Friday, August 8, 2014

Scottish independence: ‘White collar flight (part 2), banks may have to relocate to England according to a new report, Alex Salmond’s misjudgement on the economic impact of not having your own currency shows him to be unfit to be First Minister, how much longer can SNP MSPs remain silent, he has to go!

Dear All

Money is pretty important for most of us, in the context of a country, money takes on more than just value it has to buy goods and services. Money in the 21st Century is a weapon. If you follow news, the political agenda is dominated by it day in and day out, not just in this country but in every country.

In the past, people thought of warfare in the traditional sense of guns, bullets, rockets, tanks and planes. This Century will be marked by a new type of warfare, ‘financial warfare’, countries conquered not by violence but by economics.

The Chinese Government don’t get enough credit for their achievements in this field.

They went to Africa and conquered many areas, rather than bomb their way to take over; they went the other way, and build schools, roads and hospitals to spread their influence along with factories. People could certainly learn from their low key approach in how they secure materials for their country.

Today, I caught First Minister’ Question time, the event itself is a farce and an affront to democracy, however the currency issue was raised yet again because on Tuesday, Alex Salmond was nailed to the wall on it by Alistair Darling in a TV debate.

One person I know in passing decided to question me on politics tonight as he found the answers from Salmond to be shockingly poor in the STV face off. Tuesday night certainly opened his eyes where Alex Salmond was concerned.

Anyway, what caught my interest in the FMQs was the look on the faces of the SNP MSPs sitting in on it to give him ‘support’. They looked dejected, miserable and were hanging their heads. The SNP know the game is over, they will still go through the motions but they must know from polling they face not only defeat but humiliation.

Scotland’s unpopular Deputy First Minster Nicola Sturgeon was there however she couldn’t fake enjoying herself; the look in eyes gave her way. Recently she was bragging that the SNP are in ‘high spirits’ after the Salmond debacle.

Which is why she was sitting with her face like thunder, like someone had run over her pet rabbit and kept on trucking, overcome by joy and happiness? There has been some talk of replacing Salmond in the debates with Sturgeon, anyone really want to see her ridiculous spectacle of shouting people down?

I think not, Salmond is the lamb and the lamb is to be slaughtered.

Having botched the entire campaign, the main theme which has emerged is currency; the correct solution was the Scottish pound that should have been Plan A from the start. If the UK had wanted or suggested currency union, it would have to be looked at, but they don’t want that politically and neither do the majority of people in the rest of the UK. Partnership requires trust and goodwill; Salmond stupidly threw trust and goodwill under the bus by stating he will default of Scotland’s share of the UK debt.

Although there are many examples of stupidity this one will linger in the minds of people long after the Scottish independence referendum has gone. You could say that Salmond has pushed Scotland’s major banks into considering quitting the country after independence. It seems Salmond’s rhetoric of “its Scotland’s pound” in a Panama-style approach without the UK’s agreement has sent alarm bells ringing in business.

The so-called “dollarisation” approach would be more proof that the SNP intend to take Scotland into the Euro in order to have the European Central Bank as their “lender of last resort”. The problem with this is that the EU may shut Scotland out via the veto. In order to safeguard business UK regulators and the banks’ shareholders would insist that major institutions seen as “too big to fail”, like RBS and Lloyds, would need to be located in the UK.

Awhile ago I did a post on ‘white collar flight’, basically the National Institute of Economic and Social Research (NIESR) just confirms my thoughts, big business doesn’t like risk for no reward. And anyone with any sense who heard Salmond effectively brag about having no plans for independence must have thought what kind of crackpot think this would pass as ‘fine with me’?

Although Alex Salmond is under pressure this week to set out his Plan B on currency, that isn’t the real question, why do the SNP want to take Scotland into the Euro? The decision is and always has been political. The lesson of what happen to Greece plainly didn’t sink in at the SNP; maybe it is because some people are learning impaired or maybe they just live in denial because they think Salmond and Sturgeon have all the answers. They have answers alright; the problem is that they aren’t the answers to the questions being asked. Dollarisation can only be a temporary measure because of the scale Scotland’s financial service industry, and it would be a last resort. A country needs its own currency, the system in the UK works well because of integration; it isn’t perfect politically or regulatory because its flaws were exposed in the financial crisis.      

Alex Salmond’s threat to walk away from Scotlnd’s share of UK debt could also see Scotland frozen out of the international markets and struggle to gain EU membership, each year of non EU membership would mean an annual loss of £300 million just on the UK rebate alone coming to Scotland, plus no EU grants for development or farming subsides. Both rural and urban Scotland would suffer. It would take decades to build up a full funded reserve and then there is the ‘Oil Fund’ which the SNP hark on about, with so much money ring fenced cuts to budgets and higher taxes must come to balance austerity budgets.

As I previously blogged, the second term of the SNP Government should have been about government and local government reforms to prepare the country for an independence bid.

Nothing was done on that issue!

It has been said that Scotland’s unpopular Deputy First Minster Nicola Sturgeon has been briefing against Alex Salmond by Johann Lamont although this would be highly amusing, we should remember that Ms. Sturgeon isn’t likeable and as such doesn’t tick the right boxes. Nicola won’t be ‘saving the day’ because the day has already been lost.

And you can take that to the bank!

Yours sincerely

George Laird
The Campaign for Human Rights at Glasgow University

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