Effect of Scottish Independence Vote

Buzby

black_taxi wrote: »

Britain means so much more to England,I drive a cab edinburgh,and English punters I pick up are genuinely sad if Scotland left.

I'm undecided ,the union has been 300+ years!and it's a huge emotional decision to leave

It may be, but for many being 'emotional' is worth the new dawn it will bring. After all, how worse could it get? As foreign tourists flock in, many see it as a separate country anyway - only those from down South will see it as one of the colonies....

Buzby

TCA wrote: »

Ah but it is a game. Politicians campaign for all sorts of things they can't get. Give it time. Plan B will emerge eventually.

Certainly - if we are unable to keep the £ for an interim period, then as the UK Govt very kindly agreed to guarantee Scotland's share of the National debt, the solution is to say 'if that's the way you want it, keep the debt' and we walk away with a clean sheet. It wasn't going to be that way, but......

paparossco

Wow, this thread takes me back to the one discussing Public Sector pension reforms.

For me the 'elephant in the room' is 'devo max'. That is what I'm looking for, along the lines of Jersey, IoM etc in an ideal world. Apparently we are too stupid to cope with 2 questions on the ballot paper...... but I seem to remember we had 2 on the Devolution ballot......

scott_lithgows

paparossco wrote: »

Wow, this thread takes me back to the one discussing Public Sector pension reforms.

For me the 'elephant in the room' is 'devo max'. That is what I'm looking for, along the lines of Jersey, IoM etc in an ideal world. Apparently we are too stupid to cope with 2 questions on the ballot paper...... but I seem to remember we had 2 on the Devolution ballot......

Cant help but think devo-max will come into play closer to the date as a compromise.

black_taxi_2

see scotland from my kitchen window

talexuser

TCA wrote: »

Don't shoot the messenger.

I certainly wasn't having a go at you. Just politicians giving us hypotheticals upon hypotheticals upon hypotheticals and thinking we take them seriously enough to actually believe they know what they're talking about when they can't even run the fundamentals properly.

TCA

paparossco wrote: »

For me the 'elephant in the room' is 'devo max'.

scott_lithgows wrote: »

Cant help but think devo-max will come into play closer to the date as a compromise.

I'd almost say devo max would get overwhelming support on the ballot paper. The problem is that no political party backs it and so there's no way to implement it.

What is good is that the independence debate is forcing the unionists to look at ways to improve existing devolution. So there may be the odd good thing resulting from a No vote. At least I'd hope they'd be offering something more than the status quo come September.

Edited to add this link below to a devo max article which just appeared on the BBC website:

http://www.bbc.co.uk/news/uk-scotland-scotland-politics-26245611

TCA

talexuser wrote: »

I certainly wasn't having a go at you. Just politicians giving us hypotheticals upon hypotheticals upon hypotheticals and thinking we take them seriously enough to actually believe they know what they're talking about when they can't even run the fundamentals properly.

No worries. I agree entirely. I have grave misgivings about figures coming from any government: UK, Scottish or otherwise. I've worked in banks and when I saw the SNP figures for the 'George tax', it reminded me of many 'back-of-fag-packet' calculations drawn up in a hurry by somebody with a calculator and reference to a few stats. I take them all with a rather large pinch of salt.

jamesd

TCA wrote: »

Yes, I think Salmond is attempting to portray Osborne as being unreasonable, unwilling to negotiate and acting contrary to rUK's interests.

That'll be tough, since he's acting in those interests, not contrary to them. It's actually also in the interests of an independent Scotland but Salmond has a political promise to try to keep so can't readily accept that.

TCA wrote: »

I agree it's not for Salmond to talk for rUK and they don't like it when he does. But that's of little relevance to him. It's how the Scottish voters view the situation that matters to him.

Right, but he shouldn't expect anyone outside Scotland with a clue to believe him on the currency argument, because it just doesn't make sense for the rest to agree to it unless it's accompanied by pretty thorough control over the fiscal and budgetary policy of the independent Scotland.

The problems with split control are part of why there's been trouble in the Eurozone, with peripheral countries subject to policies that central countries want, to their detriment. But the central companies enforce it because it's necessary for the financial stability of the Eurozone and Euro.

Britain and Northern Ireland would have the same need for fiscal and budgetary control as the way the Eurozone is moving and it would be foolish to even sign up for something else knowing it will fail. So it's not something that should be expected.

A Pound-based currency probably wouldn't be to Scotland's interests anyway. One thing that helped the UK economy was the ability to devalue the Pound, which happened in 2008. With a single currency Scotland would end up tied to the larger economy with a currency that moves without regard for its needs.

A possible alternative is a currency peg, linking a Scottish currency to the value of the Pound. That's been done in various places, perhaps best known in HK. The problem with this solution is that it means that local interest rates in the country with the pegged currency have to move up and down to keep the peg trading range in line with the currency being followed. Or they have to use foreign currency reserves to do it, or some combination of the two. That can work but making local interest rate serve a currency peg rather than the general needs of the Scottish economy wouldn't be a very clever move economically, even if it looks best politically to those in favour of independence as a fallback position.

A good example of something along the peg solution failing is the UK being forced out of the Exchange Rate Mechanism, in spite of interest rates that increased greatly to try to sustain it. Higher interest rates than are good for the Scottish economy and eventual failure is the likely eventual course but it might work for a while as a transition arrangement towards a fully floating currency or possible EU and Eurozone membership later.

TCA wrote: »

IMO, his stuff about fx transaction costs for English business doesn't stack up anyway. The Scots would face the same in far greater proportion.

I think it might be more useful than harmful actually. Foreign exchange with Scotland might also fix the silliness and high costs currently associated with consumer-level transactions in Euros as part of a Scottish currency package, whatever that might turn out to be.

TCA wrote: »

All I'm saying is that he's put forward his preferred option for a currency union. Regardless of what statements come out of Westminster, he's hardly likely to just jump to another option. At least not yet........

Just don't be surprised when he doesn't get his way on it. The question is whether he can continue to foll voters long enough, or whether they fail to be fooled and he still has time to change to something realistic without having harmed his cause and personal credibility too much first.

It's another case where there's an entirely practical solution as part of any actual independence, which just needs to be recognised and used.

jamesd

TCA wrote: »

I don't know the real figures and can't recall if HM Treasury gave an exact proportion, but this below is the response from Scottish Finance Minister, John Swinney

I invite the Scottish Finance Minister to explain to voters that he will, if finance minister of an independent Scotland, allow a major investment bank to fail, given that allowing the failure of Lehman Brothers in the US was one of the major failures that dramatically worsened the economic crisis in 2008. It's unclear whether there was time to save it but it was necessary.

Some of the changes since then have been to allow central banks to order banks to do things and enact very large-scale rescues. But those rely to some extent on the backing of the government and it's own financial credibility. And that's an area where an independent Scotland just won't be able to match the UK, in part because of scale and in part because of the long history of the UK financial system that helps to give outsiders confidence in it.

Best to forget that claim, it doesn't make sense except to try to fool voters, unless the plan is to have most of the investment activities not part of the Scottish economy by shipping them south of the border. That's not something that would be wonderful for the Scottish economy. Though I'm not sure it could be prevented anyway because of the lack of global scale of any prospective Scottish market compared to the global presence of London in markets. though Ireland and others have used policies to encourage such activity in their territory, and it's not impossible that an independent Scotland could try the same, if it didn't lock itself into step with the Pound and UK economic and tax policy with a currency union. A currency peg alternative might well enable this sort of approach - the local "offshore" Scotland.