Tuesday, September 17, 2013

Scottish independence: an Independent country needs a separate currency to deal with its debt crisis, Alex Salmond and Nicola Sturgeon have badly botched the issue of a Scottish currency, more proof that the entire indy campaign is completely bogus!

Dear All

A really good while ago I stated that Scotland if it was independent would need its own currency.

This in my opinion was so obvious that the Scottish National Party should have at least done the work or commissioned the research.

Alex Salmond and Nicola Sturgeon did nothing.

From that you can take that the entire Scottish independence is bogus!

Salmond and Sturgeon are trying to sell Scots a pig in a poke, they want independence and think people will buy it handing over a blank cheque.

75% of Scots aren’t buying any of it.

A separate currency is the sensible option for an independent Scotland to give it the essential powers needed.

In the event of a tsunami of a financial shock, emergency measures could be put in place fairly quickly, and at least something would be salvageable and best able to redress a balance.

But No, the SNP want Scotland’s money to be managed by England.

The English take all the risks and Scots take all the profits, it sounds really good, but that is where the fantasy parts company with reality.

The SNP Government's proposal is that England does all the work, Scots keep the pound in a currency union, how the result of a work ethic is that the remainder of the UK would deprive Scotland of the powers necessary to adjust the exchange rate or interest rates.

England would effectively be Scotland’s guardian angel.

Which begs the question, what would Salmond and Sturgeon be doing?

I don’t know and I am pretty sure no one else does!

Government isn’t a 9 to 5 affair.

National Institute of Economic and Social Research (NIESR) has teamed up with the Economic and Social Research Council to assess currency options for an independent Scotland.

And its grim reading; made more grim by the lack of public sector reform, the second term of the SNP Government was never about independence, it should have been about fixing government departments.

Scotland would start life heavily in debt to the tune of £153 billion.

As we have seen when numbers are quoted, they usually rise, remember the £40 million Scottish Parliament?

£440 million pounds that cost us, that cost us dear.

Scotland would have to sell all of its oil to the UK to reduce its debt.

You can forget Nordic welfare and you can forget the idea of an Oil Fund, the big pot of money that the SNP keep promise will just be a big empty pot.

No dough and no date forthcoming when it might even get started.

Debt is a killer when it cannot be serviced, and this debt doesn’t appear to be small potatoes.

NIESR director of macroeconomic research Dr Angus Armstrong said:

"Countries throughout history have considered how you reduce your fiscal burden. You either tax people, spend less or sell your assets. We recognise that selling assets is politically difficult and sensitive, but it's only because nobody is talking about the debt."

Would Scotland spiral into a situation like Greece?

Would the SNP sell off Scottish assets like Greece has done, digging a deeper hole?

Either experts claim that there is no "free lunch" for Scotland whatever constitutional or currency option it chooses, or breakfast or evening meal, everything would be cut back in terms of services, right through to Council level.

And the austerity will be unbelievably painful, things are bad now, but you can expect worst, much worst; the stuff that gets people out on the streets.

Riots; the breakdown of social order, you can’t wreck a country and expect everyone to sit back and lump it.

Dr Armstrong added:

"It would be prudent for the Scottish Government to retain the policy levers by introducing its own currency, which you would then tie to the pound. That, of course, is a complex thing to do and there are transitional risks. Reasonable people can disagree on this, but the approach we are taking is risk management. We don't know what the negative shock could be but with this sort of profile you would like to have a degree of freedom to move. That is not really a free lunch because it would still be very difficult. You would have to establish your credibility, and you need to have a stabilisation plan in place for achieving this."

Not only should there be plan A, but also plan B and plan C.

Armstrong said:

"There are several example of countries with Scotland's level of income and population which are perfectly successful and in Europe. Denmark, Sweden and Norway all have their own currency. What they all have in common is low debt-to-GDP ratios. So the question is: how does Scotland go from the starting point in 2016 to the position of these very successful countries? Can you be like this and have your own currency? Of course you can, just look at them. It's not obviously had any huge disadvantages using their own currency”.

It would take at least a decade with everything working properly to make that type of jump; that is why I kept going on about public sector reform in government and local government.

George Laird right again!
Experts are also skeptical about the SNP's plan to put money into a Norway-style oil fund, insisting "you can only spend the oil money once".

They said:

"It can either go in the oil fund, it can go to pay down your debt, or you can go and spend it in your fiscal accounts, but you can't have it three ways."

The trick with money is not to spend the capital but use the interest, one revenue stream which I blogged on was to legalise drugs.

This is a £3.5 billion cash market which could be used to benefit Scots, that money could be used to boost an Oil Fund.

The problem is that all political parties have a tough on crime, tough on the causes of crime mentality.

The wheels are falling off the Nationalist bandwagon, ‘one wheel on my wagon’ is looking like Alex Salmond and Nicola Sturgeon’s mantra, they may be rolling along but their “progress” speaks volumes of incompetence.

As to selling off Assets, this isn’t an option, the SNP Government need to increase assets.

The Scottish independence campaign is the most inept, clumsy and massive political fraud ever attempted on the Scottish people.

But the game’s up, doesn't look like the SNP will be taking Scotland into the Euro anytime soon!

Yours sincerely

George Laird
The Campaign for Human Rights at Glasgow University

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