SCOTLAND

[grrclark]

Scotland will have no choice but to use sterling - even if they have no control over it. If they float their own currency, everyone's borrowings will still be in GBP. If the Scottish pound tanks 10% after flotation (quite plausible) Scots will have to come up with 10% more to pay their mortgage.

 

Of course, both the government and consumers could default on their obligations - if so, welcome to junk status for Scottish bonds.

 

I agree, just now there is not an alternative. As part of a negotiation it could be that there is an agreed period of x years, but that will come at a cost.

 

A Scottish currency would be the best long term choice, but it would be subject to massive speculation and would mean an awful lot of investment. How long was the Euro planned for prior to issue, something like 15 years I believe?

 

There is a school of thought that Scotland would not need to have a regulatory bank and could follow a path of sterlingisation and that may actually be very favourable to success of the financial sector, but it really is a very right wing school of economic thought and that is not compatible with Scotland's current left wing leanings. It would also mandate that the country would have to run a fiscal surplus, so bang goes the big promises of the current mob in charge.

 

As a proud Scotsman and Brit' who likes to think that i am fairly economically and politically literate and reasonable it actually pains me to watch this whole thing unfold. It is constitutional and economic vandalism.

 

I likened it to the endowment sales scandal, people were promised future wealths untold and they all gagged to buy in, but this time there is no future compensation scheme for mis-selling.

 

If there is a yes vote I sorely hope that I am proved wrong and I will willingly eat humble pie and be castigated as a doom and gloom merchant, but I am not expecting to have to.

[islandgun]

surely companies will go were they pay less tax and wages, I don't think politics get in the way of profit

[grrclark]

 

If there is a "Yes" vote and it goes horribly wrong due to a very left wing Scottish Government (which I'm pretty sure it will as good jobs move South) ill feeling between Scots may turn violent as cuts deepen.

 

Last month I flew right over Sarajevo, looks a peaceful enough place now but their road to independence was not an easy one.

 

That is my fear too. I know the plan is to borrow for the first few years, but at some point the piper will need to be paid.

 

I think that the austerity policies just now will seem like extravagance in a few years time if we start out on the wrong path.

[figgy]

All this uncertainty can't be good for anyone involved or who could be affected by it.

 

Business must be suffering.

 

Depending on what happens with currency and other fiscal matters if Scotland votes for independence, who is going to lend Scotland the money in the first place to spend spend spend for the first few years. When they talk of not paying debts now

 

 

Figgy

Edited September 8, 2014 by figgy

[AVB]

surely companies will go were they pay less tax and wages, I don't think politics get in the way of profit

And where the regulations suit them and where there is a degree of financial stability.

[figgy]

Will this island end up looking like the Dom Rep and Haiti one end of the island prosperous the other third world?

 

Figgy

[grrclark]

surely companies will go were they pay less tax and wages, I don't think politics get in the way of profit

 

The policies promoted by yes just now are not really attractive to business though, there is a general belief by the yes voters that the minimum wage will raise fairly significantly so potentially putting Scottish labour costs at a disadvantage to the rest of the UK.

 

How easy will finance be to secure for businesses? if the bulk of the financial services industry move south, as is likely, then it becomes foreign investments which typically incur a premium.

 

The tax regulations and liabilities will have a very big impact, as will trading conditions and international trade treaties.

 

The only proposal so far is to have corporation tax 3% lower then the rest of the UK, so in 2015 that will be 20% UK so 17% Scotland. Ireland is 12.5% now and has the Euro as a currency and is a full EU member, so easier in that respect.

 

Attracting head offices to Scotland to benefit from a lower tax liability only gets minimal tax receipts from the plc entity. The real wealth creation comes from jobs.

 

The service industry such as call centres, etc will become more expensive due to increase in minimum wage, so not attractive to invest in new jobs in Scotland. Manufacturing is less attractive as the cost of logistics from Scotland is higher, we cant do anything about geography, so setting up large scale production is not really attractive. Commercial property is cheaper in north Wales than Scotland and closer to the larger domestic market of 55m people south of the border.

 

The indigenous Scottish business are already here so no growth in them.

 

There will always be specialist skills in Scotland and we do have world class innovative industries, but they are small and niche and not big employment generators.

[Laird Lugton]

All this uncertainty can't be good for anyone involved or who could be affected by it.

 

Business must be suffering.

 

Depending on what happens with currency and other fiscal matters if Scotland votes for independence, who is going to lend Scotland the money in the first place to spend spend spend for the first few years. When they talk of not paying debts now

 

 

Figgy

 

Figgy, business is already suffering. My wife works in the Construction Industry and says there are a lot of projects/investment on hold at the moment due to the uncertainty regarding the outcome of the referendum. In addition there is potentially a lot of capital prepared to move south.

 

My employer never misses a trick. Currently I am in a UK union with about another 1,000 employees which gives us a decent buttress against the management. Post independence no one knows what type of contract we'd be employed on. A 10%, 20% or 30% salary cut? Who'd oppose it? In Scotland about 120 people are employed by the company, not much of a strike threat there.

[grrclark]

Will this island end up looking like the Dom Rep and Haiti one end of the island prosperous the other third world?

 

Figgy

 

I hope not

 

I don't think it will be that bad, both ends could be prosperous, but if Scotland pursues a left wing ideology then I think in 5-10 yrs there will be a marked difference. We could be a wee bit like Spain or Greece without the sunshine.

[islandgun]

I remember in a previous thread on the same subject Gimlet (where are you now) spoke of a political party of business men in Scotland that advocated in the event of independence making Scotland a right of centre tax haven this think tank still exist !

 

interestingly I remember that thread as being less confrontational mind it was a while ago

[grrclark]

I remember in a previous thread on the same subject Gimlet (where are you now) spoke of a political party of business men in Scotland that advocated in the event of independence making Scotland a right of centre tax haven this think tank still exist !

 

interestingly I remember that thread as being less confrontational mind it was a while ago

 

The Adam Smith institute recently published a paper on that, it was they that talked about the opportunity of having no central bank and how that could drive Scotland to have a unique and very successful banking sector.

 

It is very right wing economics, it cannot tolerate public debt and would effectively mean we pursue the polar opposite political approach that may potentially secure the yes vote. It is also an untested model and purely academic. I don't believe it is compatible with being in the EU either, as the policies of that parcel of rogues would conflict.

Edited September 8, 2014 by grrclark

[islandgun]

 

The Adam Smith institute recently published a paper on that, it was they that talked about the opportunity of having no central bank and how that could drive Scotland to have a unique and very successful banking sector.

 

It is very right wing economics, it cannot tolerate public debt and would effectively mean we pursue the polar opposite political approach that may potentially secure the yes vote. It is also an untested model and purely academic. I don't believe it is compatible with being in the EU either, as the policies of that parcel fo rogues would conflict.

that was another good point not being in the EU

[Laird Lugton]

I remember in a previous thread on the same subject Gimlet (where are you now) spoke of a political party of business men in Scotland that advocated in the event of independence making Scotland a right of centre tax haven this think tank still exist !

 

interestingly I remember that thread as being less confrontational mind it was a while ago

Island gun,

 

I remember that thread, are you thinking of Weathy Nation?

 

http://www.wealthynation.org

 

My grandfather was a Scottish Coal Miner and like his colleagues at the time a true blue Tory.

 

Interestingly I googled "right wing Scotland" and some interesting articles came up.

[islandgun]

Island gun,

 

I remember that thread, are you thinking of Weathy Nation?

 

http://www.wealthynation.org

 

My grandfather was a Scottish Coal Miner and like his colleagues at the time a true blue Tory.

 

Interestingly I googled "right wing Scotland" and some interesting articles came up.

That's the one, seemed to make a lot of sense, blunderbuss was also knowledgeable about them,

Edited September 8, 2014 by islandgun

[grrclark]

Island gun,

 

I remember that thread, are you thinking of Weathy Nation?

 

http://www.wealthynation.org

 

My grandfather was a Scottish Coal Miner and like his colleagues at the time a true blue Tory.

 

Interestingly I googled "right wing Scotland" and some interesting articles came up.

 

That is a really interesting link, thanks for posting. I shall need to do a bit of reading and see if i can meet some of these folks.

[Laird Lugton]

 

That is a really interesting link, thanks for posting. I shall need to do a bit of reading and see if i can meet some of these folks.

 

My pleasure, there seem to be some interesting people on there.

[Blunderbuss]

All well and good but a few right wing economists are going to exert as much influence in Scotland as a rabbi convention in Gaza. The majority of the Scotish electorate are too left leaning for such ideas to gain much traction. Not all I know, but a definite majority. I feel sorry for those who don't share that philosophy who may be about to enter a nuclear free, socialist 'utopia'.

Edited September 8, 2014 by Blunderbuss

[Blunderbuss]

All well and good but a few right wing economists are going to exert as much influence in Scotland as a rabbi convention in Gaza. The majority of the Scotish electorate are too left leaning for such ideas to gain much traction. Not all I know, but a definite majority. I feel sorry for those who don't share that philosophy who may be about to enter a nuclear free, socialist 'utopia'.

On the upside, it makes it less likely we'll ever have to suffer that in the remainder of the UK. Silver linings and all that.

Edited September 8, 2014 by Blunderbuss

[grrclark]

All well and good but a few right wing econonmists are going to exert as much influence in Scotland as a rabbi convention in Gaza. The majority of the Scotish electorate are too left leaning for such ideas to gain much traction. Not all I know, but a definite majority. I feel sorry for those who don't share that philosophy who may be about to enter a nuclear free, socialist 'utopia'.

 

Sadly true, but it will only be a socialist utopia until such time as the bills can't be paid then it will be forced to change. It may well take a generation or two.

 

From my perspective as living in this part of the world, if there is a yes vote then I would rather be taking steps to try and influence that in whatever way I can. I think i would be more effective in throwing poop at the moon, but being a surrender monkey is not an attractive thought.

 

 

On the upside, it makes it less likely we'll ever have to suffer that in the remainder of the UK. Silver linings and all that.

 

Maybe it can provide a catalyst for change in the rest of the UK and get rid of much of the bloat that hamstrings the UK just now, will still be a very painful transition for the rest of the UK too I fear.

[Laird Lugton]

On the upside, it makes it less likely we'll ever have to suffer that in the remainder of the UK. Silver linings and all that.

Don't mince your words, say what you mean

 

However, up until the 1960's Scotland used to return a high proportion of Conservative MP's. In fact the picture below tells an interesting story. This explains the share of the vote in Scottish elections. 1955 was a good year for the Tories and labour has never beaten this…..

 

Edited September 8, 2014 by Laird Lugton

[Blunderbuss]

I agree. But like a few other posters on this thread, my attitude on this has hardened in the last few years. I've always been proud to be British before being English. I served 23 years in the British army having sworn an oath of alliegance which I really meant. I lived in Craigiehall just outside Edinburgh for 3 years whilst in the army, my kids went to local schools and I made many Scottish friends. I believe passionately in the union and that it is greater than the sum of its parts. I'll find it hard to forgive those that would destroy this. I've also become increasingly weary of the bile and antagonism directed at England from Scotland in recent years.

Edited September 8, 2014 by Blunderbuss

[grrclark]

What a great graphic. It probably demonstrates perfectly the chameleon nature of the SNP that follow voter fashion to grow their support. Initially it took some of the share of the conservative vote, pursuing a right wing or traditionally nationalist agenda. The SNP helped to vote out the Labour government in 1979 after all.

 

Then after the Thatcher years and the demise of much heavy industry in Scotland, which of course Maggie got the blame for, they switched to a centre then progressively left wing agenda, pretty much at the same time that wee Eck really came to prominence. Just following public sentiment and changing the message to suit.

 

Say what you like about Salmond but he is a shrewd tactician.

[Blunderbuss]

Don't mince your words, say what you mean

 

However, up until the 1960's Scotland used to return a high proportion of Conservative MP's. In fact the picture below tells an interesting story. This explains the share of the vote in Scottish elections. 1955 was a good year for the Tories and labour has never beaten this…..

 

Sixty years ago, times have changed.

[Laird Lugton]

What a great graphic. It probably demonstrates perfectly the chameleon nature of the SNP that follow voter fashion to grow their support. Initially it took some of the share of the conservative vote, pursuing a right wing or traditionally nationalist agenda. The SNP helped to vote out the Labour government in 1979 after all.

 

Then after the Thatcher years and the demise of much heavy industry in Scotland, which of course Maggie got the blame for, they switched to a centre then progressively left wing agenda, pretty much at the same time that wee Eck really came to prominence. Just following public sentiment and changing the message to suit.

 

Say what you like about Salmond but he is a shrewd tactician.

 

He is very shrewd, but apart from separation what does he actually stand for?

 

I agree. But like a few other posters on this thread, my attitude on this has hardened in the last few years. I've always been proud to be British before being English. I served 23 years in the British army having sworn an oath of alliegance which I really meant. I lived in Craigiehall just outside Edinburgh for 3 years whilst in the army, my kids went to local schools and I made many Scottish friends. I believe passionately in the union and that it is greater than the sum of its parts. I'll find it hard to forgive those that would destroy this. I've also become increasingly weary of the bile and antagonism directed at England from Scotland in recent years.

 

 

I too consider myself British but I have noticed a hardening of attitudes in England, people no longer seem to identify themselves as British first.

 

When I go down to our training centre near London I get told my country can't possibly survive on its own as England subsidises us. Free prescriptions, free care (which it's not, my aunt who has dementia has been stripped of all her assets and now only has £20k left after self funding her care home fees) free this, free that all at Englands expense which it blatantly isn't.

 

So from my perspective it certainly isn't one sided.

 

How we repair the union I'm not sure.

[Blunderbuss]

I know. I get the real feeling that whatever the outcome of the referendum, the relationship between England and Scotland has fundamentally changed for the worse. I hope I'm wrong but I'm not sure it can be fixed any time soon. I'm not one of those who think Scotland is a drain or couldn't make it on its own, but I will feel as much affinity with an independent Scotland as I do with Luxembourg.