Scotland: ‘Pound is as much ours as it is yours’

[Blackleaf]

Quote: Originally Posted by Machjo

One thing I don't get. Seeing that sharing a common currency with benefit both sides, why would britain want to shoot itself in the foot here?
​

It's surprising how - despite the problems that the euro has wreaped across a continent - that some people still see a common currency shared between sovereign nations as a good thing.

The British were right to not adopt the euro. Why would they instead opt to have ANOTHER shared currency instead?

Can I take from that statement that you have now accepted that Scotland can use whatever currency they like?

Westminster cannot stop Scotland using the pound but it CAN prevent Scotland forming a currency union with the remains of the UK after Scottish independence. That would then leave Scotland having less control over financial policy than it does at present (and it may find it difficult getting stirling coins from the Bank of England).

As Mr Osborne, the Chancellor of the Exchequer, said: "At heart this banking union would involve putting UK taxpayers on the line for banks in a foreign country.

"It is very difficult to see how after a 'yes' vote, any UK politician could propose such an asymmetrical arrangement."

Mr Osborne also said that a new government in Edinburgh might be required to run its budget plans past the UK Government for approval as the price of keeping sterling. He asked: “Would a newly independent Scottish state be prepared to accept significant limits on its economic sovereignty, to submit its economic plans to Westminster before Holyrood?”

Scotland would be far better to rid itself from the UK.

The banking crisis - in which the big Scottish banks were only able to be bailed out thanks to Scotland being part of the UK - proved otherwise. Had Scotland been an independent nation when its big banks failed it would have made Iceland look like a picnic.

If things didn't work out, they could always become a province in Canada.

Or it could rejoin the UK (just as I think the Republic of Ireland will do one day in the not too distant future).

But all of the above is immaterial, because there's more chance of North Korea winning the 2014 World Cup than there is of the Scots voting for independence.

Here are the currency options that an independent Scotland would face. The UK can't prevent number 2 from happening, but it can prevent number 1:

Money, money, money: The currency debate

1) Join a ‘sterling zone’
The preferred option of the Scottish nationalists, but would require agreement from the rest of the UK (and that doesn't look likely). The Scottish economy is well integrated with the rest of the UK, so there could be mutual benefits – but also the curtailment of Scottish economic independence by Westminster as the quid pro quo. The Bank of England would be standing by as an emergency lender to Scottish banks and would require regulatory oversight.

2) Unilateral use of sterling
Scots carry on using the pound informally in the same way that some small South American nations use the US dollar. Would minimise initial disruption for Scottish businesses and residents, but would leave Scotland with no control over its interest rates, which could be very painful in a Scottish downturn.

3) Launch a new currency
Given the large share of Scottish GDP is linked to the North Sea oil industry, a standalone currency would probably be volatile, like a petro currency. Spikes in value would be very painful for Scottish manufacturers. Volatility could also disrupt trade links with the rest of the UK, the destination of a third of Scottish output. Scots would also have to change money every time they travelled to England, Wales or Northern Ireland.

4) Join the euro
Potential danger for Scotland in the single currency lies in the present difficulties of Ireland, Cyprus and Portugal: monetary policy is being set for the core countries, rather than those at the periphery. Those nations have also had to surrender some of their economic sovereignty to Brussels after budget deficits got out of control.

 

[Cannuck]

Can I take from that statement that you have now accepted that Scotland can use whatever currency they like?

Westminster cannot stop Scotland using the pound but it CAN prevent Scotland forming a currency union with the remains of the UK after Scottish independence.

That's what I've been saying. I'm not surprised it's taken you so long to come around

 

[Blackleaf]

Don't take Blackie too seriously on his knowledge of banking. After all, the UK was forced to recruit a Canadian expert to clean up their system as they just don't have the capacity to do it themselves

The Bank of Canada had an Englishman in charge between 1987 and 1994.

That's what I've been saying. I'm not surprised it's taken you so long to come around

But that's not want the Scots Nats want, is it? They want an independent Scotland to keep the pound and to have a currency union with the UK, but they can only do that with the UK's permission.

An independent Scotland can keep the pound all it likes, but if it keeps the pound and the UK doesn't want to enter a currency union with it then Scotland will still have London controlling Scottish interest rates (interest rates which will suit the UK, not Scotland, just as Germany controls, for example, Irish interest rates to suit Germany, not Ireland) and the Scots will have no say whatsoever in the running of their currency.

That's why the Scots Nats want a currency union with the UK in the unlikely event of Scottish independence, to have a bit more say in how their currency is run, but the UK is not going to allow it, due to the fact that that would cause British taxpayers to have to bail out the banks of a foreign nation - Scotland - should they fail again.

 

[Cannuck]

Very impressive goal post move.

 

[Machjo]

Blackleaf, you're confusing the principle of a shared currency with a specific currency. The euro was badly administered, and I'd immagine they've learnt their lesson since. To understand the benefit of the rpinciple of a common currency is a no-brainer. It cuts out the overhead cost of the middle man of the money broker that exists in all inter-denominational transactions.

 

[captain morgan]

The Bank of Canada had an Englishman in charge between 1987 and 1994.

Makes perfect sense, central bank policy was the sh*ts over that period. No surprise that an Englishman was at the helm

But back to the present; at least you can rest easy now that a Canadian is running your economy. Hell, maybe you can even manage to pull your economy out of the crapper now that you understand that important things like central bank policy be left to those that are expert in that area.

PS - Ask him nicely and maybe, just maybe, he will allocate a few dollars so that your navy is, well, not pretend anymore

 

[Machjo]

Actually, captain, the British Navy could kick Canada's *** any day. it's the country's finances I'm worried about.

Though granted Canada's aren't any better.

 

[captain morgan]

Who really cares Machjo.

One nuke over the fleet whilst in the Atlantic renders a navy pretty useless

 

[Machjo]

Who really cares Machjo.

One nuke over the fleet whilst in the Atlantic renders a navy pretty useless

True enough, and in that sense it's one big waste of money.

 

[Blackleaf]

You mean brinksmanship and belligerance isn't the best route? Are you suggesting that it would be to everyone's advantage if the UK and and independant Skotland could both benefit by maintainig friendly relations?

You don't say!

How would the UK benefit by allowing the Scots to have a currency union with the UK just so that English, Welsh and Northern Irish taxpayers can bail out Scottish banks the next time they fail?

The Scots Nats want independence - except in areas where they can still milk the English, Welsh and Northern Irish taxpayers.

The Scots won't get a currency union with the UK as it would be unpopular with British taxpayers, and there is nothing the Scottish nationalists, or anyone else, can do about it.

But back to the present; at least you can rest easy now that a Canadian is running your economy.

The Chancellor of the Exchequer is running the UK economy - a UK economy which is outperforming the Canadian economy and every other major Western economy.

Blackleaf, you're confusing the principle of a shared currency with a specific currency. The euro was badly administered, and I'd immagine they've learnt their lesson since. To understand the benefit of the rpinciple of a common currency is a no-brainer. It cuts out the overhead cost of the middle man of the money broker that exists in all inter-denominational transactions.

The Scots want to have a currency union with the UK just so that English, Welsh and Northern Irish taxpayers can bail out Scottish banks the next time they fail.

It's not going to happen. No British Government will allow it. If the Scots became an independent nation they should have to learn to stand on their own two feet without having the nation they decided to leave give them huge wads of cash when the going gets tough.

And the euro debacle has shown that a currency union, with a one-size-fits-all policy, does not work. Currency unions only work if member states cede ever increasing amounts of sovereignty - yet the Scots Nats want the opposite.

If the Scots entered a currency union with the UK they would continue to have their interest rates set by the Bank of England. This is fine for them as part of the UK, but it won't be as an independent nation. The Bank of England would set interest rates to benefit the UK, and they would rarely benefit Scotland. Just as many Eurozone countries have interest rates which don't suit them, because they are always set to suit Germany, interest rates in a currency union between Scotland and the UK would always benefit the UK and hardly ever Scotland. So that's one area where Scotland will be disadvantaged.

Basically the Scots Nats want a currency union with the UK to allow English, Welsh and Northern Irish taxpayers to bail out Scottish banks whenever they fail. They then eventually want to join the euro (which is not want most Scots want) to then allow the taxpayers of the Eurozone to bail out Scottish banks when they fail.

So the Scots Nats want independence but still want everyone else to give them huge wads of cash to help them out rather than standing on their own two feet.

And, as I've said, the UK would also be disadvantaged because English, Welsh and Northern Irish taxpayers would be asked to fork out money to bail out Scottish banks - which would then be foreign banks - whenever they failed.
*********************************************

Here's what people in England and Wales currently think about the prospect of Scottish independence and what the people of Scotland think about the prospect of Scottish independence.

Interestingly, 46% of Scots said they would be "dismayed" if they woke up tomorrow and Scotland had become an independent country, compared with just 34% of the English and Welsh. 46% of the English and Welsh said they "wouldn't mind", compared to just 17% of the Scots.

This ties in with polls conducted in the last few years showing that the English are more in favour of Scottish independence than the Scots are. I wonder why this should be the case. The Barnett Formula is my bet.

Murnaghan: State Of The Union Debate

 

[Machjo]

Blackleaf, your argument applies to within the UK itself. It would set interest rates that may be too low for one city and too high for another. They still benefti compared to a currency for every town. Same principle on the international stage.

Now as for sharing a common currency, no, total sovereignty would not be possible, but soem kind of moderate sovereignty could be. I totally agree that by sharing a common currency, they'd also have to agree on a common currency policy and all that go with it. But that could be agreed-on in principle.

 

[Blackleaf]

Blackleaf, your argument applies to within the UK itself. It would set interest rates that may be too low for one city and too high for another. They still benefti compared to a currency for every town. Same principle on the international stage.

Now as for sharing a common currency, no, total sovereignty would not be possible, but soem kind of moderate sovereignty could be. I totally agree that by sharing a common currency, they'd also have to agree on a common currency policy and all that go with it. But that could be agreed-on in principle.

You don't think there will be any problem with London setting Scottish interest rates should Scotland keep the pound? Just look at the euro disaster to see how this one-size-fits-all policy has been completely and utterly disastrous, with the ECB in Germany setting interest rates to suit Germany but which have been disastrous to countries like Ireland. The eurozone doesn't work and neither will a sterling zone. Thankfully, we don't have to worry about because a sterling zone because it's not going to happen. The British Government have already told the Scottish nationalists that.

**********************************

The British Cabinet is this morning meeting in Scotland for only the second time since Lloyd George was Prime Minister in 1921 as the British Government and the devolved Scottish Government are set to battle over North Sea oil, which is a key battleground in the independence referendum.

UK ministers are in the Aberdeen area, in the north east of Scotland, to set out plans for the future of the North Sea oil and gas industry.

Meanwhile, the devolved Scottish Cabinet of Alex Salmond's separatist SNP are also meeting to discuss the same issue just five miles or so away from where the British cabinet is meeting.

Ahead of the 18 September independence referendum, Scottish First Minister Alex Salmond said a "Yes" vote could secure a better future for the industry.

But UK Energy Secretary Ed Davey has rightly said that North Sea oil and gas resources were declining rapidly and needed a lot of support in the future.

The Westminster Government recently commissioned a study produced by Sir Ian Wood, who chaired the Wood Group from 1982 until 2012, which included calls for a new oil regulator to help maximise economic gains.

The first North Sea oil came ashore in June 1975 and production is thought to have peaked in 1999, with more than 40 billion barrels extracted so far. Since then revenues from North Sea oil have been declining - there was a large decline in 2013 alone - yet the Scottish nationalists believe they could make an independent Scotland wealthy from these oil proceeds.

Mr Davey told the BBC Sir Ian's review "does play into the independence debate".

"Scotland would be very reliant on oil and gas revenue and, with the oil price being so volatile, with decline in North Sea revenues, I think that would expose the finances, the public spending of Scotland very seriously," he said.

"What we are showing today in the Wood Review is that Westminster will manage the oil and gas reserves that the UK has in a far more effective way and that's great for Scotland."

Scottish independence: Cabinets to set out North Sea plans


24 February 2014
BBC News

The equivalent of more than 40 billion barrels of oil have already been produced from the UK continental shelf. The Scottish Nationalists believe an independent Scotland would grow wealthy from North Sea oil, but production is declining, with a 38% decline in the last three years alone

Ministers from both the UK and Scottish governments are in north-east Scotland to set out plans for the future of the North Sea oil and gas industry.

The cabinet meetings came as Westminster ministers said they would fast-track plans to get the most out of remaining UK offshore oil and gas.

The move followed Sir Ian Wood's review of the industry.

The Scottish government said the UK government should apologise for "squandering" North Sea riches.

Ahead of the 18 September independence referendum, Scottish First Minister Alex Salmond said a "Yes" vote could secure a better future for the industry.

But UK Energy Secretary Ed Davey said North Sea oil and gas resources were declining rapidly and needed a lot of support in the future.

The Westminster government-commissioned study produced by Sir Ian, who chaired the Wood Group from 1982 until 2012, included calls for a new regulator to help maximise economic gains.

The future of the North Sea oil and gas industry has been a major battleground in the campaign, ahead of the referendum.

The first North Sea oil came ashore in June 1975 and production is thought to have peaked in 1999, with more than 40 billion barrels extracted so far.

Although the oil and gas is now tougher to extract, the reserves are substantial - between 15 billion and 24 billion barrels of oil equivalent - meaning possibly another 30 to 40 years of production. And there could be new discoveries such as the fields west of Shetland.

But concerns over falling production led the UK government to ask Sir Ian to review the offshore industry.

The Scottish and UK cabinets are both meeting in the Aberdeen area, but not together

He said the UK government's Department of Energy and Climate Change (DECC) was "significantly underresourced and far too thinly spread" to effectively manage the increasingly complex business and operating environment.

Sir Ian said a 38% fall in production over the past three years had cost the Treasury £6bn in lost taxes and declining exploration threatened more missed opportunities.

It is claimed Sir Ian's recommendations could result in the equivalent of three to four billion more barrels of oil being recovered from the North Sea over the next 20 years, bringing in more than £200bn to the UK economy.

Mr Davey told the BBC Sir Ian's review "does play into the independence debate".

"Scotland would be very reliant on oil and gas revenue and, with the oil price being so volatile, with decline in North Sea revenues, I think that would expose the finances, the public spending of Scotland very seriously," he said.

"What we are showing today in the Wood Review is that Westminster will manage the oil and gas reserves that the UK has in a far more effective way and that's great for Scotland."

Mr Davey added: "Scotland has benefited from North Sea oil, let's be clear about this.

"It is the third booming region in the UK. After London and the South East, Scotland is doing incredibly well, as part of the UK."

Mr Salmond, who will hold a separate meeting of his cabinet in nearby Portlethen, welcomed the prospect of a new regulator for the oil industry, saying the Westminster government's record over the previous 40 years had been "abysmal".

At the same time, he rejected claims from Prime Minister David Cameron that the "broad shoulders" of UK could better support the North Sea oil and gas industry.

Mr Salmond said: "I think it's a nonsensical argument. Why? Because all we have to do here in Aberdeen is glance across the North Sea to Norway, and then we see a country, much smaller than Scotland, which is run by all accounts the most successful oil and gas industry in the world."

In a report in October 2013, the Scottish government's Fiscal Commission working group said there was "clear merit" in an independent Scotland setting up two oil funds - a short-term "stabilisation" fund to buffer the effects of volatility in the oil market, and a long-term savings fund to ensure future generations benefit from the wealth.

Earlier this month, Mr Salmond outlined plans to earmark about a tenth of oil and gas tax revenues - about £1bn a year - for an oil fund.

According to the first minister this could create a £30bn sovereign wealth pot over a generation.

The Scottish cabinet usually meets in Edinburgh, but regularly holds sessions in town and cities across Scotland, especially in the summer months.

Mr Cameron's predecessor as prime minister, Gordon Brown, held a meeting of the UK cabinet in Glasgow in 2009.

The UK cabinet had last met in Scotland in 1921 - when Winston Churchill was the Colonial Secretary and a Liberal MP for Dundee.

Meanwhile, Scottish Green MSP Patrick Harvie said that claims of the UK government to be the "greenest ever" and the Scottish administration's talk of "world-leading Scottish climate targets" would count for little in Aberdeen.

"Both the prime minister and the first minister are falling over each other to court the fossil fuel industry," he said.

"It's a pretty sickening sight."

Analysis

James Cook
Scotland Correspondent, BBC News

It's the clash of the cabinets in the battle over the black gold.

Well, almost.

There will be no face-to-face clash, with Prime Minister David Cameron continuing to refuse a debate with Scottish First Minister Alex Salmond.

Instead, separate governments will hold separate discussions about the future of the North Sea.

For 40 years, the industry has brought huge wealth to the UK, both in profits for the private sector and in taxes for public services.

But as the oil and gas become harder and more expensive to extract, the question is this: who is the best custodian of a fragmenting sector?

Sir Ian Wood, one of the industry's most respected figures, wants a new regulator, to ensure every last drop of oil is squeezed out in the most efficient and co-ordinated manner.

He thinks such a body could "facilitate, catalyse and remove barriers" in a "patchwork of interdependent oil and gas fields" operated by 300 different companies.

Production has been declining and estimates of remaining reserves vary but Sir Ian says there could be between 12 and 24 billion barrels left, worth between one and two trillion pounds.

Now two cabinets are competing to implement his recommendations.

David Cameron says the UK government is best placed to manage this volatile resource and to boost profits from the remaining oil and gas.

Alex Salmond insists Westminster has squandered the spoils for decades and only an independent Scotland would ensure a new bonanza.

The glory days of the North Sea may be behind us but there is still a battle for the treasure beneath the waves.


BBC News - Scottish independence: Cabinets to set out North Sea plans

 

[Blackleaf]

Edinburgh-based pensions and savings firm Standard Life is putting in place contingency plans to relocate funds, people and operations to England if Scottish people vote for independence.


Standard Life could quit Scotland

27 February 2014
BBC News


Article written by Robert Peston
Business editor

Edinburgh-based Standard Life is the first major business to warn it could leave Scotland if it votes for independence

Standard Life is putting in place contingency plans to relocate funds, people and operations to England if Scottish people vote for independence and what it regards as material uncertainties about money and regulation are not sorted to its satisfaction.

In its annual report, published on Thursday, the chairman of the Edinburgh-based pensions and savings firm, Gerry Grimstone, says Scotland has been a great base for the company but that, "if anything were to threaten this, we will take whatever action we consider necessary - including transferring parts of our operations from Scotland - in order to ensure continuity and to protect the interests of our stakeholders".

According to Standard Life's chief executive, David Nish, the company - which has had its headquarters in Scotland for 189 years - has "started work to establish additional registered companies to operate outside Scotland, into which we could transfer parts of our operations if necessary".

"This is a precautionary measure to ensure continuity of our businesses' competitive position and to protect the interests of our stakeholders."

Standard Life is the first significant Scottish business to warn that remaining in Scotland may be untenable in the event of a vote for independence.

Its intervention in the debate on Scotland's future is particularly significant because it is a symbolically important company in Scottish financial history and is regarded as a great success.

Standard Life is the UK's biggest provider of defined contribution pensions and self-invested pension plans, and has around £240bn of assets under management.

Mr Nish insisted Standard Life has "a long-standing policy of strict political neutrality and at no time will we advise people on how they should vote".

However, he said his strict duty was to assess the impact of independence on the group's four million UK customers, its 5,000 Scottish-based employees and its 1.5 million shareholders.

Mr Nish said this judgement could not be made in a definitive way at the moment because of uncertainties about the currency to be used by an independent Scotland, how interest rates would be set, how financial companies like Standard Life would be regulated, how savings and pensions would be taxed, and on what timetable Scotland could join the EU.

I am told by informed sources that unless a formal monetary, regulatory and currency union were agreed by an independent Scotland with the rest of the UK, which also included some kind of compact on taxes, Standard Life would feel obliged to move both funds and people to England.

The point is that 90% of all Standard Life's UK customers are outside Scotland, while their funds are held inside the country.

And if Scotland seceded without delegating regulation and monetary policy to London, the risks, costs and complexities of customers being in a separate country from their money would be too great - or so Standard Life believes.

"Customers' money and our capital would need to be near regulators responsible for those customers," said a source.

Chief executive David Nish said this was a precautionary measure

Standard Life also does not believe it could continue to recruit the best people to work in Edinburgh if they were uncertain about how much they would be taxed.

Monetary union

What brought this issue to a head for the company was the recent declaration by Chancellor George Osborne, Labour shadow chancellor Ed Balls and the Liberal Democrat Chief Secretary to the Treasury, Danny Alexander, that they would all oppose formal monetary union with Scotland.

I understand that Standard Life does not regard as satisfactory the apparent fallback position of Scottish First Minister Alex Salmond that Scotland would use the pound even without formal monetary union.

Although Standard Life's location is not vital to Scottish prosperity, the threat of tens of billions of pounds of funds and thousands of highly-skilled jobs flowing across the border are bound to have an electrifying impact on the independence battle.

I am reliably told that the emigration of Standard Life could extend to shifting the headquarters from Edinburgh to London.

"There is no stock exchange up here [in Scotland]," said a well-placed source, "and we are not sure we would wish to become a foreign registered company on the London Stock Exchange. So we might have to move."


http://www.bbc.co.uk/news/business-26362321

 

[Blackleaf]

This is a big blow for the Scottish independence campaign.

The Scots Nats must know their independence campaign is in trouble when a new poll shows that the Scots fear Scottish independence more than the English and Welsh do.

A majority - 52% - of Scots fear a weaker pound in the result of a Yes vote compared to just 32% in England and Wales.

47% of Scots also think that Scotland becoming independent will have a NEGATIVE effect on them personally, compared to just 29% who think it will have a positive effect.

Meanwhile, the poll shows that 57% of Scots plan to vote AGAINST independence in September's referendum, with just 32% planning to vote in favour. The gap between those Scots in favour of independence and those against it has widened slightly since September.

Scottish men are more in favour of independence than Scottish women, with 38% of men in favour of independence compared to 27% of women, yet the Scottish nationalists have admitted than winning support from women is a big challenge.

And poorer Scots are also much more in favour of independence than wealthier Scots.

So, as the polls say, the Scottish nationalists still have a big mountain to climb.

Scots fear independence more than the rest of the UK as Salmond tries to woo women who are shunning his Yes campaign


57% plan to vote no, 32% will vote yes, down 2 points since September
52% of Scots fear weaker pound on Yes vote, 32% in England and Wales
Independence would lead to spending cuts, say 49% per cent of Scots
Threat from George Osborne to block currency union heightens fears
Alex Salmond to use speech to accuse Tories of 'dive bombing' Scots
SNP admits winning support from women is its biggest challenge


By Matt Chorley, Mailonline Political Editor
4 March 2014
Daily Mail

People in Scotland are more worried about independence than the rest of the UK, a new poll reveals.

More than half of Scots plan to vote No in September’s referendum, with just a third ready to support going it alone.

But more Scots fear independence will weaken the pound, damage the economy and lead to spending cuts than voters in England and Wales. Half of Scots say a Yes vote would have a negative impact on them personally.

The new IpsosMori poll shows 57 per cent of people plan to vote No in the referendum, unchanged since September while support for the Yes campaign is down two points to 32 per cent

Men are much more likely to support independence than women, sparking warnings from the SNP that wooing the female vote is the biggest challenge ahead of September's referendum

Support for independence was highest among 25-34-year-olds (45 per cent) and lowest among the over-55s (28 per cent)

The survey also revealed stark differences in the views of voters depending on where they lived

First Minister Alex Salmond will use a major speech today to try to rescue his dream of independence.
He will claim Conservative Chancellor George Osborne made a ‘monumental error’ by ruling out allowing an independent Scotland to keep the pound.

However, polls show the co-ordinated warning from the Tories, Labour and Lib Dems in Westminster that a currency union would be blocked has not triggered the backlash in Scotland which Mr Salmond had hoped for.

A new IpsosMori poll shows 57 per cent of people plan to vote No in the referendum, unchanged since September. Only 32 per cent say they will vote Yes, down two points in five months.

Mark Diffley, director at Ipsos MORI Scotland said the ‘No’ campaign appears to retain a healthy lead.

‘The important recent debate over currency appears not to have shifted committed voters from their positions while undecided voters appear a little more inclined to vote ‘No’ as a result.

‘Having said that overall support for a ‘No’ vote has not changed since December. We are now into the final 200 days before the referendum takes place and both sides will be stepping up their efforts to win over those who yet to decide how they vote. Time will tell whether this has significant impact on public attitudes.’

Scots are far more fearful about the impact of independence on the pound

Independence would damage relations between Edinburgh at the rest of the UK

The UK's position on the world stage would be diminished if Scotland goes it alone

Almost half of Scots fear more spending cuts in Scotland in the event of a Yes vote, compared to a quarter of people in England and Wales who fear the impact on spending south of the border

Almost half of Scots think independence will have a negative affect on them personally

More than half of voters across the UK fear independence will have a negative impact on the Scottish economy

Scottish First Minister Alex Salmond will use a speech tonight to claim Conservative Chancellor George Osborne made a ‘monumental error’ by ruling out allowing an independent Scotland to keep the pound

Additional polling reveals the growing anxieties among Scots about the impact of independence on their lives.

More than half – 52 per cent – of people in Scotland fear a yes vote would weaken the pound, compared to only 32 per of people in England and Wales, the Guardian reported.

On spending, 49 per cent of Scots fear independence would trigger cuts in Scotland, while only 24 per cent in England and Wales predict more austerity south of the border.

Almost two thirds of Scots (63 per cent) fear that independence would lead to a worsening relationship between Edinburgh and the rest of the UK. Only 50 per cent of voters in England and Wales feel the same.

Mr Salmond will use his speech today to accuse Mr Osborne's of ‘dive bombing’ Scotland with threats over the currency and the economy.

In a lecture hosted by the New Statesman in London tonight he is expected to say: ‘In the last three weeks people in Scotland have seen an array of approaches from the UK Government - what they apparently call their Dambusters strategy. We were love-bombed from a distance by David Cameron, then dive-bombed at close range by George Osborne.

‘I believe George Osborne's speech on sterling three weeks ago, his sermon on the pound, will come to be seen as a monumental error.

‘It encapsulates the diktats from on high which are not the strength of the Westminster elite, but rather their fundamental weakness.

‘In contrast, we will seek to engage with the people of England on the case for progressive reform.’




Read more: Scots fear independence more than rest of the UK | Mail Online
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[Tecumsehsbones]

Scots fear independence more than the rest of the UK as Salmond tries to woo women who are shunning his Yes campaign

"Hey, lassie, how'dye like a wee peek under me kilt? Ye can handle me claymore."

 

[Blackleaf]

With a credible claim to be the oldest living currency in the world, the pound has accompanied Britons through much of their march through history. But is Scotland soon to end its use of the unit?

A short history of the pound

By Ed Lowther
Political reporter,
BBC News
14 February 2014

Continental roots

Despite its full-throated associations with Britishness, the pound traces its origins back to continental Europe.

Its name derives from the Latin word Libra for weight or balance, via the construction Libra Pondo, meaning a pound weight. While the word Libra has long since been discarded, it makes its presence felt in both the £ symbol, an ornate L, and the abbreviation for the unit of mass, lb.

The crossover with mass was not coincidental: its value originally equated to the price of a pound of silver.

In an echo of the ancient Roman system of libra, solidus and denarius, a pound was, until 1971, divided into 20 shillings (s) and 240 silver pennies (d) with 12 pennies to a shilling.

An equivalent system of one livre to 20 sous and 240 deniers had already been adopted in the Frankish kingdom under Charlemagne.

Evolution of specie

Anglo-Saxon King Offa (ruler of the Kingdom of Mercia) is credited with introducing the system of money to central and southern England in the latter half of the 8th Century, overseeing the minting of the earliest English silver pennies - emblazoned with his name (above).

In practice they varied considerably in weight and 240 of them seldom added up to a pound.

There were at that time no larger denomination coins - pounds and shillings were merely useful units of account.

The first pound coin did not appear until 1489, under Henry VII. It was called a sovereign. The shilling was first minted in 1504.

Banknotes began to circulate in England soon after the establishment of the Bank of England in 1694. They were initially hand-written.

Gold coins emerged in 1560, and by 1672 some were made of copper.

The pound bestrode its complex system of shillings and pence until decimalisation - 100 pence to a pound - in 1971 (the shilling was withdrawn from circulation on 1st January 1991).

One thousand years of inflation

One pound could buy you 15 head of cattle in the year 980 during the reign of King Aethelraed the Unready, according to David Sinclair's The Pound: A Biography.

But from the 15th Century to the year 2000, Sinclair estimated that its purchasing power had fallen four-hundred-fold.

In 1999, the House of Commons library concluded that between 1750 and 1998, prices had risen by about 118 times.

"Thus one (decimal) penny in 1750 would have had greater purchasing power than a pound in 1998," it noted, stressing that such an exercise could only be "very approximate".

The best part of this inflation had taken place after 1945.

Debasement

There were stringent efforts to maintain the quality of coinage.

Prof Nicholas Mayhew, who specialises in the history of sterling, reports that Henry I castrated currency officials whose output was found wanting. According to Sinclair, half the moneyers in England were mutilated as punishment for producing sub-standard or counterfeit coins in 1124.

Use of the word "sterling" did not arise until after the Norman Conquest, and it originally referred to pennies not pounds, but its origins are mysterious, deriving perhaps from esterlin, a Norman word for little star, or lesterling, an Arab word for money.

Henry II improved the quality of coins and in 1282, under Edward I, testing the purity of coinage was formalised in the "Trial of the Pyx", an annual courtroom-esque ceremony which continues to this day.

The coins' silver content had been reduced to 92.5% to improve durability. This level of purity became known as sterling silver.

But with a keen eye on the Royal Mint's bottom line Henry VIII (above) drastically reduced the silver content of coins minted in his reign in what became known as the Great Debasement.

It was left to Elizabeth I in 1560 to restore the value of the coinage, which would remain relatively stable into the 19th Century.

For centuries, coins in circulation endured the indignity of having their edges clipped off by penny pinchers harvesting the value of the precious metal before passing on the rump coin for its original value.

In 1660s, minting of coins started to become mechanised, and design features like edge lettering were introduced to help eradicate coin-clipping.

Harsh penalties were still imposed on those found guilty of counterfeiting: one William Chaloner was sentenced to death after being brought to justice by the then Master of the Mint, Sir Isaac Newton (above).

There have since been numerous grand attempts to manage the value of sterling, including the Gold Standard, the Bretton Woods system and the European Exchange Rate Mechanism - but prevailing western economic orthodoxy now favours floating exchange rates, and the value of the pound is largely determined by supply and demand.

The pound has also survived as an independent currency when most of the rest of Europe adopted a single currency, the euro, something that at one stage in the early 21st Century seemed the likely fate of sterling too.

Scotland's uncertainty

An alternative currency, the Scots pound, continued until the 1707 Act of Union created a currency union based on a pound's value south of the border.

The Bank of Scotland had been created in 1695, a year after the Bank of England, and survives today as part of HBOS, a subsidiary of Lloyds Banking Group, with headquarters in Edinburgh (above).

It retains the right to print its own banknotes, but these have been equivalent in value to their southern counterparts since unification.

A Scottish £10 note

Now, the SNP is keen to assure voters that the country's 300-year-old adoption of a 1,200-year-old currency would not end if they vote in favour of independence in the forthcoming referendum.

The British political establishment has joined forces to warn that it most certainly would - but First Minister Alex Salmond insists that Scots "know that the pound is as much theirs as it is George Osborne's".

Scottish voters will decide in September whether to test Mr Salmond's confidence in the independence referendum.


BBC News - A short history of the pound

 

[Blackleaf]

How Scotland Joined Great Britain - YouTube

 

[Spade]

I understand that when Scotland secedes. the Royal Family will move to Holyroodhouse in Edinburgh, and England will have to scour France for royal replacements.

 

[Blackleaf]

I understand that when Scotland secedes. the Royal Family will move to Holyroodhouse in Edinburgh, and England will have to scour France for royal replacements.

You think you understand, but you don't. You get most of your "facts" from weird dreams you had the night before.

 

[Spade]

You mean France will not accommodate the royal quest?

You need a humour transplant.