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 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.