Alex Salmond says if currency union is refused, Scotland is exempt from any debt

Whoever he is, he didn't say what you claimed.

It'll be fine

 

The currency union would be materialised if Scotland actually gains independence and it's practically impossible for Scotland to create its own currency and set up a central bank. Westminster rejected the option to get in the way of the Yes campaign that has been gaining momentum and an independent Scotland would not ruin the UK economy as long as the Bank of England controls monetary polices of both England and Scotland and freedom of movement is ensured between the two countries.


BBC Radio 4 Today ‏@BBCr4today 19m
“There will be a common-sense agreement on a common currency” Alex Salmond tells #r4today #indyref

 

Westminster rejected a currency union, because it's a bad idea.

 

Not at all, but because it might scare the Scots into voting no. England stands to lose a great deal if there is no currency union in the event of a yes win.

 

Unbiased source please.

 

I strongly doubt that Salmond will want freedom of movement between England and Scotland. Anyway, this joke is funny:

[video=youtube;bB6ExYpJ49A]https://www.youtube.com/watch?v=bB6ExYpJ49A[/video]
​

 

You only hear what you like but of course you are entitled to your opinion. But anyway, there's no need for him to back up my claim since I know I'm right. You just asked for a link. When large amounts of oil change their home currency (an entire country, which is larger than rich Denmark, Netherlands) the old currency is gonna suffer. And where do you add the fact that a refusal to form a currency union, as this thread says, will give Salmond grounds to find excuses to distance himself from any responsibilities regarding debt. You won't be able to force him to pay any, if he doesn't want to.

 

I asked for a source on which you based your claims, but you don't have one.

You've made it all up

 

True but the rUK stands to lose a great deal if there was a currency union in the event of a yes win too and no government is going to simply give away independent control of its national currency to a foreign country (even without considering the political suicide that would be south of the border).

The most likely least worse option would be some kind of compromise - a currency union lite - but that wouldn't give the independent Scottish government all the economic freedom the yes campaigners desire or that it would need to establish a truly independent nation. There would likely be a long process of change, conditional on the wider economic conditions, towards a separate currency as the only viable long term option for an Independent Scotland (if only as a step to the Euro). That could be a long and difficult road though.

 

It's not just England, but Wales and Northern Ireland, too that have ruled out a currency union.. Things will be worse for a while for the rUK, but not as bad as they would be with a currency union.

 

What exactly do you think it would lose? There is no need for us to have the same rates of taxes as we have discussed already. Indeed Redwood was saying yesterday that England may bring out different tax rates to a scotland which stayed in the Union.

Instead rUK by having a currency union will save billions of pounds on taxes on business with us as well as allowing those in the North of England much more options to engage in business with us.

 

A formal currency union would require agreement from both parties on limitations to fiscal and economic policy (borrowing, interest rates, trade, regulations etc.). There would obvious be some flexibility within that but nether government would have the freedom of a truly independent nation (as the UK currently has and has pushed hard against the EU to retain). Exactly what those limitations would be isn't clear and would need to be negotiated but regardless of the outcome, it would inevitably tie the hands of both governments to some extent, especially in extreme situations as has been seen with the Euro and isn't out of the question given the disruption to Sterling breaking up the UK could cause in and of itself.

To and Independent Scotland that could still be seen (or sold to voters) as a step in the right direction, a move towards true Independence but to the rUK it could only ever be a step backwards. It's a massive sticking point with no obvious solution. As I said, if it happens, some kind of compromise will be established but I don't expect it to be good for anyone.

I fail to see where the savings are compared to where we are now as a single nation or even compared to Independence with sterilisation (though that would bring a whole set of different problems anyway).

 

It means agreeing fiscal views and financial cooperation. It means the Bank of England staying as lender of last resort and it, not rUK or Scotland would be responsible for monetary policy including interest rates.


It therefore does not involve any of the shenanigans you speak of. It is argued it limits Scottish Independence as she cannot make her own decisions on this but in reality the decision is that this is the best way for us to initially to go. In the future it will be up to the Scottish people and her Government to decide if this is the best way to continue or to go another way.

I am taking it here you are possibly referring to my stating that all refusal of currency union would result in, would be taxes of all goods exported to Scotland, rUK's second largest market.

If Scotland goes for Independence without a currency union then rUK will need to pay taxes on all it's exports to Scotland putting a massive financial burden on all rUK exporters to Scotland. This would have a particular hard effect on the North of England. In addition the North of England have been considering ways in which they can take advantage of an Independent Scotland to revive it's economy. Again taxes everywhere would make that much harder for them.

As Nicola Sturgeon has said the only reason Westminster would refuse a currency union would be if it wanted to cut off it's nose to spite it's face.

 

Agreeing fiscal views and cooperation was basically what I said and that would restrict both nations' operational independence, which is the issue.

The Bank of England currently applies monetary policy as guided by the UK government (a situation a future UK government could choose to change of course). How that would change in the event of an Independent Scotland and how much an Independent Scottish government would influence that policy remains entirely unclear.

I agree it's the best way for Scotland to go. The problem is that it's not the best way for the rUK to go. That's why there would be a compromise and that would not necessarily suit Scotland, certainly not to the extent that has been sold to voters.

Are you suggesting that as some automatic consequence or another threat like the refusal to pay for any share of the debt? I don't see how the question of currency union would directly impact any taxation regime implemented between Scotland and rUK (in either direction). I've not see that brought up at all to be honest and I don't see how it would do anything but hurt both sides. Free trade is probably one of the less difficult elements of this to resolve.

The only reason Scotland would refuse compromise on that question would be the same. Compromise is what would happen in the event of a yes vote. It's the only thing that could happen.

 

It will be done by the Bank of England. It is generally accepted that this will cause Scotland some limitations but that clearly is at the current moment acceptable. Like I said it is the BoE, who are already doing this for rUK. Scotland will follow what it does for rUK.

Well given that the current Scottish Government accepts that it will need to follow it's decisions I think we can take it that it is prepared to take it's decisions. Was it not Gordon Brown who gave the BoE freedom in making it's decisions.

Yes it is. It is in the interests of both parties as I have shown and you have not shown any reason why this is not so.

No need for a compromise. There is no viable argument against a currency Union except that it puts limitations on an Independent Scotland. She is prepared to accept these because at the moment that is the best way for her to go - end of problem. There is, in reality nothing to compromise about. Now you may think that is not true because you believe that your MP's are honest but the truth is they are just playing a political spin. Why make it so strong? Well they did not think there would be more that 30% at most saying Yes and they believed that saying this would stop some of even that. Did not work.

The threat of not paying the debt is an adequate response to the threat of not agreeing to a currency Union. The Bank of England was I think set up by a Scot. It should in any case be called the bank of the UK.

My mistake though it is not taxes, it is transaction costs.I take it you are again not aware that rUK will suffer from 500 million pounds a year in them if it does not have a currency union due to Scotland being the second largest market for rUK. It is not about any threat. It is the result of not having a currency union. Scotland would suffer in the same way.

As I have said before it is transaction costs not taxes. If you were watching BBC 6'oclock news you will have heard them mentioned. Scotland will suffer from them too. One of the main reasons Scotland wants a Currency Union is to save us both from these costs.

The only reason Scotland would refuse to compromise is because there is nothing to compromise about and nobody has ever suggested compromise. Like I have said it is politics not truth that Westminster spins. Third term describes the situation in post 102 http://www.politicalforum.com/showthread.php?t=373701&page=11&p=1064279241#post1064279241

 

The Bank of England have ruled it out because its incompatible with sovereignty.

I might be the best way for Scotland to go, in which case you shoud vote "no". It's definitely not the best way for rUK to go.

Using that argument, rUK should join the euro or the dollar.

 

The BoE doesn't work in a vacuum though. It decides policy but guided by the longer term aims of the (UK) government, primarily regarding an inflation target. The issue is that the two separate governments wouldn't necessarily have the same aims and targets. How could the bank serve two masters?

Are you being wilfully stubborn? It would also put limitations on the rUK!

Scotland might accept those limitations because it would be seen as an improvement (though I'm not convinced it's compatible with the current full independence rhetoric). For the UK government, it would be a significant penalty that they could not accept on economic or political grounds (and yes, the flawed flat refusal of the concept is a factor in that).

Honestly if there wasn't the politics involved, it would be less difficult to square the circle but sadly it very much exists.

That'd be with Scotland using a currency other than the pound. Sterlingisation or the middle ground compromise would also remove that issue too. There is zero prospect of Scotland using any other currency short term so it's really a non-issue.

As I think we've agreed, politics is the issue here. Independents say there must be a currency union, Unionists say there can't be a currency union. Everything changes after the vote though. Someone would have to compromise and it isn't realistic that would only be one side or the other.

 

Well due to the fact you have started being rude, this is the last post I will make on this at the moment. I will just say that meeting with the BoE once a year or so an rUK government with 91.5% of the voice and you suggest they are going to have to bend for the other 8.5%. You're arrogant comments above conceal ridiculous notions.

I will also say a lot of people in Scotland prefer us starting with our own currency which would in the long term be best for Scotland.

As far as the financial consequences of not having an agreement they are strong.

(Financial Times Archive)

https://archive.today/BG4E8#selection-1935.0-1941.65

 

A great result last night.

I still think, though, that Westminster should cut Scotland's take of the Barnett Formula and give some of that money instead to the poorer English regions and to Wales.