Scottish independence

HAMISH_MCTAVISH

Chadsman wrote: »

No cuts- never? That is not a reasonable claim to make for any politician- even when in control of their own currency.

Indeed.....

Scotland spends much more than the rest of the UK. Spending per head in Scotland is between 12% and 16% higher than the UK average. Part of the reason Scotland is relatively well off (income per head excluding oil is around 94% of the UK average) is that it is boosted by this higher level of public spending. The pressures for higher spending, not least from the country’s ageing population, will intensify.

In 2012-13, the latest Scottish government figures, public spending in Scotland was £65.2bn. Taxation, excluding North Sea revenues, was £47.6bn. The gap was equivalent to 14% of GDP; bigger than the UK deficit at the height of the crisis. Only by including North Sea revenues was Scotland’s budget deficit brought down to 8.3% of GDP; bigger than the 7.3% for the rest of the UK.

This, in fact, has been the position for the past 25 years. Even with a geographic share of oil revenues, and even in a period when North Sea production was at a peak, Scotland has run a bigger deficit than the whole of the UK.

Its position can only get worse as North Sea revenues decline. The Scottish government, taking what appears to be an unrealistically optimistic view of oil revenues, predicts a budget deficit for Scotland in 2016-17 of 3.2% of GDP, compared with 2.4% for the UK as a whole. Independent assessments from the Institute for Fiscal Studies, Citibank and others suggest a deficit of between 5% and 6%.

It could easily be much worse. If, as feared, the uncertainties following independence hits the Scottish economy hard then this, in combination with weak oil revenues, could easily push the deficit to 10% of GDP or more. Scotland would start independent life on the shakiest of fiscal footings.

Every independent assessment of Scotland’s fiscal position points to the need for bigger spending cuts than the UK government’s austerity programme and tax hikes. “If an independent Scotland wanted to achieve a sustainable medium and long-term fiscal position, further tax increases and/or spending cuts would be needed after independence,” the IFS says.

To replace the falling oil revenues and achieve a manageable budget deficit, Scotland will either need its own austerity – over and above the planned £400m in defence cuts – and higher taxes.

The IFS suggests that over the medium term tax increases equivalent to 10 points on the basic rate of income tax and an eight-point hike in the main rate of VAT.

The Scottish government’s response to its fiscal problem has been to pretend it does not exist. Its white paper in the summer proposed net giveaways of more than £1bn. John Swinney, its finance secretary, has promised to end the Westminster government’s austerity. Salmond, astonishingly, has won support by pledging to protect an NHS he already has control of form privatisation and cuts.

Politicians say a lot of things before votes.

When fiscal reality hits home, things will look very different.

http://www.economicsuk.com/blog/002045.html#more

black_taxi_2

bookies cut YES to 7/5

ColdIron

Betfair are offering 12/5 on Yes although it's drifting back from the recent peak, still a long way away from the evens that the polls would suggest
http://uk.site.sports.betfair.com/betting/LoadRunnerInfoAction.do?marketId=110033387&selectionId=5334893&timeZone=Europe/London&locale=en&region=GBR&brand=betfair&currency=GBP

bowlhead99

My Betfair bets on No have been matched between 1.49 back in April to under 1.20 a month ago - I've 'reinvested' quite a few winning bets from other sports onto my referendum postion over the last half a year. although I hedged some of them out with bets back the other way when the rate fell a lot which locked in some guaranteed profit.

I still have a sizeable net 'No' position but not sure if I'll add further. Perhaps not. A key thing is that the bets reflect the market for what people all over the UK think will happen (including everyone from those opening their first position to those cashing out a profit or a loss and individual betting organisations who are hedging their own commercial positions and exposures having already taken £x of bets to date on one side or the other). It can be far removed from the bets that a strictly local scottish betting shop would take if it restricted its customers to those with polling cards, and in turn, that would not be expected to match the postion that the actual voters themselves put on their cards on the day.

Hopefully for my betfair position, No will emerge victorious But as I probably already mentioned either on this thread or elsewhere, I might look at having a bigger punt on the FX rate or equity markets nearer the day, as GBPUSD already took a bit of a hammering this week which some attribute to this uncertainty (amongst other things).

ColdIron

Most of my matched bets were between 1.21 and 1.35 although unlike you I did not lay off anything around 1.16. In hindsight perhaps I should have, still in for a penny etc and I took a little more in the last few days at 1.5. A win's a win eh?

MIKESISHLA

talexuser wrote: »

Got to be some reaction to a yes, but if they vote for independence, and then refuse to accept any share of the national debt, then I can't see world markets having much trust in a new Scottish government's promises or bonds, after refusing responsibility for historic liabilities, especially if financials also relocate to London.

[FONT=Comic Sans MS, cursive]
Salmond has stated that unless we get to keep the Pound we will not take a share of the National Debt. He declares that,'Keeping the Pound is the sovereign right of the Scottish people.' [/FONT]
[FONT=Comic Sans MS, cursive]
We know,as does Salmond, that ultimately an Independent Scotland will be forced to take its share of the National Debt but its just the sort of statement that is guaranteed to spook Financial Institutions. Lenders will be reluctant to risk giving loans to an Independent Scotland and those who do will exact a very high level of return because of the perceived risk. He has condemned generations to very high mortgage rates should Scotland choose Independence. He is a bare faced LIAR who has no conscience whatsoever about what he says as long as it get him the power he craves.[/FONT]

MIKESISHLA

[FONT=Comic Sans MS, cursive]Can anyone help me please?[/FONT]
[FONT=Comic Sans MS, cursive]I need to identify which Financial Institutions are English and that will remain English if my fellow Scots decide to commit National Financial suicide in the forthcoming Referendum.
I am considering the Nationwide BS but it has just amalgamated with the Dunfermline BS. HSBC is another one that is worthy of my interest.
Can anyone give me the benefit of their experience please?
I am looking for Financial Institutions that Alex Salmond (aided and helped by the UK Government) cannot impose a sudden Capital Flight ban on?[/FONT]

zagubov

InvestInPoker wrote: »

Should probably sue her for fraud or false advertising or something if its a yes vote and SNP make a cut afterwards.

If we could sue politicians for breach of promise we'd be awarded so much money we might as well give up growing food, making things and providing services, and switch to a litigation-based economy

bowlhead99

MIKESISHLA wrote: »

[FONT=Comic Sans MS, cursive]. Lenders will be reluctant to risk giving loans to an Independent Scotland and those who do will exact a very high level of return because of the perceived risk. He has condemned generations to very high mortgage rates should Scotland choose Independence. He is a bare faced LIAR who has no conscience whatsoever about what he says as long as it get him the power he craves.[/FONT]

I agree with your sentiment that those kind of comments will spook the markets even though they can make their own judgements about how it will all have to shake out in the end.

Certainly, the whole purpose of the nationalist party is to rouse emotions and stir the soul of passionate nationalists to do things that follow his political view of a nirvana where everything is rosy because you run it yourself - if you were only able to get every advantage of teaming up with another country without actually having to team up with them and accept their veto. And damn the English and the rest of the world if they don't just nod along with it.

However, negotiating hard as part of an independence move does not mean that the lenders would think that Scotland would happily default on legitimate debts from sovereign fundraising by their own central authorities in a post-independence world. Ergo, it does not necessarily scare markets into providing the finance for mortgages down the line at massive massive cost.

Clearly the fact that Scotland is likely to be an economically weaker nation than current UK, with a variety of demographic issues to contend with and declining North Sea revenues, may make the cost of borrowing higher. That would be the case whether or not he was full of bluster.

I'm not a fan of him or his politics or economics, but at least by avoiding writing in Comic Sans and declining to shout about him being a power craving bare faced LIAR, I might have people think I'm being a grown-up about it.

Archi_Bald

MIKESISHLA wrote: »

I need to identify which Financial Institutions are English and that will remain English

You simply need to ensure your financial institution is, and remains, a member of the FSCS.

Leave the rest to the regulatory bodies.