

The pound- the idea of the pound, if you like, rather than an individual banknote- is a valuable thing. Almost a textbook intangible asset in fact, if you want to stick to the financial definitions. Recognition, goodwill. Though I have to say again that the financial definition is not the only one, I don’t want to get entirely sucked into debating your chosen definition when the main point is that there’s another.

If the pound isn’t an asset, do you fancy changing to the British Quatloon tomorrow? Or do you think that might be a bit harder to use worldwide, even if the financial value is identical?