Thursday, 13 February 2014

Sterling Zone - Part 57

One pound (British coin)
(Photo credit: Wikipedia)
Groundhog day may well have been a couple of weeks ago, but every day in the run up to the Independence referendum resembles the day before…  or maybe last Tuesday.

The last couple of days has resembled the days after Mark Carney’s speech, when both sides went through their arguments about I-Scotland adopting the English Pound.  Since Gideon Osborne’s speech, ruling out r-UK from setting up a “Sterling zone” with an Independent Scotland though, leaked out via Nick Watt in the Guardian there is fresh ferocity.

Pro union supporters have been trumping Osborne’s intervention, alongside pledges from Ed Balls and Danny Alexander as torpedoing the Salmond plan for an Independent Scotland.  Pro Independence supporters have been bitterly complaining about the bully boy tactics of Westminster in refusing to let an Independent Scotland (which we have a share in) use Sterling.  Sturgeon’s appearance on BBC Scotland’s GMS was akin to a spoiled brat whinging about the big boy that took his ball away.

There is two points to be made about this intervention though.  Firstly, we will find out if the SNP truly put some thought behind the plan of adopting the English Pound.  Now that there is little (if any) likelihood of I-Scotland using the English Pound as part of a Sterling zone, I wonder if the SNP have looked at all of the available options.  Judging by Sturgeon’s reaction on GMS yesterday morning, probably not.

As I’ve pointed out, I’m not particularly sold on adopting the English Pound.  Entering into a currency union would entail giving up sovereignty and also some of those economic leavers that Swinney and the other members of the Scottish government talk about.  It’s pretty similar to the arguments against the UK entering the Euro, so it is quite strange to see members of “Scottish” Labour who presumably (because we have never heard a peep of dissent from the official line) were pro UK entry to the Euro but are now against the creation of a Sterling zone.

The second point is that pro-Independence supporters should now disabuse themselves of any notion that in the event of a yes vote, the separation negotiations will be all tea and cakes.  To paraphrase my local MP, Divorce will be an expensive business & that Westminster will do everything in their power to hinder an Independent Scotland.  This probably means that Salmond’s stated Independence Day of 24 March 2016 may be put back if everything is to be done and dusted by that point.

We can expect r-UK to try and put the spanner into Scotland’s attempts to join the EU, we can expect painful negotiations about the division of the national debt and also the division of assets.  This of course is something that I did bring up in March 2012.

A lot of the coverage has said this is a turning point.  In reality, it will be nothing of the sort.  Westminster will assert that they will not take part in a currency union, while the Yes campaigners will continue to say that we can and will, without really understanding that this option is not the best option or will fly anyway.  At this rate, it’ll be another couple of weeks until Sterling zone comes up again.
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1 comment:

Anonymous said...

It's not the "English" pound they'll be "adopting".

It's the pound sterling and it belongs to both nations. So really it's a case of status quo there until such times as the people of Scotland vote otherwise.

The pound sterling is not the exclusive property of England. The bank of England is also an English bank in name only, it is also part owned by Scotland, Wales, and N.Ireland.