Independence.

[pete]

I'm not sure what the original point was (or was meant to be). Re-reading it, it was about having a military. I'm not sure I have a sensible opinion about that.

What changes when Scotland continues to use sterling is that when the BoE prints 1 trillion pounds, their economy gets to keep them.

Cheers,
Robin

I was talking about j2 lot's post.

re Military I think I should get my own army. I'm not sure what I'd do with it, but I've always wanted one. Excellent point abut BoE printing loads of money though.

Yes they get to keep them, and sterling is weakened, and debts held in sterling are devalued. So if you owe a debt in sterling has that benefited you? I don't know, I need a pen and paper for that. I'm confused. I'm going to bed.

[robin]

For debts valued in sterling you're right - it gets easier to service them if the currency devalues. What about debts not valued in sterling? If we split, Scotland will take on a share of the current national debt, I guess. I doubt the lenders of that debt will be happy about simply transferring it to a new owner. So maybe the BoE will loan Scotland the money and continue to carry the original debt (best case scenario) or maybe Scotland will be required to raise its own debts and buy its share of the national debt by writing the BoE a very big cheque (worst case scenario). If they have to raise their own debts, who is going to lend them the money and in what currency?
Given the very real possibility of devaluation/inflation in sterling, it's likely that a substantial portion of any new Scottish debt will be in some other currency - US dollar or euro being quite likely - but could also be Ruble or that mad Chinese currency (I'm never sure that they actually use it ).

I hope it then makes sense that if we're using sterling and it is devalued underneath our feet it is very likely that the cost of servicing our non-euro debt will go up accordingly.

The smart move for Scotland would certainly be to delay the financial split until after any massive inflation/devaluation occurs OR piggy back on a better currency (we could start using Swiss Francs or whatever they use in Norway ). Given the rate at which our debt is climbing has only slowed down a little and given the UK might find itself paying just a few points more on future loans, it's quite likely we'll be forced into the humiliating devaluation before Scotland has to worry about its own finances anyway Personally, I hope Cameron/Osbourne are made to stay in office until the day comes, just so we can all throw rotten fruit at them Eventually they will run out of other people to blame and have to accept that the only chance they did have of turning it around was to spend spend spend ....


Cheers,
Robin

[pete]

For debts valued in sterling you're right - it gets easier to service them if the currency devalues. What about debts not valued in sterling? If we split, Scotland will take on a share of the current national debt, I guess. I doubt the lenders of that debt will be happy about simply transferring it to a new owner. So maybe the BoE will loan Scotland the money and continue to carry the original debt (best case scenario) or maybe Scotland will be required to raise its own debts and buy its share of the national debt by writing the BoE a very big cheque (worst case scenario). If they have to raise their own debts, who is going to lend them the money and in what currency?
Given the very real possibility of devaluation/inflation in sterling, it's likely that a substantial portion of any new Scottish debt will be in some other currency - US dollar or euro being quite likely - but could also be Ruble or that mad Chinese currency (I'm never sure that they actually use it ).

I wonder about the BoE. I mean technically is it the BoE or is it the Bank of UK? I suspect the latter, so if we split then errrm (oh no head hurting again). It's perhaps not unreasonable to actually agree with Mr Salmond when he said that Scotland would get a seat on the BoE committee?
Now I think about it is sterling not actually a British currency, rather than an English one?
I don't think we have any debt in currencies other than sterling, as I understand it we borrow money by issuing bonds, in sterling.

(As an aside I went to the BoE museum last month, don't judge me we were in London, it's free and well the building is quite famous and I wanted to see inside. Soanes' top lit banking halls (well what remains of them) are worth seeing. You know if you like that kind of thing. Anyway that's not the point, they have a museum where they explain "money" to school kids. It's like Keynes never happened, it is the most one sided view of economics you've ever seen, it actually made me very very slightly angry. I wonder if they change it when the government changes?)

I hope it then makes sense that if we're using sterling and it is devalued underneath our feet it is very likely that the cost of servicing our non-euro debt will go up accordingly.

The smart move for Scotland would certainly be to delay the financial split until after any massive inflation/devaluation occurs OR piggy back on a better currency (we could start using Swiss Francs or whatever they use in Norway ). Given the rate at which our debt is climbing has only slowed down a little and given the UK might find itself paying just a few points more on future loans, it's quite likely we'll be forced into the humiliating devaluation before Scotland has to worry about its own finances anyway

The Swiss are already pinned to the Euro (well they have a hard limit) - they were getting hammered by having too strong a currency.

If I was made chancellor of a new Scotland (and I'm waiting for the call) I'd wait for the storm to abate after separation then look into setting up my own currency. Initially pinned to Sterling then split. You're offering a safe haven at the end of the day with a much stronger base, well maybe not stronger but easier to understand, than the Euro. I don't know how the other small currencies avoid speculators buggering about with their currencies but we might need to learn fast.

Personally, I hope Cameron/Osbourne are made to stay in office until the day comes, just so we can all throw rotten fruit at them Eventually they will run out of other people to blame and have to accept that the only chance they did have of turning it around was to spend spend spend ....


Cheers,
Robin

Hmm that's a controversial position, you think they are doing such an awful job that we should allow them to keep doing it so history can prove you right. It is somewhat appealing though.

The whole thing is entirely speculative - there is no way Scotland is getting independence - I've still not decided if I think that it a good thing or not...

Pete

(I had chores this morning to do - can you tell? Exits stage left to fix the leaf blower...)

[tut]

The main consideration for me is whether it is worth taking the risk.

From what I can see, we would not know how it would affect our lives until it actually happened.

tut

[BiggestNizzy]

I would prefer a devolved England first.

Independance would be fine as you would just get on with it. It's a pity we won't have the ball sto give it a go. Everyone shat out of voting reform so no chance of this ever making it.

[pete]

I would prefer a devolved England first.

Independance would be fine as you would just get on with it. It's a pity we won't have the ball sto give it a go. Everyone shat out of voting reform so no chance of this ever making it.

Pretty much agree with that whole sentiment.

I have a friend who's dead against and one of his reasons seems to be that he doesn't think that the Scottish people can be trusted with independence.

Being treated like a naughty child was never going to help win me over...

[tonyg]

I'm totally against independence too - for the simple reason it'll just create more politicians and civil servants with their snouts well in to the trough to be paid for by people like us.

[Ferg]

I was interested in the Norway comparison until I learned that they pay a blanket 50% income tax and the economy is struggling because the average age of the population is rising faster than the coffers can support.

There are plenty of theories that cherry pick examples with limited scope like this one. To be honest it would be refreshing to hear a honest full spectrum account of how independence is expected to work. If anyone knows that is.

I worry this will come down to which way the Sun lies on the subject as that seems to have been the clincher in recent past.

[Sanjøy]

I vote for dependence as I want to see Boris as my PM. PMQs, G8 etc. will be awesome.

[Lazydonkey]

There are plenty of theories that cherry pick examples with limited scope like this one. To be honest it would be refreshing to hear a honest full spectrum account of how independence is expected to work. If anyone knows that is.

I fear that will never see the light of day. There are too many unknowns.

[r10crw]

I hear the Noggy argument being given either way all the time, I actually work for Norwegians and they have a similar tax scheme to us but with some higher tiers and they are most certainly not struggling. I was given the opportunity to work from their pay roll, it actually works out about the same.

I have heard this argument many times and wonder how many other arguments that I have no experience with are actually false??

In all honesty this in turn has me giving up, I don't have the time to research properly and don't trust the information that's given to me, very sad state to be in.

I suspect that what ever happens it will not have a huge impact on me good or bad and Ill just get on with it.

Craig.

[Mikie711]

There is to much spin and scare mongering going on for the man in the street to be able to make an informed decision. The vote will fail partly because people are scared of change and partly due to fear of the unknown. Simply put, I don't think anyone can predict how Scotland will fair after independence.
Take a look at Tony's reason for voting against it, and a lot of people have the same stance and have made up there minds already. The most common reason for voting against it I have heard is that they don't think it will be good for Scotland. When pressed for a why most don't have a valid reason for their point of view, more just a opinion of how can it possibly work.
Almost a case of to much information out there makes it impossible to decide so they will stick with what they know.
For me it's a yes vote, if (and it's a big if) it is handled right there are huge upsides but a lot will depend on how much debt we inherit and how the new government treats businesses and encourages new enterprise.
The Norway argument is interesting because they are the only people I have met that don't mind paying taxes, even when they are comparatively higher. They can see tangible results from paying the higher tax rates and protect their standard of living much better than most. As for being in trouble, unlikely. As a country they are extremely cash rich.

[robin]

Here's a question to consider.

If we swapped the entire population of Scotland with that of Norway - so they live here, we live there - and let each population take over running their new countries, would the Norwegians make Scotland into Norway? Would we make Norway into Scotland?

There's so much different between the two countries that to use one as a template for the other is a nonsense.

The phrase "debt inheritance" is slightly disingenuous. Firstly, you cannot inherit what you already own. Secondly the implication is that somebody else ran up the debts and now we're left to pay for them. Neither is particularly true in the Scotland vs UK context.

I expect that in the case of a divorce, Scotland would walk away with its share of the debt, probably pro-rata with population, plus or minus a few fudge factors.

So assuming it happens in 2016 that would be approx 1.5 trillion. Population of Scotland is, very roughly, 10% of the UK population, so that would be 150 billion, give or take a few 10s of billions. We'll also retain our share of UK liabilities (e.g. the need to pay pensions to the public sector and state pensioners, etc., where not otherwise funded). At a very rough guess Scotland's GDP is 15% of UKs (though exactly what would happen in a divorce situation is surely impossible to say - would a load of business migrate north or south post-split and thus shift these figures about?). So chances are Scotland would enjoy a lower debt-to-GDP ratio and, as Pete pointed out above, possibly a lower deficit also.

I'm with Tony - less government is better, which is why I will vote against independence (subject to changing my mind ). I do think that the figures show that if the rest of the UK and the new Scotland would cooperate on monetary policy then we have the possibility of being a little better off, but chances are we would spend that on a second tram scheme for Edinburgh

Cheers,
Robin

[Mikie711]

"debt inheritance" was probably the wrong term but what i meant was what you said. Less government is a good thing but would we end up with more given that we have 17,000 directly employed by the current Government in Scotland plus who knows how many indirectly employed by local councils etc.
The Norway debate is pointless as their circumstances and attitudes are totally different to ours, that said they are a model of how a small population can manage a prosperous country.
Like I said earlier, despite being pro independence, it will never happen. The vote will be an overwhelming no at the end of the day. My main concern is the after effects of the referendum and who Westminster will react. I guess time will tell.

[pete]

The vote will overwhelmingly no.

I'll probably vote yes, but there's not much in it.

I'm interested in Robin's small government reasons - no-one wants more government but does an extra country mean more government?

If it does then should we not be campaigning fro fewer countries ie

IF less government = fewer governments THEN fewer governments = less government.

So should we be campaigning in favour of a federal Europe, and sign as many powers and jobs to them as we can?