By Mark McNaught
Denying Scots the pound; thas col’ pimpin’.
During George Osborne’s hectoring speech on currency union, he declared “A vote to leave the UK is also a vote to leave these unions”, and that “There is no legal reason why the rest of the UK would need to share its currency with Scotland”.
Instead of the three parties unifying over what additional powers to allocate to Scotland in the event of a ‘no’ vote, they unify to threaten to deprive Scots of their own currency. Revolting.
Westminster is acting like a strung-out abusive pimp, berating his women as nothing without him, completely dependent and submissive, and threatening to beat them if they escape. I imagined a cartoon of Big Ben in a zoot suit grabbing a bedraggled Scottish woman, slapping her around, and yelling “You ain nuttin widout me bish! I made you! You wouldun las five minit on da street widout me. I own you. You aint goin’ nowhere. Now ged out der an make me sum money!” Any artists out there?
In case there was ever any doubt, Scots must now realise the union has never been an equal partnership. Vote ‘yes’, run, and never look back. Imagine what Westminster has in mind if Scots actually vote ‘no’ to keep them in permanent submission, keep the oil money flowing to the UK treasury, and have a place to park their WMD’s. Apparently, Scots aren’t good for anything else, and don’t deserve the pound if they seek a better future.
The Sterling zone is currently comprised of the UK, Ascension and Tristan de Cunha, South Georgia and the South Sandwich Islands, and the British Indian Ocean Territory. The Isle of Man, Jersey and Guernsey are in formal currency union with the UK, and are ‘Crown Dependencies’. Gibraltar, the Falkland Islands, and St. Helena use a currency board to peg their pound to the UK pound. Unofficial users include Uganda, Zimbabwe, Zambia, Sierra Leone, Tanzania, Rwanda, Malawi, Botswana, and Mirpur in Kashmir Pakistan.
If Zimbabwe and Sierra Leone can use the pound, so can an independent Scotland.
If Osborne’s stupefying bravado is authentic, and the three parties actually follow through on their bluster and exclude Scotland from a currency union, the question remains under what status Scotland could retain the pound, not whether. If there is no legal reason why the r-UK would be obliged to form a formal currency union with Scotland, then there is no legal reason why Scotland cannot make alternate arrangements to continue to use the pound after independence, and no legal reason to take on debts incurred by the r-UK.
What Mr. Osborne ruled out was a formal currency union, which would involve the Bank of England continuing to set monetary policy over Scotland, and be the lender of last resort. This does not prevent an independent Scotland establishing a currency board, which would peg the Scottish pound to the r-UK pound, pending a long-term solution.
Given Scotland’s massive petroleum reserves, whisky revenue, VAT, and tax revenue from their own lands and citizens’ income, Scotland could begin independence debt-free, and remain so far into the future. If revenue and expenditure are properly planned and managed, the Scottish Republic would not have to issue bonds or borrow, and could institute a moderately progressive tax scheme with no loopholes that could be adjusted to balance the budget and build up a sovereign wealth fund like Norway. Scots could avoid Goldman Sachs and the financial markets becoming their new pimp.
In addition to a Scottish Pound, Scottish businesses could also accept payments in euros, as is done in parts of Northern Ireland and the Republic of Ireland. Both could be used in parallel and see which one works better, perhaps adopting the euro later on. Or, Scots can pursue a petroleum backed monetary union with Norway. That’s the point of independence: ditching dependence on Westminster and making your own decisions.
Scotland can institute sound financial regulation, reducing the risk of having to bail out the banks in the first place. Constitutional provision can be made to separate investment banking and commercial banking, so that Scottish taxpayers cannot be held liable for proprietary trading and gambling on risky derivatives. In the US, Glass-Steagall was very effective in mitigating bank failures from its inception in 1933 until it was repealed by the Commodities Futures Trading Act in 2000. We saw what happens after sound financial regulation was abandoned. Scotland can learn from others’ mistakes.
Above all, Scots must abandon the idea that they are dependent on Westminster. Vote ‘yes’, and blossom after independence. The pimpish bluster emanating from Westminster will backfire, and ultimately shrivel r-UK influence. If leaving the UK means leaving all unions, then Scotland ditches the Monarchy, feudal aristocracy, and the Commonwealth too.
Why on earth would Scots want to belong to any of these unions in which they are treated with such contempt? I’m beginning to understand much more clearly why 13 colonies on the Atlantic seaboard dumped Westminster 238 years ago. They didn’t do so badly afterwards.