Indy2, Scottish pound, and house prices

Shaka_Zulu

A_Medium_Size_Jock wrote: »

If you can't tell that, there's no knowing what else you misinterpret.

He's from Edinburgh you know what they say about them..........

"You'll have had your tea!"

A_Medium_Size_Jock

dunstonh wrote: »

Emotions aside, there does need to be sensible questions asked with sensible answers given. Unlike last time around. Hopefully no project fear from one side and no land of milk and honey from the other.

1 - how Scotland would survive by removing itself from its largest market - the UK. (or what impact what that have on the Scots)
2 - Scotland's financial services industry would not be able to service those in the EU whilst outside of the EU and would not be able to service those in the UK if they rejoin the EU. All scenarios would lead to job relocation.
3 - The previous referendum priced oil at $100. How does funding work using current pricing?
4 - Brexit would see further devolution to Scotland. Rejoining the EU would see giving up those rights to Brussels. Is there an appetite for that.
5 - Would there need to be a hard border?
6 - Would Scotland be a net contributor to the EU coffers? (I believe that is likely from what I have read).

Could Scotland be broken up if parts of Scotland vote to remain in UK. Using Sturgeons own argument against her that people in those regions didnt vote to leave the UK and should not be removed against their will. A shifting of the borders maybe?

Ooh .......... like for example the Islands remaining in a non-Scottish UK would totally bu@@er up that piffle about so-called fishing rights, wouldn't it?

Or oil - said to be heading permanently sub-$50 despite the best attempts of OPEC and others to raise prices?

Or Hadrians Wall rebuilt? Only partially farcical that since - as you suggest - there would have to be a hard border.
Of some sort certainly.

But no, we're not meant to consider such trivialities.

antrobus

iwilson16 wrote: »

..My big concerns in an independent Scotland are:

1. Increased austerity and tax rises to account for the deficit

Very likely. £8 bn a year is a lot of money to lose.:)

iwilson16 wrote: »

...2. A devaluation of the new Scottish Pound (or whatever) against the GBP...

The new Scottish pound will be pegged to GBP. This new (hypothetical) independent Scotland will have a £100 bn plus in GBP denominated debt.

edinburgher

Speak for yourself. At least there's good honest open debate on here. Not sanitised as it is in the media. Problems are there for all to see. Just as there are in the rUK. There's no quick fixes or solutions.

I think 'debate' is very generous. This board basically exists so that the trolling can be focused into one point of darkness

A_Medium_Size_Jock wrote: »

I think that if you could be bothered to look, many are Scots.
Myself included.
If you can't tell that, there's no knowing what else you misinterpret.

That's a straw man, I never said that there weren't any Scottish sods who choose to denigrate their home.

I'm not talking about independence yay/nay, I've no dog in that fight at this point.

He's from Edinburgh you know what they say about them..........

"You'll have had your tea!"

Actually I'm not, I discovered several years ago that you can't change your forum name once it ceases to become applicable.

TrickyTree83

iwilson16 wrote: »

If Scottish independence did actually happen, with its own currency, then do you think that the currency would devalue against the GBP?

My big concerns in an independent Scotland are:

1. Increased austerity and tax rises to account for the deficit
2. A devaluation of the new Scottish Pound (or whatever) against the GBP

I'm not far off retirement (in Edinburgh), and its #2 that really concerns me, as approx half my net-worth is tied up in a flat in Edinburgh.

I'd very seriously consider selling (even at a loss) before Independence happens, and moving south.

so any ideas on what might happen? Or are there too many unknowns to guesstimate at this stage?

Thanks
Ian

Ian,

#1 is a nailed on certainty.

Look at the jobs at risk from independence vs the jobs at risk from Brexit.

Look at GERS, look at the Scottish trade balance (or imbalance you might say).

There is no way on this Earth that iScotland is coming out of independence without a significant hit to their economy, increases in taxation or severe expenditure cuts. They will want to siphon off business from the rUK but if the rUK gets a good enough deal, they'll only be heading one way unless the expenditure is dealt with via cuts that make Conservative austerity look like Scotland is flush in the union.

Don't take my word for it, do the reading. If you'd like I will supply the blogs, papers, articles, etc... from the UK and Scottish government, economists (Fraser Of Allander Inst. in particular), statisticians, academics from Scotland and the US, etc...

GreatApe

Scotland will be fine so long as she adopts a free floating Scottish pound.

Fundamentally there is no reason to suspect the Scottish nation would be less productive and thus poorer than the English. That is without even considering oil and gas. They will be OK

TrickyTree83

GreatApe wrote: »

Scotland will be fine so long as she adopts a free floating Scottish pound.

Fundamentally there is no reason to suspect the Scottish nation would be less productive and thus poorer than the English. That is without even considering oil and gas. They will be OK

If OK means higher taxation or swinging cuts or a combination of the two then yes.

There's many facets to it and none of them make good reading for iScotland. It's little to do with the currency and the productivity, more to do with the standard of living and governmental operation they have become used to and how that is financed. As things currently stand, the Scottish deficit would be as bad as the Greeks. The Greeks could leave the Euro and take the drop in living standards for all to begin to improve the prospects of all, but there's no magic bullet, but the SNP will likely try to sell one.

Thrugelmir

GreatApe wrote: »

Scotland will be fine so long as she adopts a free floating Scottish pound.

Needs a Central Bank first. RBS is hardly fit for purpose.

edinburgher

If OK means higher taxation or swinging cuts or a combination of the two then yes.

Last time I checked, we were already getting both of those as part of our membership of team UK?

Also, I think you meant swingeing.

TrickyTree83

edinburgher wrote: »

Last time I checked, we were already getting both of those as part of our membership of team UK?

Also, I think you meant swingeing.

Haha, no no. (yes I meant swingeing, auto-correct embarrassed me )

Think of it like this, Scotland is going to have to cut ~6% of its GDP from the deficit to get in line with EU ascension rules and a further ~3% if it wants to balance the budget.

Then factor in things like the Border Effect, which occur regardless of the labelling of a soft/hard border. It's been documented the world over and you can see the research paper from Yale university, the UK governments take on it and the LSE's take on it. It's a thing, and it will happen to both neighbours. That is currently forecast (admittedly with plenty of doubt) to be circa 5.5% of current Scottish GDP. Needless to say this will exasperate the deficit:GDP ratio further if current spending continued.

It would require one or more of the following:

- devaluation of Scottish currency to deal with it, so pegging to the £, $ or € won't be an option. Needless to say that also means Scotland's imports become excruciatingly expensive compared to inside the union.

- tax rises, having higher taxation than a neighbour to the south to whom many will have the desire/ability to move to means you risk flight of capital, jobs, etc... and possibly a crash in the housing market there because of it. I doubt there will be a gold rush up to Scotland because of Brexit due to EU equivalency law and the deal the PM strikes with the EU will probably grant us enough access to mean that all that is required are gold plate offices to continue as normal.

- spending cuts, these will undoubtedly have to be higher than Scotland has seen to date unless taxation or devaluation takes the hit. If cuts were to come, free prescriptions, free university tuition, the NHS, education, policing, etc... would all be under severe threat. Adding that organisations are now coming out saying that Scotland will be required to re-apply to remain part of organisations they currently are with the UK. Meaning that NATO would require the 2% of GDP military spend, so there will be no cost cutting measures there, except due to the border effect which will wipe some of the current GDP away, small blessing in disguise I guess.

And any of these will be on a greater scale than Scotland has seen from the Conservative government that some in Scotland appear to hate so much. Remember that Scotland will be taking on its share of the UK debt too, plus this existing deficit. It's grim.

Some will say Scotland can use assets to purchase away a lot of the debt. That Scotland owns ~8% of all assets in the UK, conversely that would mean the UK owns ~92% of all assets in Scotland too, they would need to be purchased/bartered if they were to be kept.

Some say Scotland can set up an oil fund to help offset higher spending (tacit acknowledgement of the dire financial situation). Yet they haven't looked into how feasible it is. A UK government paper shows that a sovereign oil fund would require the same tax rises/spending cuts for as long as Scotland diverted money into the fund and that after 20/30 years (iirc) of paying into the fund it would be worth something like 5% (iirc) of the fund that Norway uses to offset its spending which is to small to be used for the proposed purpose.

Some even say that they can recoup the cost from Whiskey Export Duty, which is a complete myth. Or that they're already sending Westminster 4 times as much money as Westminster sends back (:rotfl:), another complete myth.

I've looked and looked and looked because of constant debate on the Scotland thread into the economics of this. It's grim whichever way you spin it. An independent Scotland will certainly be a poorer Scotland that increases the suffering of its people more than Brexit. I saw a hashtag related to #indy2, it was #HopeNotFear, yet hope is not going to give people jobs, put food on the tables and roofs over heads, and the people ought to rightly fear the stricken economy that awaits iScotland.