Wednesday, June 13, 2012
Scottish independence: Scottish National Party sees their assumptions on monetary policy rejected out of hand, time to plan for Scottish pound
The Scottish National Party has run into trouble over a number of issues which they don’t have answers, NATO, European Union membership and monetary policy.
On NATO, the SNP has been anti NATO for about 30 years, 30 years of getting it wrong with few challenging the disastrous policy publicly within the party itself.
NATO is the cornerstone of the Western Alliance, recently Deputy First Minister spoke of Scotland being involved in a ‘a partnership for peace’ with countries like Norway.
When I heard the ‘partnership for peace’ line, I thought it was something which could be used for a housing association, its nonsense, utter nonsense.
On the BBC Big Debate, Nicola Sturgeon also blown out of the water on Europran Union membership when Scottish Tory Leader Ruth Davidson pulled out a letter which stated the SNP had never as a government or as an opposition written to the EU to know if Scotland would still retain membership if it leaves the UK.
The short answer is no it would not; there is no agreement between Brussels and the Scottish Government.
Scotland would have to apply as a new member state and part of that is joining the Euro, an unstable currency.
Monetary policy is another area where the ‘work’ hasn’t been done; again, Nicola Sturgeon stated that Scotland would be able to join the Bank of England monetary policy committee.
The word came back pretty quickly from Westminster, no; they won’t get a seat and they won’t get any influence either.
Add to this a number of large countries whose currencies are shared with a smaller neighbour have recently confirmed they do not give them any say over key decisions on monetary policy.
The USA, Australia, Switzerland and South Africa Governments all say they retained full autonomy over issues such as the setting of interest rates, without offering a say to nearby nations which also used the same currency.
This leaves the SNP with a credibility gap, after making assumptions of what they thought they would get as an ‘entitlement’, they are finding out they will get nothing.
The SNP wrongly argued that it would be able to influence the Bank of England on the crucial issue of money supply, given its importance to the UK economy.
This is the difference between international politics and provincial politics, the correct solution is to prepare for a Scottish pound.
Yesterday, Deputy First Minister Nicola Sturgeon said Scotland would, if required, pay the Bank of England to provide “lender of last resort” facilities to Scottish Banks, to ensure the country was copper-bottomed.
This is another assumption that the Bank of England will agree, there is no agreement on that and probably like the EU debacle no paper work that the Scottish Government has entered into negotiations either.
At a recent First Minister’s Questions, Alex Salmond was dropping strong hints at a formal deal, saying Scotland would “expect to be part of the appointments process” of the Bank of England’s monetary policy committee (MPC).
“There is nothing unusual about that… these are arrangements that are put in place between independent countries.”
That statement turned out to be completely vacuous.
Although the Bank of England has been “independent” since 1997 you can completely forget Scotland having any input.
Sooner or later, someone is going to have to draw up a plan for a Scottish pound, it is the only credible route which is sellable to the public.
At Westminster General Elections; the SNP do pretty badly because they aren’t trusted on international matters.
And the major hiccups so far all stem from matters handled currently by Westminster.
Scotland isn’t ready for independence, the Scottish Government isn’t ready for independence; the Scottish National Party isn’t ready for independence and the Yes Scotland campaign well that is just a joke.
Another gaffe is the SNP’s plan to maintain a UK-wide oversight of its financial sector after independence which may be illegal under EU law, things aren't being thought-out to their logical conclusion and it shows.
2014, the public get the last laugh but the public won’t be laughing with Alex Salmond and Nicola Sturgeon, they will be laughing at them.
The Campaign for Human Rights at Glasgow University