Scottish Independence

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We might as well give the next £6 billion contract to Northrop Gruman to build carriers as give it to BAE to build ships in Scotland. They might come with cats and traps then.

You should give it to whichever company can it do it best. Get as good value for the taxpayer as you can. As long as they're allies, doesn't matter whether it's US or UK or Swedish or whatever. Irish Navy buys its boats off the UK.

 

 

Keeping £6 billion notes in house on a project like the new carriers is good for the UK as a whole. Technology, jobs and a shiny bit of kit at the end of it, government meddling aside. If Scotland go off on they're own, then they may as well build them in Virginia. Although VT Group have a couple of yards in Portsmouth.

 

You can't just scale up the capacity to build large defence platforms overnight.

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That is one pretty confused post, not even sure what you are saying in the first line.

 

As for the currency situation the Government have been very clear that currency union isn't on the cards if they vote yes.

 

As for the EU, if Scotland votes yes and leaves the UK and in turn the EU there is absolutely no chance of them becoming members in their own right within 18 months.

 

Don't mix up your failure to understand with me being confused.

 

The currency union is on the cards, trust me. Ask (Nobel Prize winning) economist Joe Stiglitz what's the best outcome for both parties and his answer is simple. Ask (Nobel Prize winning, and Scottish) economist Jim Mirrlees what's the best response if the UK doesn't permit currency union, and he says to walk away from their share of national debt. £100bn on the table here. Think the UK government will say it's "off the table" when you're talking about £2000 per man, woman and child? Would you be happy if your government made you pay £2000 to avoid a currency union with Scotland, Trent?

 

Absolutely no chance of Scotland being EU members within 18 months of independence, eh? Put your money where you mouth is. What odds will you offer me?

 

 

Somebody better tell the Gov. of the Bank of England then.

[Enda]

Somebody better tell the Gov. of the Bank of England then.

 

I think with ~£2000 per man, woman and child on the line, somebody might just have a word.

[Corcaigh]

 

 

 

 

That is one pretty confused post, not even sure what you are saying in the first line.

 

As for the currency situation the Government have been very clear that currency union isn't on the cards if they vote yes.

 

As for the EU, if Scotland votes yes and leaves the UK and in turn the EU there is absolutely no chance of them becoming members in their own right within 18 months.

 

Don't mix up your failure to understand with me being confused.

 

The currency union is on the cards, trust me. Ask (Nobel Prize winning) economist Joe Stiglitz what's the best outcome for both parties and his answer is simple. Ask (Nobel Prize winning, and Scottish) economist Jim Mirrlees what's the best response if the UK doesn't permit currency union, and he says to walk away from their share of national debt. £100bn on the table here. Think the UK government will say it's "off the table" when you're talking about £2000 per man, woman and child? Would you be happy if your government made you pay £2000 to avoid a currency union with Scotland, Trent?

 

Absolutely no chance of Scotland being EU members within 18 months of independence, eh? Put your money where you mouth is. What odds will you offer me?

 

 

A lot of lads are falling for the hard nosed positions which are adopted in the heat of battle that is the political campaign. Cool heads and high faluting diplomacy will reign supreme once it's all over and if the Scots have voted Yes. Such is the way of nation states in the 21st Century. 

[Enda]

Jesus, even lads from Cork are seeing sense on this.

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You say £2000 per man, but you need to look at it realistically and answer this question; how do you sell Scottish government debt when you've just welched on your own share of UK national debt? Of all the bluffs, Salmond having Scotland do an Argentina is the biggest, unless he really is that stupid.

Edited September 9, 2014 by Ads

[Avfc96]

You say £2000 per man, but you need to look at it realistically and answer this question; how do you sell Scottish government debt when you've just welched on your own share of UK national debt? Of all the bluffs, Salmond having Scotland do an Argentina is the biggest, unless he really is that stupid.

No, he really is that stupid.

 

All is well in his little Braveheart world.

[peterms]

The currency union is on the cards, trust me. Ask (Nobel Prize winning) economist Joe Stiglitz what's the best outcome for both parties and his answer is simple.

No, his answer isn't simple. Look again at the article you mention.

 

...Stiglitz...said that a currency union would be accepted after a yes vote, because the Scottish and UK economies were so closely intertwined.

"For the most part, I think these are bluffs. Whatever the outcome, there's going to be a negotiation and people are going to be looking at what's in the best interests of both parties, and there will be negotiations," he said...

... all three main UK parties have vetoed a currency union post-independence. Citing expert opinion from Treasury economists, the Tories, Labour and Lib Dems insist a currency union is not in the interests of Scotland or the UK.

With polls suggesting English voters are also hostile to a sterling pact, the UK parties argue it would involve the UK carrying the greatest financial risk because it would be underwriting a foreign country's banks – which in Scotland's case are relatively very large, even while its economies were in competition.

Scottish anti-independence campaigners, including Darling, insist it would also tie Scotland's hands and make it heavily dependent on a larger foreign government's economic decisions.

The economics thinkthank Fiscal Affairs Scotland said on Monday that a currency union would require so many compromises for an independent Scotland, over tax rates, borrowing or debt levels, it was "likely to involve severe curtailment of an independent Scotland's ability to influence its own future fiscal and monetary policy"...

..Before sidestepping a question on whether Salmond was right to say that sterling was an government asset that Scotland had a right to share, Stiglitz said GDP was too crude

...However, Stiglitz also endorsed the views last week of Crawford Beveridge, a Scottish National party donor who chairs Salmond's advisory panel, that Scotland could use sterling without a formal deal – a process known as sterlingisation or the Panama option, as Panama uses the US dollar informally.

But Stiglitz added a currency union could be weakened because the Scottish and UK economies would slowly diverge after independence – a trend that economists who oppose independence say would fatally destabilise a currency union.

As a member of the panel which produced the report that Salmond relies on, Stiglitz naturally defends its conclusions.  It is possible that there could be a currency union.  However, it would carry great risks for the rUK and would therefore be accepted only in terms and conditions which would mean a more dependent position for Scotland than at present.  Plainly a currency union without conditions would be great for Scotland and massively bad for rUK.  The position of rUK in negotiations will be influenced both by this fact, and by the hardening of public opinion in rUK after a yes vote.

 

Stiglitz seems to be saying he thinks a currency union may be accepted after negotiations (ie on conditions), that it will be weakened as the economies diverge (which he must know is why currency unions without political union don't work well or for long), and that sterlingisation is an option.  He's certainly not saying that currency union on terms Scotland wishes will be acceptable, or long-lived.

 

It's also interesting that he ducked the question about whether sterling is an asset that can be divided.  He must know it's not, but perhaps doesn't want to embarrass the man who commissioned him by saying so.  Which brings us to

 

Ask (Nobel Prize winning, and Scottish) economist Jim Mirrlees what's the best response if the UK doesn't permit currency union, and he says to walk away from their share of national debt. £100bn on the table here. Think the UK government will say it's "off the table" when you're talking about £2000 per man, woman and child? Would you be happy if your government made you pay £2000 to avoid a currency union with Scotland, Trent?

 

The negotiations will be about assets and liabilities.  The assets are things like oil, infrastructure, resources, reserves.  Liabilities are mainly the debt, with future liabilities like pensions presumably falling to each country.

 

Sterling is not an asset.  It cannot be divided.  Money can be divided.  The monetary system cannot.

 

What Salmond is saying is not that he wants to divide assets and liabilities, but that he is using the threat of refusing to agree to take on some debt unless he gets his way on entering a currency union.  It's purely a political stance, nothing else, and the talk about sterling being an asset is a deliberate attempt to disguise the fact that he's trying to divide assets, and then introduce a wholly different condition which is nothing to do with assets, to get his way on a quite separate issue.  It is playing well on the street, but he and the people he will be negotiating with know it's bullshit.  And so the discussion will be not about currency union in return for debt, but currency union in return for a set of conditions about tax and spending in indy Scotland basically being subject to rUK veto, much like Greece's budget goes to Angela Merkel for approval before the Greek parliament sees it.

[leviramsey]

Regarding the 100bn in debt, it's not at all clear that the better option for the rest of the UK is to trade Scotland taking on 100bn in debt in exchange for allowing a formal currency union.

The Scottish Government says that Scotland generated 53bn in tax revenue, with about 65.2bn worth of spending, for a deficit of 12.2bn. About 4bn of that is interest payments which would continue being incurred by the UK if the UK eats the debt, implying that the UK government saves about 8.2bn a year without having Scotland around; this savings more than covers debt service on 100bn pounds.

So the UK would not be in a position of needing to convince the Scottish government to take on the debt (and even if they did, there are presumably other maneuvers that could be used, e.g. taking Scottish pensions and/or nationalizing assets of Scottish banks in the UK, which are sure to be looked on favorably by the remaining UK electorate (it's not raising their taxes or cutting their benefits...)).

Whether the UK then accepts a currency union is then contingent on whether the union is a good deal going forward. If Scotland goes forward with their more or less avowed intention to have a looser fiscal policy than the UK, then Scotland is de facto creating future money to buy present money, which can only (ceteris paribus) weaken the pound, presumably in a way which the UK would prefer not happen. (It's also worth noting that in this scenario, it doesn't make a difference whether the 100bn is owed by the UK or Scotland and even if Scotland offered to take on more UK debt to get the 8.2bn saved to be lower than the cost of servicing the debt, it would only make Scottish fiscal policy worse) It's only possibly a good deal going forward for the UK if it meaningfully constrains Scotland to more or less match UK fiscal policy, but there's no reason for the Scottish Government to agree to those constraints under any set of circumstances.

I'll note also, Enda, that Stiglitz doesn't exactly say what you think he says (from the article you linked):

However, Stiglitz also endorsed the views last week of Crawford Beveridge, a Scottish National party donor who chairs Salmond's advisory panel, that Scotland could use sterling without a formal deal – a process known as sterlingisation or the Panama option, as Panama uses the US dollar informally.

But Stiglitz added a currency union could be weakened because the Scottish and UK economies would slowly diverge after independence – a trend that economists who oppose independence say would fatally destabilise a currency union.

The currency union would, in essence, only be worth getting in if one or both parties was planning to abandon the union, in other words, it's probably not a Nash equilibrium, and claims that it's the best option for all parties are probably more wishful thinking than anything else.

In short, I suspect the best course of action for the UK is to let Scotland go with their own currency and effectively get Scottish savers (who would be well advised to hold a certain amount of GBP) to essentially subsidize UK plc.

[Awol]

Sterling is not an asset. It cannot be divided. Money can be divided. The monetary system cannot.

That should be on the front page of every national newspaper tomorrow morning.

[CarewsEyebrowDesigner]

This thread just got hit by a levibomb.

[Awol]

Reference ship building for the RN on the Clyde post a yes vote, forget it. The RN has only every had complex warships built for it outside the UK during WW2.

An independent Scotland will categorically not be getting contracts for the RN from MOD, not least because tech share agreements between the US and UK governments would prohibit it, what with Scotland being a foreign country and all.

[chrisp65]

regardless of how stupid, deluded or over optimistic Salmond might be, he has one massive trump card to play

 

to date, at every turn, he's beaten Westminster politicians

 

whatever the 'right' argument about money or debt or oil, in the event of a yes vote, we'll have call me Dave and George fighting our corner, with in depth consultancy by Clegg and moral support from Milliband

 

best we hope they vote 'No' and save us from our own negotiators

[CarewsEyebrowDesigner]

It is a sorry state of affairs when Salmond is the canniest politician around.

[Demitri_C]

Whats odds Wales are next if the Scots go?

[Awol]

whatever the 'right' argument about money or debt or oil, in the event of a yes vote, we'll have call me Dave and George fighting our corner, with in depth consultancy by Clegg and moral support from Milliband

In the event of a Yes vote, at least 3 of those 4 turkeys could well be out of a job - perhaps the only silver lining for those south of the DMZ. Edited September 9, 2014 by Awol

[Awol]

Whats odds Wales are next if the Scots go?

Zero, until sheep are the most important global commodity.

[MakemineVanilla]

Despite my sentimentality about the union, I now think a 'Yes' vote would be the better outcome and come at a lesser cost than having to bribe the Scots to vote 'No'.

 

Ordinary English people have far more to gain from a 'Yes' vote, because if the SNP's project is a success and becomes an example to which England's regions compare very badly, the electorate will realise that there is a viable alternative to the present centre-right consensus.

 

If it succeeds the Scots might have to close their borders to prevent English immigrants from exploiting the Scottish welfare state, after the Tories have destroyed our own.

 

If it fails, it will cost us nothing.

[Dr_Pangloss]

 

 

 

 

That is one pretty confused post, not even sure what you are saying in the first line.

 

As for the currency situation the Government have been very clear that currency union isn't on the cards if they vote yes.

 

As for the EU, if Scotland votes yes and leaves the UK and in turn the EU there is absolutely no chance of them becoming members in their own right within 18 months.

 

Don't mix up your failure to understand with me being confused.

 

The currency union is on the cards, trust me. Ask (Nobel Prize winning) economist Joe Stiglitz what's the best outcome for both parties and his answer is simple. Ask (Nobel Prize winning, and Scottish) economist Jim Mirrlees what's the best response if the UK doesn't permit currency union, and he says to walk away from their share of national debt. £100bn on the table here. Think the UK government will say it's "off the table" when you're talking about £2000 per man, woman and child? Would you be happy if your government made you pay £2000 to avoid a currency union with Scotland, Trent?

 

Absolutely no chance of Scotland being EU members within 18 months of independence, eh? Put your money where you mouth is. What odds will you offer me?

 

Although you make some good points (and I'm not saying I disagree) I don't think the 'Sverige Riksbank Prize in Economic Sciences in Memory of Alfred Nobel' is actually a real Nobel prize.

[blunther]

Isn't the oil technically a 'UK' asset? And Scotland would be choosing to voluntarily leave the UK. If Scotland don't want the debt, we'll have the oil!