Money.... Money....Money

Time for all open-minded people to try to pull the various strands of the Scottish argument together – and make a decision. To that end, I have copied the 21 posts I have made this year about the subject with a view to create an edited version for an E-book - which I will post later this week on my website.

But I still have to catch up with my reading on the matter.

The library on the subject I have been building up this year has a small pamphlet Scottish Independence; Yes or No which I got round to reading yesterday. The first 100 pages (by George Kerevan) consists of an elegant argument for independence (complete with footnotes) – the last 50 pages of a sloppy and emotional argument against (with n’er a footnote) - by Alan Cochrane. Both writers are journalists. So far, so bad.

Stephen Maxwell was one of the Scottish Nationalist intellectuals and produced in 2012 a balanced and sensitive argument – Arguing for Independence – evidence, risk and the wicked issues . It’s essential reading and groups the analysis of the case for independence into separate chapters on “the democratic case”, the economic, the social, the international, the cultural and the environmental, ending with a set of questions and answers to which he gives the lovely title “Aye, but”……Interestingly he gives a strong assessment of the economic case but is much more dubious of the “social” case – pointing out that the English can’t be blamed for the much higher levels of poverty and ill-health in Scottish society than south of the border.   

There are a lot of books about this issue – most trying to be balanced and objective. Sadly this makes for boring reading. There is a saying that “the devil has the best tunes” – by which, I must immediately say, I do not mean to malign those arguing for independence. I am, however, a natural sceptic (a quality which itself tends to be maligned) who has to admit that those arguing for independence do tend to have the better arguments…..

And, by the way, I do need to emphasise that – despite the terminology - this is not an argument about “nationalism”. The party in power in the Scottish Government is called the “Scottish National” party – not nationalist. In April, I spelled out that the argument is actually an ideological one – it is “neo-liberalism” that the Scottish voter rejects…not the English.....And the majority of educated Scots are at one on this. Its cultural elite (however defined) supports independence. Only its (discredited) political and commercial classes defend the Union.

But the question for me is how an independent Scotland could beat the markets and/or protect itself from the austerity which has become the prevailing policy in European countries. The central issues have become, for me, those related to the currency and to the Scottish budget - which are difficult for most people to get their head around.   

Adam Tomkins is one of the clearest voices in the debate – which is surprising for a constitutional lawyer. One of his most recent contributions could not be clearer

A core component of the case for Scottish independence is that the Nationalists wish to pursue fiscal policies significantly different from those adopted south of the border: much of the argument for independence has been framed as an argument against austerity. Yet, were an independent Scotland to enter a currency union with the rUK it would be unable to extricate itself from London’s fiscal policies.

The First Minister of the Scottish Government has made it very clear that a “Yes” vote means a currency Union with England (or remainder of the Union). The British government and all opposition parties say this will not happen (too much risk for their economy). 
Those who support independence say this is simply bluff but can’t really contemplate the remaining options – a new currency, the euro or a currency pegged to the pound. 

In the heat which surrounds this issue, few are looking at the implications for the Scottish budget of currency union – namely complete loss of fiscal sovereignty.

Anyone with any sympathies with the Scottish urge for what used to be called “self-rule” has to be prepared to wrestle with the significance of this issue. “Sovereignty” and “freedom” are words which people throw around too easily…..

I used to respect the campaigning (British) journalist George Monbiot but his latest, incendiary piece about Scottish independence shows a wilful ignorance of the real issues at stake. This is crass journalism at its worst - and the Guardian should be ashamed of printing it.

Postscript

Starting, just now, my editing of the 21 posts on the issue this year, I was reminded of the thoughtful website of someone who had been Deputy-Leader of the Scottish National Party. Like several others he has now parted with the Party – although he still favours independence.

His blog is therefore one of the most important for anyone with an open mind….A recent post

 rubbished the TV debate between the leaders of the 2 campaigns and made a startling reference to the “Fiscal Commission” which the Scottish Government had set up

This august body, with its two Nobel laureates has said a "currency union would be in the best interests of both Scotland and the rUK". The two massive caveats which accompanied that statement are NEVER quoted. They are, "in the immediate aftermath of independence" and "it will not give Scotland control of the economic levers". In other words, it is not independence.

One of the most important conditions was as follows, "a joint fiscal sustainability agreement is established to govern the level of borrowing and debt within the sterling zone". John Swinney, Finance Minister, is on record several times, as agreeing with the conditions laid out by the Fiscal Commission. None of this was brought up during the debate between Salmond and Darling.

One can see why Salmond would want to avoid making mention of any of that at all costs, but what was Darling thinking about?Instead of hammering Salmond with, "What is your plan B Alex?" he should have said, "The Fiscal Commission laid out the following conditions for a currency union to work, conditions which your Finance Minister has accepted,

* The Bank of England will set Scotland's interest rates and control monetary policy, as it does now.

* The Bank of England will set the level of borrowing in Scotland, as it does now

* The Bank of England will set  Scotland's debt management, as it does now

* The rUK Government, as a consequence of the above, will have indirect control of Scotland's fiscal policy, as it does now.

Can you now tell this audience Mr Salmond, how, under these conditions of control of the Scottish economy, Scotland can possibly be independent, how you can fulfill the promises for change you have made, when your Scottish government will not control its own economy? How does that possibly mean independence?"
Not even the Nobel laureates would be able to answer that question and neither would Salmond.

pps
Today's Guardian has this to say