The ‘probe’ into the Scottish Government’s spending on the constitutional issue has to be one of the more ominous moves in the British state’s continuing offensive against Scotland’s democracy. And, yet again, I’m obliged to note that the move was entirely foreseeable but seems to have caught the Scottish Government unprepared. Although it must also be said that there is probably not much they can do about it now. The time for pre-emptive action is past. The Union gives the British state almost unlimited power to do as it will with Scotland. And what the British state wants is for Scotland to be a compliant, subservient, subordinate adjunct to England-as-Britain.
The British state holds the purse-strings. It therefore has Scotland in a stranglehold. When the uppity Jocks grow restive, as we have of late, Britannia need only tighten her grip in order to remind us of our place in what even they have ceased to pretend is a ‘partnership of equals’. Having this power, it was only to be expected that they would use it. Expected, that is, by everybody but Scotland’s woefully out-of-touch political class. Once again, our politicians will object, protest and condemn while actually doing nothing other than telling us the only solution is to vote for them. If it is to be expected that the British state will use its overwhelming power to strangle us into submission, it is equally to be expected that the Scottish political parties will see this as an electioneering opportunity. They will have no incentive to try and pre-empt or counter the British state’s attacks because those attacks are potential vote-winners.
This strangulation is one half of a two-pronged strategy. On the one hand, the British state starves the Scottish Government of funds while also imposing strict constraints on how the funds can be used. This adversely impacts delivery of services with the Scottish Government taking the blame. Simultaneously, the British put on a show of lavishing Scotland with funds for highly-visible and generally popular projects so as to make it appear that Scotland is reliant on and receiving the largesse of England-as-Britain.
It’s all a con-trick, of course. We are being manipulated with our own money. Every penny spent in Scotland by the British state is money it has extracted from Scotland in the same way imperialist states have always appropriated the resources of annexed territories. And every penny spent in Scotland by the British state represents but a fraction of what has been extracted. Our nation is being simultaneously bled dry and starved of its lifeblood. The British ruling elite is a parasite that will kill its host if not prevented from doing so. And our government is doing nothing to prevent it.
Sadly, Scotland has never lacked those treacherous souls who slavishly pander to power in the hope of favour. If ever there was a creature more typical of this loathsome breed than the endlessly odious Baron Foulkes of Cumnock, then I have had the good fortune never to encounter it. Foulkes visibly drools at the prospect of inflicting some harm on what he claims as his country when expedience dictates. He is unabashedly proud to be able to claim to have originated the idea of a high-level ‘probe’ into Scottish Government spending on the constitutional issue. A probe which surely nobody believes is about ensuring tax-payers get value for money. It is entirely about putting the screws on the SNP Scottish Government regardless of what harm this inflicts on Scotland’s people. Were I prone to such nonsense, I would pray that I might die before encountering anything more repellent than the obsequious perfidiousness of Foulkes and his ghastly ilk.
By rights, it should be the people of Scotland demanding such an investigation since it’s our money and given that we are getting no discernible benefit from however much it is that is supposedly being spent furthering Scotland’s cause. It is we who should be demanding to know where the money is going, apart from the lavish salaries awarded to the likes of Jamie Hepburn, Minister for Independence. How the fuck can there be a Minister for something we don’t have? Hepburn might as well have been given the title of Minister for Time Travel. A Minister for Constitutional Reform might have been more to the point. Especially if that Minister was actually fulfilling their remit.
It is, by any recognised definition of democracy, perfectly right and proper that the government elected by the people of Scotland should be devoting the revenues raised in Scotland to implementation of the pledges and policies on which it was elected. In democratic terms, it is unthinkable that the government elected by the people of Scotland should be subject to interference from a foreign government when it seeks to do what it was elected to do. This remains the case even if the Scottish Government is making a pish-poor job of doing what it was elected to do. It is not the place of some external power to intervene. The right and responsibility to intervene when the Scottish Government is not performing as required rests entirely with the sovereign people of Scotland. Even if the Foulkes-inspired ‘probe’ was well-intentioned (if you can even imagine such a thing), it would be entirely inappropriate and completely unacceptable.
Nonetheless, if the past is any guide, we can expect that the SNP Scottish Government will find a way to accept this latest affront to democracy and insult to Scotland. It’s what they do. They defer to the imposed authority of the British state in contempt of the sovereignty of the Scottish people. And they get away with it time after time. Because we, the people, allow it. We let them get away with it. We shame our nation by allowing a cringing compliance that amounts to complicity in the dismantling of Scotland’s democracy and eradication of our national identity. It is our shame as much as it is the disgrace of these politicians.
That burden of shame increases as we continue to permit this cowardly lassitude on the part of those we appoint to defend Scotland’s interests in the face of a British Nationalist threat now openly flaunted by the British political elite and its lackeys in Scotland. That shame can only be lifted from our shoulders if we act with the kind of bold assertiveness that our political leaders so evidently lack. The Stirling Directive is one way of doing so. It is, in my far from humble estimation, the best way we have so far been offered to reboot Scotland’s cause.
Peter A Bell 
I’m not sure why Akismet has started flagging this. Are you selling drugs or guns through your site?
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“We are being manipulated with our own money.”
That sums up the situation rather neatly. And as you point out it is merely a fraction of our own money, made to look like it’s a lot but coming from our Southern benefactor.
Meanwhile the Scottish Government are cowering behind the sofa rather than standing up for the country. We have both a Cabinet Secretary for the Constitution (Angus Robertson) and a Minister for Independence (Jamie Hepburn) … why?
Th sooner the Stirling Directive is delivered to the Scottish Government the better.
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Fuck me! I’d forgotten Angus Robertson was the CabSec for the Constitution. I think I can be forgiven for that since he’s done sweet sod all about the constitutional issue since bagging himself that wee earner.
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The English Btitz may yet make a mistake. Imagine if the decreed that the SG mitigation of the bedroom tax was a Mis spend? If they stymied that it could spark a wave of dissent. My own view is it was a strategic error to fund the mitigation….because if applied the blame could be seen as an English Tory attack. There are not enough social housed to exchange for smaller houses…it would have caused huge upheaval and anger. But no one even thinks of it now because of mitigation.
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There’s hardly been a day in the past nine years when the British state hasn’t done or threatened something that we were told was going to “spark a wave of dissent”. We’ve yet to see a ripple.
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Technically it is not our taxes that are returned to us, for a currency issuer, taxes fund nothing at a national level. Westminster as the U.K. currency issuer, issues new currency to Scotland. The problem is in using taxes raised in Scotland as a notional guide on how much we should receive in the block grant. They don’t need to base the amount on this, the U.K. is a currency issuer and could instead decide to invest in Scotland and pay according to need and aspirations for our economy. That they won’t ever do this is why we need independence and our own currency so that we can manage our own economy based on our own decisions. Hell, they don’t even do this for the regions of England outside the SE of England.
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Can I come and watch as you explain this on the doorsteps?
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I agree this is the lie that folk have been fed for the last 45 years of Thatcherism/neoliberalism. I’m sure you are familiar with other causes that contain information not immediately accessible to the general public. Are you going to give up on the claim of right? I didn’t think so.
I wouldn’t bother but this knowledge changes everything about what we thought possible about government finances. That is going to be damned handy going into an era of intense climate changes measures. It also blows out of the water many of the economic concerns about independence. I’m not going to continue to lie to the Scottish people that government finances are the same as household finances. Frankly most folk don’t need to know the details, they just need the folk leading to get a bit of it and endorse it, the rest would follow.
This understanding of how our monetary system actually works post gold standard is becoming more mainstream every day. I’m doing my bit to reach critical mass Peter.
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I totally agree with you about the need for people to be better informed. But “taxpayers’ money” has become a figure of speech. It’s shorthand for the system as you describe. It may be misleading. But I’m not sure it is the thing standing in the way of people becoming better informed. I reckon the culprit there is the people themselves. Learning is effortful. Watching ‘reality T’ isn’t.
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The problem with “tax payers money” is it fixes in folks heads that there is a finite pot for spending which is dependent on their taxes. The household finances scenario. Spending and taxation are not even directly connected. Unless we move away from that we are limited in what we can tell people we can do with independence and our own currency.
Of course if we don’t have our own currency, taxes absolutely do pay for spending and is a finite pot.
Can you see this information is worth fighting for?
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I am in total agreement with you on the need to impart this information. It’s just not my ‘job’ at the moment. I have to focus on promoting the Stirling Directive. One of the problems that has beset the independence movement is the inexorable effort to drag debate away from the constitution and into the realm of economics or the environment or whatever. You cannot effectively campaign for everything at once. So, I go for the ‘meta-thing’. The thing that overarches all else – the constitution.
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No, I totally get that but we need to be working all of the angles and have them converge on a general understanding and confident footing and hopefully policy platform to offer the Scottish people. There is no point in pretending that the economic issues are not massive, particularly to the undecided and they need some help to be persuaded. Everyone has their own field to impart and ultimately they should be complementary. Why they are not is the mystery. Why can’t the independence movement get it together? Don’t answer, I know why.
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The case for independence is entirely democratic everything else is about how much of a success we can make of it and that matters to most people.
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The ‘term taxpayers money’ is only hurled oot when Westminster has taken the decision not to fund anything which would be a PUBLIC GOOD, particularly here in Scotland.
There is apparently, NO ‘finite pot’ of ‘taxpayers money’ when it comes to sending military infrastructure support into the Ukraine while some go starving and homeless in this great country of ours, Scotland.
The population are no aw daft but for far too many as Peter describes it, ‘learning is effortful’ and that suits the politicians fine that wid tell us there is ‘a finite pot’ an’ wid hiv us believe it!
In this situation it is imperative that the Stirling Directive be endorsed by all elements within the Independence movement in order that it is brought to bear on those SNP MSP’s at Holyrood who are determined jist tae blame the Tories.
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I don’t disagree with anything you say here. I would though point out the imperative that voters understand the different currency positions of not having our own currency (finite pot) and own currency No technical finite pot. These represent very different prospects for an iScotland and the latter more quickly moves us away from the distortion of the Scottish economy and dependency on the rUK economy that continued use of Sterling would mean.
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I frequently do attempt to explain this whenever the “how do you pay for it?” Is asked. I preface my answer by asking if they “really want to know” or are they “just wanting to waste my time”. The one sentence takeaway is “Government spending is not funded by your taxes.” Followed by “the Government destroys the money it takes in taxes; it doesn’t spend it on anything”. That usually sparks a debate. I use the analogy of the blood system to explain the circulation of money in the economy. I don’t go into all the speculative uses of money, bonds, shares, and so on. Just the simplest basics.
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On the doorsteps I have tried various ways to simplify the concepts. People are mostly already familiar with the expression “Gov finances are not the same as household finances” which leaves the door open to explain what that means. It’s a war of attrition and gradually the ideas are percolating through to the mainstream. Obviously we are fighting a wall of vested interests trying to keep people from making demands of their states. It highlight how the privatisers have been making use of the state capacity for decades which could have been used for the majority benefit.
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When asked how we will pay for “it”, I simply respond by saying we’ll pay for it in much the same way as we do now. Which is true.
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It depends which “we” you are talking about. If it’s Westminster then yes we will pay for it the same way as any currency issuer. If it’s the SG you are talking about then absolutely no. The SG’s finances operate like a large Local Authority entirely dependent on what the currency issuer (Westminster) supplies. Unlike an LA, raising taxes doesn’t provide more money as the block grant is cut by almost the equivalent amount to reflect this. The SG as you know operates a fixed budget with limited and ring fenced borrowing just like a LA.
Seriously the currency issue is massive to what Scotland can then do given our resources profile. This should be the biggest selling point to the undecided there is but the SG doesn’t understand the difference between a currency user and a currency issuer and is determined to keep repeating household finances concepts at every juncture.
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I thought we were discussing the situation post-independence. In which case, we will have our own currency. It cannot be otherwise. Even the arguments for a ‘leisurely’ transition sound like wild recklessness now. I used to be one of those who put those arguments. Largely on the basis that the rUK government was unlikely to do anything seriously detrimental to Scotland’s economy when the repercussions would hit the rUK just as badly. I took the view that an independent currency would only become essential when the two economies diverged beyond a certain point. And we’d know well in advance when we were approaching that point.
Boris and The Brexiteers destroyed the first argument in the most emphatic manner, while Kwarteng/Truss demonstrated that the drop off the precipice could happen overnight and totally without warning. So, I’m now with the ‘first day’ team. Not that I discuss currency very often. My focus is the constitutional issue – which supersedes all others. As I am wont to say, you can’t answer a constitutional question with a calculator.
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If the answer to your constitutional question involves the agreement and support of sovereign Scots them it absolutely involves the capabilities of Scotland as a currency issuer. To say “calculator” plays into household finances thinking.
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I think it will be hard to give people a crash course in the basics of economics on the doorstep. After all, economics is still not part of the basic school curriculum so that severely limits the chances of conveying the intricacies of fiscal and monetary policy to people without their eyes simply glazing over.
A lot of folk use the “but how are we going to afford it?” defence because they have already made up their mind and are emotionally committed to being British but just don’t wish to admit that they are a little bit ashamed of being considered “Scottish”. For these people no argument based on economics or anything else for that matter will make any difference.
For those people who are genuine in asking the question they just need reassurance. Micro states like Lichtenstein, Luxembourg, San Marino and Andorra manage comfortably and they have no natural resources to speak of as to countries similar in size to Scotland such as Ireland and Denmark.
So why wouldn’t Scotland, given we have all these natural resources of oil, gas, wind, tidal, wave, water and whisky that the aforementioned states don’t have? Our currency would be in demand as other states and private investors from overseas would wish to invest in our sound and solid economy.
Re-frame and reassure.
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Its not necessary for folk to understand economics. It just takes the leadership of the independence movement to understand the basics, tell everyone what we are doing and have plausible answers when quizzed by the unionist media and the undecided.
There are layers to the currency issue. One involves convincing our own side that it’s essential to have our own currency not just independence in name. Then convincing the undecided that the economic case is sound with our own currency. I am not so confident in the No own currency scenario which would result in austerity particularly if approached in the way the SNP is suggesting so far.
The period of using Sterling is the one of greatest risk when we have no LOLR and no ability to enact QE in a crisis and borrowing at whatever interest rates the BoE sets. Not to mention we will have to prioritise our resources for export to earn Sterling to pay back foreign currency debt. This means these resources are no available for building our country and we can get into a cycle of importing everything and having little domestic supply which is a vulnerable state and a weak negotiation stance.
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Of course we’d have our own currency. No Independence is possible without it. (Neither is EU membership, the SNP’s continuity policy).
The SNP leadership’s grasp on economics are worse than illiterate, they are incontinent.
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My personal preference is to have parallel currencies to start with, much as we have at the moment where Sterling is our “foreign currency”, and Scottish notes backed one by one by Sterling notes in the form of giants and titans, at the Bank of England, as our “local currency”, to a total of around £4 billion last time I looked.
Independence then would be much the same except that the giants and jumbos would come home to the Central Bank of Scotland as our initital foreign reserves, if the 3 merchant banks agreed so as to keep their notes and hence advertising which was part of the original purpose. To start with our own currency would be pegged 1 to 1 just as it is now.
So locally in Scotland we’d use our own notes, but same as now, go south into England we’d beg our bank for “English” banknotes to save the hassle in shops down there. That would also be our foreign currency in other countries. Banks here would have to accomodate, but could take a bit of time. We could have dual currency accounts or “foreign” currency accounts here same as I used to do with euros and dollars.
Meanwhile the CBS increases and varies its foreign reserves to £15 billion at 2014 prices (maybe £20 billion now). Including depending on the negotiated settlement 1/12th of the BOE foreign reserves currently £144 billion, which gives an extra £12 billion for the CBS. And bit by bit wages become paid in our own currency, same as bills, and use of Streling as a foreign currencfy decreases as our own currency gains confidence internationally. Debt may or may not immediately be denominated in our own currency, the sooner the better.
As the SCP becomes universally accepted of course, other central banks buy it and our own CBS gains foreign currency reserves until there’s so much it doesn’t know what to do with it same as happened to Denmark.
Not explained well, I did better btl on the national in times of yore. Been out the day to the shops and cream crackered.
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At first we will use Sterling unofficially over the transition period before Independence Day 2-3 years. During this time we will set up, or finish setting up depending if when we start, the central bank, regs, banking institutions, get notes and coins manufactured etc. the ideal plan is to introduce the new currency a few weeks after Independence Day. The new S£ will be swapped 1:1 for Sterling. The Sterling then becomes the reserves of the central bank. Out of £200 of Sterling available to convert, once Sterling debts are settled we should accrue around £50 bn which can then be denominated into other currencies as our FX reserves. Sterling will run alongside the S£ for some time as converting to the new currency is optional. There will be a peg to Sterling in the first few months to allow mortgages and savings to be exchanged to the new currency. This peg will then be stepped down until the currency is floating. As soon as taxes begin to be demanded in the new S£ then it will become inconvenient not to change to the new currency.
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You can’t say what “we will” do. Nobody can. I marvel at how people can remain oblivious to the contradiction when in one breath they say they want independence so the people of Scotland can decide, and in the next they stipulate what that decision must be. This is why discussion of post-independence policy matters is totally irrelevant to the constitutional issue. And one of the principal reasons we didn’t get across the line in 2014. Policy is for elections. The largest part of the Yes movement has been led by the nose into fighting the independence campaign on myriad fronts as if it was an election campaign. Meanwhile, the only front that actually matters – the constitution – lies neglected.
Debating post-independence policy within the independence campaign only adds to the appearance of uncertaintly. Which is precisely what the Unionists want. The term ‘Project Fear’ was always a misnomer. It was ‘Project Doubt’. Engendering fear and sustaining it over a long campaign is as close to impossible as makes no difference. And it was unnecessary. All the anti-independence propaganda had to do was create doubt. Hence the constant flood of questions and the incessant claims that those questions remained unanswered. In attempting to answer the questions, the Yes side conceded that the questions were valid. By providing a dozen or more different answers, the confusion/doubt was amplified. Continuing the arguments about policy within the Yes campaign, meant the doubt and confusion was continually being renewed. The No side only had to plant the seed. The Yes side did all the work.
And so it remains. The fact that the polls remain at the place they were when the 2014 campaign ended is easily explained by the fact that the campaign itself remains stubbornly fixed at that point. No lessons have been learned. There has been no rethinking of strategy or tactics. No reimagining. No reframing. Scotland’s cause is on a treadmill and we are told the only way to get off is to run faster. The ‘debate’ about currency – to take one example – is exactly the same now as it was ten years ago. This too is easily explained. It’s a purely academic debate. Academic debates are effectively infinite, because they never come up against reality. They don’t require a conclusion because either they’re not required to find a solution or there is no solution they can find because no solution that they conceive can possibly be applied to a real-life situation. They can’t say what will be the solution because the very point of the constitutional campaign is to radically alter the way such decisions are arrived at.
There is only one sensible way to respond to the “currency question” or any of the slew kof other questions contrived solely for the purpose of generating and perpetuating doubt. Are you confident that Scotland is at least as capable of managing its affairs as any other nation?
Ending the Union is about rectifying an ancient and continuing injustice. That is the argument for independence. The Union is wrong. Independence is right. Independence is right not because it implies this or that policy, but because it means the decisions about policy will be made in Scotland. That is all.
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I say this because this is the plan the SNP membership voted for.
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But you can’t say that this is the plan that will be implemented after independence. The SNP doesn’t get to decide that. Nobody gets to decide that on behalf of the people who, with independence restored, will have reclaimed their rightful status as the ultimate political authority.
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Absolutely and although the members were convinced, the leadership appears still to have no clue.
constitutional change is the what. Currency sovereignty plus democracy is the how independence is achieved.
Currency allows the enactment of independence. You don’t have it, you have independence in name only that’s not good enough for anyone. Somebody has to do the heavy lifting on the plans for every detailed policy position, the best plan for currency has been developed and, bonus, it’s been used to good effect elsewhere in the world. The hardest part is getting folk to understand this isn’t a nice to have if they want true independence and if they want to free themselves from poor choices which result in state capture almost as if they never left the UK.
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I don’t agree with a lot of what you have written here but that fine, right? The problem with currency, much like the Stirling Directive, is that folk don’t know what they don’t know. I dont agree that the currency debate hasn’t moved on because in 2014 we didn’t have the credible currency plan we have today. Peter, the “constitutional question” might be all that concerns you but it’s a bit presumptuous to assume this is all that concerns everyone. I don’t understand your attitude actually as it’s perfectly possible to progress on many fronts all at the same time. Maybe you haven’t quite got the significance of currency but why are you so averse to being ready for all of the options on Independence day? It really isn’t rocket science but the realities are not necessarily available for the ordinary person to grasp. You can ask folk what they want but how do they assess what’s best without a great deal of debate on the matter? You act as if it’s an entirely neutral decision – it isn’t. The consequences of one path over another will reverberate for decades and decades after independence. What’s wrong with preparation and persuasion? You ought to be seeing parallels with what you are trying to achieve but somehow you aren’t. Any movement has to have a vision which inspires people to achieve its aims, currency lies absolutely at the centre of the scope and scale of this vision. Without popular support, you are not going to achieve your constitutional aims. Popular support relies on vision and policy. The two sides need each other.
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How’s the SNP doing on building popular support with the Wishartian ‘gentle persuasion’ strategy? What the evidence says is that they’ve done appallingly badly. Which prompts a growing number of us to reflect upon whether Wishart, Sturgeon et all maybe got it totally wrong.
You seem to misunderstand my “attitude”. I have no objection to you chatting with other currency obsessives and making all manner of ‘plans’. Just as I have absolutely no objection ever to people spit-balling ideas on any matter of public policy. That’s how policy reform begins. What I object to is the pretence that this is part of the constitutional debate. An essential part, if some are to be believed. It isn’t. If it was and if you and all the other people who prioritise their own field of expertise or personal hobby horse were peddling your wares effectively, we would surely have seen some evidence of this effectiveness by now. We have waited almost a decade for that evidence, amid constant assurances that the fight was being won, but still there is nothing to show for all those years of ‘gentle persuasion’ and flogging one dead policy horse or another.
Here is the reality. you can talk about currency and the economy and any other area of policy until every possible combination of words on the subject has been uttered, it won’t make the slightest difference. Because the only people listening are the other occupants of whatever policy bubble we’re talking about. The public switched off a long time ago.
So, by all means continue trying to educate the public on how the economy actually works. You won’t succeed. Not because people in general are incapable of understanding, but because they’re just not interested. You have failed to capture their attention. You’ve been jumping up and down in front of them waving SNP ‘papers’ and Business for Scotland leaflets for a decade. You’ve still not got their attention. If you ever had their attention, you’ve lost it.
Meanwhile, the core constitutional issue gets lost in the fog of policy debates and competing ‘visions’ of post-independence Scotland. Endless chatter about being independent and no plan or proposal for becoming independent. My “attitude” is that you can have your fog. Just don’t allow it to obscure the thing we are actually meant to be striving for. If everybody would just stop campaigning for their party or agenda and focus on the fight to restore Scotland’s independence, we might see some progress. Goodness knows, we haven’t seen any of that in a very long time.
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You may not know I am a serious critic of the SNP. I completely agree with pursuing the constitutional issue. I am trying to get you to understand that it’s dangerous to pursue it without protecting ourselves with currency sovereignty. It is not a distraction, it’s is the nuts and bolts of independence. Are you just going to walk off into the sunset once we are technically independent? I’m preparing for that eventuality.
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The term “currency sovereignty” makes no sense. The people of Scotland are sovereign. There are no exceptions to this sovereignty. Therefore, specifying fiscal policy as being encompassed but the sovereignty of the people is redundant.
What you seem to be saying is that you don’t trust the people of Scotland to choose what you consider the best currency option. The reason I don’t obsess about such things is that I am fully confident that Scotland can manage its fiscal policy at least as well as any other nation.
As to being prepared, it’s not clear how that would work. Because the future governments of independent Scotland cannot be bound by choices made now. Those future governments will have all the powers generally associated with independent nations and will therefore be able to take whatever course is deemed prudent at any given moment. It’s kinda what governments do.
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It makes perfect sense when you understand there are different levels of currency sovereignty. Using someone else’s currency is not currency sovereignty, pegging to someone else’s currency is not currency sovereignty. Having few resources to increase the productive capacity of the economy restricts the capacity of state spending. Only our own unpegged currency is full currency sovereignty. Scotland has the resources to increase productive capacity to meet the demand more public spending will generate.
Maybe I am not being clear about being prepared. It takes around 4 years to set up a currency. That’s a long time to be beholden to Westminster with no safety nets add 2-3 years for the transition period if you don’t start after a vote either. To be prepared is the only situation that does not tie the hands of the post Indy Gov. If they chose to introduce our own currency at the end of the transition period they could not as the previous SG did not start the process to do so. The new Gov could decide to delay our own currency but they could make the decision at any point to introduce it, but only if we prepare.
It is entirely probable that we would have a mad panic to introduce our own currency once reality hit, that’s not optimal when we could plan up front. We can’t do too much before a vote other than plan and prepare legislation necessary to legitimise the currency but all of this takes time. We could take 18 months off the preparation time if we started now which leaves the remaining 2.5 years to be completed in the transition period before Independence Day.
Given that most people haven’t any idea how states fund themselves and how the differing currency positions affect how this is done and the capacity of the state to spend, I do not trust the Scottish people to be any more informed than anyone else on this topic without serious debate and so far there has been none that is that relevant. The sad thing is that the SNP does not understand the issue of currency. Every time one of them speaks it is using the tired old Thatcherite household analogies which are just plain wrong, they haven’t the faintest idea of the capacities of a sovereign currency issuer and they will hamstring Scotland’s progress because of it. Neither does Slab or the Tories so if any of them got in after independence we would get the same neoliberal thinking which would result in extreme austerity.
We would almost be more independent now if we had currency sovereignty and no formal constitutional independence than we would if we had constitutional independence and no currency sovereignty.
The currency question is by no means understood or settled and most folk don’t understand its significance to being independent and the challenges of building a nation. If this penny doesn’t drop it’s going to be far more painful than it needs to be.
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You are talking about a half done job. I feel you are not seeing where the locus of independence sits in reality. We are all free to be poor and enslaved but would we choose that if we knew what we were doing?
The best we can do with the SNP is persuade them to prepare for all currency options to be available for the new Indy gov to decide upon otherwise their hands are tied or it extends the period of risk and lack of ability to shape and build our nation
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What makes you think folk are more interested in the constitutional question than they are about feeding their children? We are all in our bubbles, that’s the point and there is no need for it. We need a unifying force which brings it all together. The SNP has failed dismally to provide this. You won’t get far with the constitutional question if folk have no idea what it might mean to them or feel confident that we thrive. You can be an constitutional purist if you like but that’s thin gruel to most folk.
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There actually is no full independence without fiscal and monetary independence, the two are entwined as a practical reality.
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I quite agree.
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This is the nub of it-
“… the British state will use its overwhelming power to strangle us into submission, ……. the Scottish political parties will see this as an electioneering opportunity….. no incentive ……British state’s attacks……. are potential vote-winners.”
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It’s not as if the proud brit party’s in our parliament haven’t been trailing this line of attack for at least a couple of yrs. Forewarned is supposed be forearmed and unless they,the SG, have a secret ace card up their sleeves I’m not sure they are going to be able to stop it. The proud brit/English in Westminster have nothing to lose since polling clearly, and has for sometime, shown that nigh on half the electorate in Scotland will vote to end the union without any kind of plan, worries about pensions, currency or anything else.
Party politics and rivalries always get in the way of coherent and united responses and this particular example of westminsters malice towards the Scots will not prove to be the exception.
Enter Stage right Salvo and liberation, thankfully now no longer party affiliated, which to me a least demonstrates a level of smart strategic thinking, which is unlikely to be mirrored by any of the independence party’s. I live in hope of being proved wrong.
For what it’s worth I think the Stirling Directive should be presented to the Scottish Parliament, not the SG, making all MSP’s accountable, and both the SNP and Greens ( actual sitting independence MSP’s) ‘invited’ to support and endorse the Directives content and the initiative going forward.
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The Stirling Directive is an instruction to take action that only the Scottish Government can take. It would be quite pointless delivering it to the Scottish Parliament, which would have to way to follow the instruction.
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If it’s an instruction to the SG, should it not also be an instruction to the Scottish Parliament. Which should be the more powerful, the parliament or the administration?
Great choice of picture, how apt a depiction.
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Why give an instruction to anyone other than the person able to carry it out?
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Because it then becomes an instruction to all MSP’s, including the unionists. The liblabtory MSP’s are loyal to westminster, they need to be reminded in no uncertain terms, and the Stiring Directive lays that out in absolute terms, that as elected members there loyalty is demand and commanded by the people of Scotland.
A fact that may cause concern and consternation to those who oppose us once we have an ECHR ruling.
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But “all MSPs” don’t have the authority to carry out the instruction. Why would you give a recipe to the diners in a restaurant when the chef is the only one who can actually make the dish?
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Sorry to butt in. The People of Scotland elect 129 MSPs who form the Parliament. But it’s the parliament not the people who choose the government. Currently it’s a coalition of SNP and Greens who have a majority.
But the Greens could decide they don’t like that any more and the government even without an election could be Greens, and the Unionist parties in coalition to be the government.
But even then the Government can be overruled by the parliament if there’s enough “rebels”. In theory at least, it’s the parliament has the power given to it by the People of Scotland, not the government.
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So, explain how the parliament alone does as stipulated in the instruction. Explain the process.
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“So, explain how the parliament alone does as stipulated in the instruction. ”
It doesn’t. From the parliament website, basically as per my posting:
“Voters elect MSPs who will represent their views and make decisions that affect their lives. Anyone eligible to vote can do so.
…
After an election … Then, they appoint the Presiding Officer and Deputy Presiding Officers. Next, they elect one member to be First Minister – usually the leader of the biggest party in the Parliament. The First Minister then selects ministers for the Scottish Government.”
https://www.parliament.scot/msps/about-msps/what-happens-at-election-time
But from the Stirling Directive:
“The Scottish Government has been repeatedly elected by the People of Scotland …”
But it hasn’t, it’s the MSPs were elected, they elect the First Minister, and he or she appoints the (Ministers of the) Government. So that needs a little rewording to be constitutionally accurate.
If your onwards step is ECHR or ICJ it’s better to get this right. The Stirling Directive then goes on to say:
“We the People now expect and direct the Scottish Government, and all our representatives …”
That’s great, “all our representatives”, but it’s possibly better to include the word “elected”. And perhaps also to include “(Scottish) Parliament”.
I have no idea how interested the ECHR and the ICJ are in technicalities. But they could send it back for a proper “writ” from the people of Scotland. And in the words of the scotcourts as a possible guidance:
“Once service has been carried out, the principal summary application, along with proof of service, must be returned to the court prior to any hearing set out in the warrant to cite.“.
Seems to me your “writ” should be served on the Government, the Parliament AND all individual MSPs. And record the whole thing. Then make sure you hand a written copy to an authorised person. And get as many names of witnesses present as possible.
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Mmm, it might be an idea to plan to individually serve the “writ” (Stirling Directive) on every single MSP, perhaps in a constituency surgery or at a campaign or meeting. Brief a wee paper reporter 🙂
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This is why the Yes movement is fucked. As soon as something is proposed that everybody could get behind, there are always those who want to turn it into something else and who destroy it in the process. I despair.
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It’s not a criticism, they’re – valid – comments about improvement. As one of the committee of 11, it’s entirely up to you whether you accept the suggestion – or not.
If the Yes movement is indeed fucked, it’s because people are too sensitive about others having different opinions, and having the effrontery to utter them.
Anyway, I shall desist.
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I apologise for not responding earlier, we had a power cut in my bit of Ayr which kinda screwed my day. It’s not often that yesindyref2 and I agree totally on any subject, though broadly on the same page I would add what I think is perhaps an important point worth considering.
The Directive correctly identifies our current parliament a creature of the union, limited in its reach by westminster statute and unless the people of Scotland through the Directive make clear that it’s constitutional limitations are unlawful, as per the Claim of Right and the Treaty of Union, any attempt by the SG to introduce legislation regards a plebiscite Election or Referendum will be stopped dead in its tracts by the Presiding Officer. So Parliament telt, then the ECHR, then back to Parliament, the SG becomes almost irrelevant.
I’m am sorry if I have offended you over this matter, I meant no disrespect nor in anyway am I attempting to undermine or belittle the massive efforts made by you and others to get Scotland out of this union.
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As far as the currency debate itself is concerned, the 2013 FCWG (Fiscal Commission Working Group) findings on currency, and the scot gov’s response form a backdrop of actually insufficient information, and perhaps the mistake of deciding on something which is NOT in your power to decide – something which requires agreement from another party, in this case, the rUK Government after Independence. No harm in having it as an option to be discussed, but NOT as the one way forward.
Click to access 00419554.pdf
(can’t actually find the FCWG “Currency Choices for an Independent Scotland”)
Anyways, don’t bother about the rest of that pdf, a good table is provided right at the end which I seem to remember prints off on one page A4 landscape OK. I had a copy, cough, on my desk for a few years. Annex A.
Oh yeah, it doesn’t discuss sterlingisation (informal currency union) enough, not does it discuss the “limited role for a central bank”. Actually Panama has dollarisation, had no LOLR, but has / had the 6th highest rated banks in the industrial world. I’m also AGAINST LOLR except in very limited liquidity terms, as it encourages stupidity, whereas not having one encourages fiscal prudence amongst banks – hence panama. LOLR is like an unlimited overdraft on demand not agreement.
Personally I think set up a central bank regardless of choice – the Eurozone is a formal currency union, but member countries still also have a central bank. That was also a mistake (with hindsight) during Indy Ref 1 – not keeping options open.
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“Currency sovereignty” is a great term by the way; it’s like monetary sovereignty by use of a sovereign currency. It’s why I like the idea of starting from Day 1 of Indy with parallel currency – own currency + sterlingisation = growth + stability. The best of both worlds, as BT would have said! Own currency then advancing in almost a leisurely fashion, with steady growth. Hopefully the STUC would also approve – in 2014 they accepted the currency union idea, but only for a short time before our own currency.
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And yeah, Scotland can handle having multiple currencies if we want.
We invented banking and modern economics. Why so feart now?
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Panama is mostly a cash economy not to be compared with Scotland or most modern economies. From what you have raised as relevant issues it feels like there is a planet’s worth of information to cover. This is not the best platform for that kind of discussion. Suffice to say I don’t agree with your assessment. Everyone has pet theories but a good starting place is getting to grips with how our monetary system actually works rather than the neoliberal overlay which has justified economic policies for the last 45 years.
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Panama of course, apart from being roughly Darien of old, was mentioned by the Adam Smith Institute back in 2014:
https://www.adamsmith.org/research/quids-in
“The ‘dollarized’ economies of Latin America – Panama, Ecuador and El Salvador – provide strong modern-day evidence that banking systems do better without central lenders of last resort.”
Panama do get an “Investment grade” credit rating, but almost certainly not as good as Scotland would get, which would be comparable to New Zealand at AA+ or thereabouts, maybe a grade or so less to start with. As you know, credit ratings are sadly quite the important thing, not just for banks but for the businesses operating in that economy.
As for “neo-liberal”, I like MMT (Modern Monetary Theory) but unfortunately we do live in a largely neo-liberal world and can’t ignore that unless we want to live and trade in splendid isolation.
“our monetary system actually works” in whatever way we decide as an Independent Country, but one that co-exists with 195 others.
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Credit ratings are not that important if you are only issuing bonds in your own currency to sell to your own citizens. It’s only a big deal when you want to borrow a foreign currency on the international market.
As long as we are not sterlingised credit ratings aren’t that important. With no debt Scotland would start with a good rating.
The fact is that we would only need to “borrow” in S£ so international investors don’t have any of those initially until the CB has spent them into existence so they can’t lend them to us. So it’s really the domestic market we are talking about.
People in Scotland will be selling their Sterling UK gilts and replacing them with S£ gilts to avoid exchange rate risk. Regardless of what rating we have there won’t be any issue selling bonds.
No the monetary system doesn’t work how we want it to work. It works how it works and we use the various levers to produce outcomes. We need to understand how it works to know how to tune the economy. This isn’t a matter of opinion but empiracally evidenced fact. How it works can be used to produce outcomes across the political spectrum by choosing a different combination of levers.
Neoliberal thinking is based on flawed lab grown economic theory with little to no bearing on real life economies which just happen to justify ideological policy, the data does not support these models. So you are advocating continuing to lie to our people for what reason exactly – because they know how household finances work? Not relevant to how Gov finances work. Why would we do that?
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Companies need or want foreign institutional investments, and the first thing international investors look at is the country’s sovereign credit rating. In general terms a company can NOT have a higher credit rating than the country it operates in. Companies also issue bonds.
“With no debt” an assertion without foundation in fact as it hasn’t happened yet – read this: “Vienna Convention on Succession of States in respect of State Property, Debts and Archives”
Click to access 3_3_1983.pdf
“When the successor State is a newly independent State, no State debt of the predecessor State shall pass to the newly independent State, unless an agreement between them provides otherwise in view of the link between the State debt of the predecessor State connected with its activity in the territory to which the succession of States relates and the property, rights and interests which pass to the newly independent State.”
Being a “newly independent State” , however is just one of the basically three ways Scotland will become independent, and Scotland WILL be expected to at least try to negotiate our way out with the rUK or whatever it wants to call itself, before telling the rUK what to do with itself. Also as in:
“When part or parts of the territory of a State separate from that State and form a State, and unless the predecessor State and the successor State otherwise agree, the State debt of the predecessor State shall pass to the successor State in an equitable proportion, taking into account, in particular, the property, rights and interests which pass to the successor State in relation to that State deb.”
At this stage we just don’t know which way it will work. And breaking “International Law” as our first act wouldn’t be a great way to start. That Convention isn’t totally signed or ratified, but it is generally accepted.
“So you are advocating continuing to lie to our people for what reason exactly – because they know how household finances work?”
Jings, I bet you wish you could edit that gratuitous and false insult out of existence, and “Thatcher” later on? She hasn’t been PM since 1992 – 31 years ago, before most of our population were even able to vote. The median age in Scotland is 42 or 43, not 49 for a GE, or 47 for an HE.
Anyways, you have your opinions, I have mine, and I daresay the remaining 5.4 million have theirs. As indeed we are all entitled to.
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When you consider what the national debt is, it is not true debt but a statistic. It doesn’t require anyone to earn the currency to pay it back, it’s issued by the state and returns to the state. The numbers in the ND and the debt to GDP ratio is also irrelevant in and of itself, it’s simply a record or a tally if you will. It represents the sum total of our savings, investments and the money supply resulting from previous years of deficit spending. Ultimately all of this currency will return to the currency issuer as taxes when it will be deleted. Interest is paid in exactly the same way as the original currency was created by issuing the currency and represents no burden to anyone? The U.K. deficit and therefore the national debt arose because of decisions made at Westminster not Holyrood. Holyrood has limited borrowing capacity and it is real borrowing which requires to be paid back by earning the currency to do so.
Westminster has no intention of repaying the national savings except on bond maturity. The currency used to buy bonds sits in interest bearing savings accounts and is neither used nor needed for spending, why would it be? Bond issuance is a state tool like interest rates and deficit spending, it’s not strictly necessary but it performs useful functions such as setting overnight banking interest rates, removing competition for resources and providing guaranteed savings that back our private pensions etc.
Westminster has been clear it will be the successor state which means they will take on the debts, liabilities, assets and international representation at the UN, NATO etc. there is no way they will give up those seats at the table just to stick it to Scotland. There is also a recommendation that Scotland takes on the former UK state Scottish pension liability or accepts a lump sum (or for them to desist on talk of repaying the ND) and walking away from joint assets outside Scotland. With our own currency we can more readily make those decisions.
The way the National debt is talked about is as if we all went out for dinner and Scotland is leaving without paying a share of the bill. This is nonsense and this is why folk need to understand how the monetary system works so they don’t come out with this household finches thinking. Scotland’s resources have more than contributed to Westminster for some time now despite them being in our territory. Even if we did agree to pay a contribution, it wouldn’t be that significant in the greater scheme of things and we could insist on paying it in S£ (We would need our own currency for that). Westminster could then use it to buy our exports – they’re gonna need them. The fewer things we need Westminster to negotiate on the better so it will be to our advantage to put ourselves in a position to walk away on certain issues.
Arguments about the national debt are mostly specious.
I’m not sure if you remember what Thatcher said? “The state has no money of its own other than what we pay in taxes” 100% the opposite of the truth. This is the basis of neoliberal models that have prevailed since Thatcher and Reagan. This understanding still remains with most of the public, politicians and the media encapsulated in household finances, balanced budget talking points. To continue along this vein is to flat out lie to people, I regret nothing.
I don’t know if you have had the opportunity to read this analysis, I would recommend it?
https://www.ucl.ac.uk/bartlett/public-purpose/publications/2022/may/self-financing-state-institutional-analysis
Of course everyone has their own opinion but has everyone accessed the facts? The above analysis is inexorably logical and the data support this assessment.
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Another great resource for loads of things is trading economics, in this case:
https://tradingeconomics.com/country-list/rating
It’s also good for up to date foreign reserves.
Peter’s absolutely right though. NOTHING has been decided about what happens after independence about currency. It’s not for one party to do so, they have no mandate. All they can do is put forward their policies, and the People of Scotland will decide.
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Again, I’m advocating for all of the options to be available to the post indy Gov not saying now what they will decide. They will not have all of the options if we don’t start to prepare them soon. Having the currency ready to go does not mean you have to launch it but it is there for when you need to. The lead time is too long for rapid deployment that is well constructed if we hit a crisis.
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What exactly do the people of Scotland know about currency? They got all of their information from Thatcher. Surely they deserve better than that?
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If I can be bothered I should totally revamp my yesindyref2 wordpress to make it useful now, but also with resources that were great during IR1, and are still useful now. One such is Wealthy Nation but it’s presumably been taken over by someone using its left over to-links and ratings, so you need to go to wayback to find it. Here for instance:
https://web.archive.org/web/20140921062028/https://wealthynation.org/
Scotland is not just for one political group, it’s for all – including the Conservatives / Labour / LibDems. Exclude them and we are not a Nation, we are just as bad as a plutocracy.
And with that, it’s good night from me.
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