A Hard Pounding

Apologies to regular readers for the thinness of posts since the New Year. In part, after three years of steadily posting twice or more a week, it was to recharge the batteries in the pen/keyboard/quill. But equally, there was a seasonal outbreak of both good will—in the shape of positive noises from unionists—and glad tidings—in the shape of polls creeping upward for independence after months of rolling along with little change—so the outrage factor that normally drives new blogs was weakened.

For example, I was encouraged by a different poll last weekend (done by YouGov for Oxford University’s Migration Observatory) that demonstrated Scots culture did not mirror English, despite the much we have in common. Scots were shown to have a much more (if not totally) enlightened view on immigration, which pretty much settled a Twitter debate in which I was involved with Hugo Rifkind and others who feel strongly that Britain is culturally homogenous and therefore indivisible.

Positives had been coming from all the right people and merged into an outbreak of reasonableness after endless collective furrowing of brows that has been dubbed “Project Fear”. Alistair Darling himself, the chair of the No campaign, said that a sterling area between an independent Scotland and the rest of the UK was ‘desirable’ and ‘logical’. In an emotional personal plea during his “Sermon from Olympus”, David Cameron launched a charm offensive aimed at the large Scots diaspora in England to phone up their friends and relatives back home and persuade them not to go.

Those who should know were maintaining an even-handed approach on the tricky subject of sharing the pound, with Mark Carney making a major speech on which he stayed pretty much on the ‘mebbies aye; mebbies naw‘ fence and his predecessor Mervyn King saying: “(The Scots) problem is what the Treasury say now and what they say the day after a Yes vote in the referendum are two entirely different things”.

Clearly some bigwig in the Metropolitan Mafia decided all this was dangerous talk. Now the ‘Big Three’ UK parties are set to deliver a warning to the voters of Scotland that they will not be able to keep the pound if they opt for independence. Chancellor George Osborne is expected to rule out an independent Scotland joining a formal currency union with the UK when he publishes the latest Treasury analysis of the issue in Edinburgh.

It is expected to be followed by statements from shadow chancellor Ed Balls for Labour and Treasury Chief Secretary Danny Alexander for the Liberal Democrats, all making clear that their parties also would not allow Scots to retain the pound. Compared to the earlier sweetness and light, this is clearly a serious mood swing and—to those grateful for the quite affable tone the debate had achieved—rather throws us back into the debate’s dark ages.

While no-one should be expected to hold back in making the case for/against independence as they see it, consider the damage that in ill-tempered debate will have, irrespective of the outcome. Much of the unionist case rests on how much we have in common—from history through culture to interests. Sensible independistas all agree; but then make the case that the relationship would get even better without the ex cathedra arrogance of Westminster we still have to thole as part of the UK.

And here’s the rub: it’s the UK’s pound. The United Kingdom started in 1603 between equals under a common monarch. It was reinforced in 1707 with a grubby little Act that merged not just the parliaments but the finance system and, most relevant to our discussion, the currency. It became the British pound and, though de jure its name stayed unchanged as the Bank of England, de facto this became the British Central Bank, shared between the two, just as Westminster replaced the English parliament.

It is our pound as much as theirs.

If they want to play hardball, that is unfortunate—not just for the unnecessary ill-will it will cause among friends but also because the once great British state will wind up as a much-reduced English state with egg all over its face. Because without Scotland, the 1707 Treaty must be annulled and then there will BE no United Kingdom to be the remainder of. We are not talking about a sliver detaching from the main: this is a partnership and if it ends, it splits down the middle.

Now nobody is arguing it’s a 50-50 deal. The Scots are reasonable; they acknowledge that we now constitute roughly 8.6% of the population (back in the day it was much bigger) and are entitled, on balance, to that proportion of assets. We also acknowledge a responsibility for the fiscal mess Westminster helped get us all into and (so far) accept shouldering our proportion of the £1.5tn-and-growing debt as reasonable. And, if Yes win in September negotiations of the details of this will be long and intense—the billions in government property in London is little use to Scots except for an embassy; the presence of nuclear weapons at Faslane will be a bargaining chip; how the BBC, Network Rail, Met Office, DVLA, etc, etc function must be agreed.

But for the Metropoliticos to pick a fight on currency seems daft. Not only is it not theirs to withhold but the planet is strewn with examples of countries using other countries’ currencies with few problems (and indeed some advantages). The $US is the best example:

  • legal tender in Panama, Ecuador, El Salvador, East Timor
  • in common use in Zimbabwe, Peru, Uruguay, Cambodia, Afghanistan, Canada, Mexico
  • local currency in Bahamas, Bermuda, Barbados, Belize, Lebanon, Hong Kong, Macau all pegged to $US and so fluctuate with it on the currency markets

That’s a population bigger than Britain using someone else’s currency, NONE of whom have a currency agreement with the USA to do so. The US economy is a huge enough economic flywheel in itself for these others to have no appreciable effect on currency value. So, simply using the pound with no agreement is clearly an option, if less desirable.

And it is less desirable for two reasons. One is the fear that UK parties appear to have that the Euro sends a hard lesson about currency union. That may be but the huge difference is that the heart of the Euro economy—Germany—is swamped in size by the rest of the Eurozone, where as England would be 90% of any Sterling zone and, therefore, much more in charge.

The second is basic economics: Scotland is an oil economy; without it, England will see a fall in the value of sterling and, since imports massively outweigh exports there (not so much the case in Scotland) this could even lead to inflation, higher interest as BofE controls kick in and mortgages going to hell in a handcart.

And that’s not even considering what if Scotland gets equally stroppy with England and, for example, wants its nukes out of the Clyde within a year. Are the UK parties sure this is a road towards unhelpful belligerence they want to go down? Because, in international circles stuffy, stuck-up, anti-EU, UKIP-voting England has an image problem against which a high-profile, plucky, friendly, tartan-and-whisky exporting Scotland is golden.

Is it in England’s interest, Messrs Cameron, Darling, Carmichael et al, for you to pick a fight with us at all?

About davidsberry

Local ex-councillor, tour guide and database designer. Keen on wildlife, history, boats and music. Retired in 2017.
This entry was posted in Commerce, Politics and tagged . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s