The currency of an independent Scotland

It’s a debate that always gets a little heated: unionists who understand that Scotland would be better off as an independent country are also intelligent enough to know the consequences of not letting Scotland keep Pound Sterling would only pose challenges to Scotland in the short-term*.

In this brilliant article, George Kerevan concisely outlines the four currency options available to Scotland.

In its current form, the euro has but weeks – maybe months – but won’t make it to Christmas, so let’s say that Scotland has three options on future currency given that before joining the euro under existing terms, there’s a two-year ‘proving’ period anyway.

Though it’s called The Bank of England, it is in fact The Bank of the United Kingdom which is to say, the central bank of the UK – independent of control by the government in Westminster – is 9.3% owned by Scottish taxpayers.  This is the reason why the current Scottish government insists it will be able to have a say on the board of The Bank of the England.  If Scotland is told by the Westminster government or by The Bank of England that it cannot use the Pound Sterling, we will be taking that 9.3% with us.  Yes, we will.  Whose oil do you think underwrites the value of ‘your’ central bank?  Still fancy negotiating?  Where do you think you’re going to park your subs?  Portsmouth?

Scotland holds a very strong hand though you would not know it from watching the BBC or reading any newspaper.  Yes, we do.  International law regulates the management of currencies as much as the ownership of natural resources.  Financial markets take care of the rest and as we’ve seen over the past four years… they go with the money.

* By forcing Scotland to either create her own currency, unionists acting out of spite risk capital flight north to Edinburgh where a central Scottish bank could set its own interest rates.  Given that the SNP are already known to want much lower rates of corporation tax (which I suspect is the main area of difference with the Scottish Greens), can you imagine how aggressively a modern Scotland would be drawing business from The City of London?

The very best option for unionists – and  England – is to encourage Scotland to keep Pound Sterling.  But this option is not the best for Scotland – certainly in the long-term.  The Bank of England would set interest rates and as guarantor of that currency, Scotland would not be able to offer lower, more competitive interest rates that would encourage business north to Edinburgh.  The more I watch Tories, Labour and Liberals alike spout nonsense in the Westminster parliament during ‘debates’ on Scotland, the more convinced I am that Jim Sillars may be right: let’s go for short-term pain, set-up our own currency and then watch the land south of our border struggle to make ends meet.

Most people desiring an independent Scotland, want to attain their political and economic independence within a framework that is best for both Scotland and England.  Alex Salmond has stated that his goal is for Scotland to be a friendly neighbour rather than a resentful tenant.  As with a lot of things in language, the clue is not only in the words themselves but in the gaps between – as with everything else, it’s the thought that counts.

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An independent constitution

One peculiar memory I have from childhood is being taken to watch the Queen open the new Thornton’s factory in Somercotes, Derbyshire.  I say ‘watching the Queen’ but the process involved merely watching a cavalcade of black limos hurtling past while the assembled schoolchildren waved Union flags.  I refused to hold a flag.  As someone who was known to enjoy country pursuits I was surprised that the Queen would attend the opening of a factory on the site of a bittern nest.  Yes, I must confess that I was a ‘twitcher’.  My dad did his best to confront the developers about this (but hey-ho, whisper it, Labour council *cough*.  Whispers again: you put the money in the grasping fingers).

Bitterns, it seems, are to remain as rare as dissenting voices in the Jubilee year, even in Scotland.  A curious thing last week.  A leaflet was dropped through the door listing a program of events for the Children’s Gala in June here in Kinghorn, only it wasn’t a celebration of summer or any of that.  No, bedecked in Union flags, the leaflet proclaimed a gala week celebrating the jubilee.  Wonderful.  Brainwash them while they’re young, they’ll vote unionist for life like their gormless, drooling parents.

Now me, I might have been born working class but I’m not servile.  The leaflet was ripped up put in the recycling bin.  The next morning, I found another item in the letterbox… a brown envelope.  This is for cash donations to the children’s gala and the best bit?  The envelope is numbered.  That’s right.  I’ve got envelope ’51 (spare)’.  Either the folks giving out/ collecting the envelopes aren’t trusted or the organisers are keeping dibs on who is giving what.

I love Kinghorn and it would be fair to say that my wife and I fell in love with the place almost as soon as we were off the train, never mind on first seeing the house where we now live.  We might have lived here for little over a year but we feel at home and so have tried to live here with a view to taking part.  However, though I contributed a donation last year, I will not be giving one this year.  A children’s gala should be just that: a street party for kids, by kids, about kids.

Here’s the point though: whenever I question the so-called divine right of kings or whether it is right that an unelected group should be pulling the world’s economies to the precipice using an equally unreformed parliament, I am invariably accused of being an SNP member.  There are some insults you can throw at me but that one is simply untrue.

I am not an SNP member primarily because as James writes on the Better Nation blog, ‘Why is Scotland’s constitution off the agenda?‘, the SNP has not only devised a draft constitution but has written the monarchy into it.  Excuse me but I beg to f*ckin’ differ and would, given the opportunity, exercise my right to not go down on bended knee to someone whose position in life was secured by the opportunity of birth and not by the exercise of any real, quantifiable talent.

Any discussion of a nation’s future has to be framed around open-ended discussions about what people want because sometimes, you know, ordinary punters get it right.  Cameron’s Tories couldn’t even frame a coherent, competent vision for England – let alone Scotland, Wales or Northern Ireland – so he didn’t get a majority in a system designed to deliver just such a verdict but instead a coalition.  It’s because voters were not persuaded.

The most common objection to scrapping monarchy is the question: ‘You’d want a president?  Like Sarkozy?’  No.  I don’t.

Being chosen to be Head of State for however short a term (and it should be a short term, no-one should be allowed to get comfortable) should be regarded as a fine honour.  Why not then try something new and truly different?

We already seem comfortable with the use of an official office called ‘Makar‘, a poet chosen to create verse for occasions of state.  The word ‘makar’ means both maker and poet.  In a modern society such as Scotland’s, we also owe a debt to engineers, scientists, teachers and many, many others.  As we already have the party started, why not inaugurate the next year’s Makar on Hogmanay?  For one year, the chosen Makar will greet foreign VIPs off planes, will open parliamentary sessions and attend all the formal functions at which a monarch or president would normally be the guest?  Taxpayers foot the bill for travel expenses and so on but importantly, nothing else.  It is absolutely of critical importance that the role of Head of State is seen as one of honour and an experience which, though exhausting, would be cherished.  If nothing else, it would reflect our sense of humour and what a change for someone like Barack Obama to be greeted off the plane by someone like actress/ comedienne/ constitutional lobbyist Elaine C. Smith or novelist Alan Bissett (who’d be my choice for the first Makar of Scotland for this alone).

Unionist myth No.2: Scotland can’t afford to go it alone

If you tell a lie big enough and keep repeating it, people will eventually come to believe it…

I was going to call this post ‘Scotland is a wealthy country’ but if you watch the BBC, read The Telegraph or pretty much any mainstream news media then you wouldn’t believe me.  Unless of course you saw this story, How black gold was hijacked: North sea oil and the betrayal of Scotland, first published in The Independent on 9th December 2005.

For Scotland, the torpor which still affects our perception of our own economic worth began long before the reign of Margaret, The Iron Lady.  In the few short years up to 1974, the number of coal mines in Scotland fell by a third and steel production was down by a fifth.

Perhaps, like other people in the UK, I thought that after the launch of an illegal war, I’d grown immune to being surprised by the lengths to which the Labour government in Westminster would go to twist the truth but reading this article reduced me to tears.  Forced by the law to release a report a previous Labour government had tried to bury, there was no reporting that I could find in other newspapers.  When I showed my English work colleagues, they were shocked.  They too saw that this was blatantly a work of deception.

If I can point to a single moment at which I gave up any notions of continuing to support ‘Britain’ and political union, it was this.  I’d never felt ‘British’.  I’d never had a moment where I looked at the Union flag and thought, ‘That’s mine’.  If I’d been asked what I thought I was, it was always ‘Scottish’ or ‘European’ or at a push, for instance, when completing an ethnicity questionnaire on starting a new job, ‘White-Scottish’ (though given my family’s ancestry on my mother’s father’s side of the family, white supremacists would surely never recognise me as such).

I suggest that you read the report.  It’s only nineteen pages long.  Remember as you read that the report was written in 1975.  The North Sea was producing much less oil and gas than it does now.  Also remember that though the stock of oil will not last forever, it will increase in value.  In 1975, oil was trading at a much lower value than it does now.

In 2007, real production revenues for Scotland looked like this:

Figures based on research by Professor Alexander G. Kemp and Linda Stephens, University of Aberdeen, 2008

These figures were published in ‘The Hypothetical Scottish Shares of Revenues and Expenditures from the UK Continental Shelf 2000 – 2013’, first published June 2008 (from which I’ve taken this graph).  The report is available as a PDF download on The Scottish Parliament website from here.  What these figures show is that despite there being up to twice the reserves reported by oil companies, the minimum sums estimated in 2013 will be £15bn.  (The tax revenues that will be derived from these sums will be affected as George Osborne’s budget of 21 March 2012 has had to include measures to offset the damage his budgetary smash-and-grab for cash did to the oil industry in 2011).

Norway has used their oil to fund a pension pot worth £70k per person along with other social investments.  We can only guess at how the wealth generated by Scotland’s oil has been squandered.  Nuclear weapons cost a lot more than the quoted £300m I’ve seen bandied about online.  The provisional estimate is £3bn alone.  How much did the illegal war in Iraq cost?

How then do unionists maintain the myth that Scotland can never afford to go it alone even if we had oil revenue?  Easy.

The UK Treasury splits the British Isles into five states: England, Northern Island, Scotland, Wales and Extra-Regio Territories (aka The North Sea oilfields).  Have a look at the latest GERS (Government Expenditure and Review (Scotland) report for the period 2010-11.  Scotland is a net contributor to UK finances despite the oil revenues being calculated separately (which is to say not included in Scotland’s figures).

For a fuller explanation of how the GERS figures were manipulated by GERS compilers prior to the 2006 report, see this page.

The person behind that quote at the start of this post was Josef Goebbels.  It seemed appropriate at this point to furbish readers with the full quote:

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”

Unionist myth No.1: Scottish nationalism is racist

This is the myth that most frustrates me.   When Concerned of Chelsea was watching Serbian troops bomb Croat and Bosnian enclaves in the 1990s, were the civilians who simply wanted a government representative of their own interests accused of racism even as they cowered from sniper and artillery fire?

Now that I have your attention, I am not suggesting that the English and Scottish will ever go to war ever again.  That’s ridiculous.  Like me, many Scots have English ancestors.  Many English have Scottish ancestors.  And that’s the point.  People of both countries can still point to family members and say ‘Scottish’ or ‘English’.  British, Britain and ‘Britishness’ are merely constructs.  Habits.  Like picking your nose or farting on public transport.

The Union of Parliaments of 1707 was just that, a union of parliaments.  When Scots vote for independence they will be saying ‘goodbye’ to autocracy and a big ‘hello’ to representative democracy.  Rather than lambasting Scots for being racists or just plain scum, try this: ask yourself why, more than 300 years after union, do so many Scots still want independence?  If you can answer that question, you’re part-way down the road to the one big question that English people should be asking, namely, ‘Are we really a democracy?’

In short, the UK is not a democracy and never has been.  There is the appearance of democracy, certainly.  Universal suffrage, yes.  I can remember voting in elections when I lived in England but have you ever asked yourself what happens after your constituency MP has been decided and that MP has pootered off to Westminster to join The Mother of Parliaments?  It’s a question I’ve been asking myself since 1997 when a massive landslide victory for the Labour Party led to even more Conservative rule (cutting the regulations around banking anyone? Cheers, Broon).  It wasn’t the only rightwing policy that this so-called leftwing party put onto the statute.

I’m from the west of Scotland.  It is the de facto heartland of the cancer of political entitlement in Scotland.  It used to be the rule that if it’s wearing a red rosette on election day, it will win.  That’s how it’s been for generations.  A blind dog with crooked teeth and a limp could be wearing that red rosette through the Seventies and Eighties and it would have beaten any credible candidate.  Anger and frustration with rightwing politics can lead people to do strange things, perhaps that’s why The Labour Party is slowing losing ground in Scotland… we’ve woken up.

The tide is turning.  Labour has used up the Scottish people’s tolerance, their long wait for social justice has led to voters backing a party that talks like them, acts like them and is not afraid to stick two fingers up to the UK Parliament in Westminster.  It’s probably all the Scots have ever wanted in a political party, at least since the 1980s when the fascism of the stock markets became the ruling creed.  We all want to work but we want everyone to have a fair share.

My father used to work for Glenfield & Kennedy back when it employed more than 2,000 people in Kilmarnock.  He lost his job in the 1970s when Labour ruled at Westminster in the distant parliament of another country.  Our family moved to Falkirk so my father could work there.  Losing that job, we then tried our luck in England…  Again, in 2009, the people of Kilmarnock were again betrayed by a Labour government in Westminster that seemed unable to stop Diageo bringing an end to 189 years in the town and more jobs were lost.  The Scottish Parliament was powerless to stop Diageo because it does not have control over things like corporation tax which influence the decisions made by large employers when they choose to relocate.

Stories like these have been repeated across Scotland, despite the Scottish people’s continued support for what they thought was their party.  But nothing can beat this grotesque act of betrayal by a Labour government.  Published in 1975, the McCrone report was classified as ‘Top Secret’ and buried until The Freedom of Information Act 2000 allowed the SNP to request a copy.  They didn’t get the McCrone Report until 2005.

We are repeatedly told that ‘we are better together than apart’ but who’s this ‘we’?  I don’t see English cities with a nuclear submarine base within 20 miles of their city centres.  I don’t see English people having a tax forced upon them a full year before the rest of the UK.

But then I also don’t see English people rioting as their National Health Service is stolen from them.  I don’t see English people up in arms because they pay 20% more for their water supply than they would have done had the water companies remained a state asset (as it is in Scotland) and this is despite the privatised water companies losing so much water through unfixed leaks that the south-east of England will have hosepipe bans as early as this spring.  I also don’t see English people taking former politicians to the International Criminal Courts of Justice when they order illegal wars.

In short, nationalism in Scotland is about more than identity or history.  It is about the democratic deficit between what we expect and vote for and what we actually get.

When I moved to England in 1997 in search of work, I was a pro-devolution unionist.  I did not like my father’s ‘historical nationalism’, that peculiar brand of small-nation politics that says that Scotland was stolen from us.  Scotland was not stolen from us. We gave it away every time we voted Unionist. Scots have historically been active participants in the project of Empire.  Our academies (what the English call comprehensive schools), took in working class kids and churned out middle-class officers, scientists, explorers, surveyors, engineers, teachers, politicians, writers, artists, architects, doctors and so on.  Even though Empire is long gone, the modern Scot can be found working in places as diverse as Africa, China, North America, the Middle East and the Antarctic.  Where there’s work to be had, you’ll find at least one of us.

I never made it as far as other Scots but working in England, trying to find the answers to colleagues questions about Scotland, I became a nationalist.  When I saw up close just how unjust are some of England’s laws, so unfairly biased in favour of corporations and naked greed, I resolved that I did not want my country to become like that.  When I hear that George Osborne and others are looking to scrap those planning regulations that currently exist, I am thankful that Scotland already has its own legal and educational systems, its own NHS, its own transport and utilities infrastructure.

Whenever I am accused of racism for espousing nationalist views, I remember the only meeting of the SNP that I went to with my father.  It was 1989 and recently returned from England, our family had been invited to go along and meet old friends at the Kilmarnock South branch.  I was introduced to Jim Sillars who was the guest speaker that night.  We talked a bit.  Then I talked to some other folk.  I got a real surprise.  Since moving back to Scotland, everyone I’d spoken to had had an Ayrshire accent but not in that room.  Nearly half the folk were talking with English accents.  They spoke just like me and didn’t recoil when I opened my mouth to speak.  Further, they were interested to hear about England and what I thought of where I’d spent some of my childhood.  I spoke with one guy about which was the best place to go on holiday, Cornwall or Devon.  With another, I talked about the beauty of the Peak District.

These English folk had obviously spent a long time thinking about what mattered to them.  I was not only encouraged to think about the positive reasons for joining the SNP before I made that decision (still working on that one) but to remember the things that I had liked about England.  ‘We’re not enemies,’ one old lady said, ‘we just disagree on the best way to go about things.  Look at Jim.  He used to be in the Labour Party.’

Given what he had to say about the betrayal of working people in Scotland by its ‘political elite’ that night, that was a revelation.