Arguing the wrong debate

The currency debate is a pure waste of time.

Keep Calm and Waste TimeThe SNP’s line if Scotland votes Yes has for several years been that Scotland will continue to use rUK’s pound. This is a good campaign strategy as far as it goes, since it means people don’t have to think about the logistics of setting up a Mint in Scotland to produce our own coins and a national supply of banknotes: it means people don’t have to think about changing currencies if they go to England/Wales post-independence: it means people don’t have to think about monetary change as a symbol of the huge changes of independence.

So, good campaign strategy, but it’s a completely rubbish way of deciding on a currency for Scotland post-independence.

To counter this SNP campaign strategy, the UK government/Better Together campaign have announced they will not “permit” Scotland to make use of the pound post-independence, and to counter that… but never mind. The whole thing gets indescribably messy, with both sides grandstanding more and more, and the whole thing is an utter waste of time.

If Scotland votes No, it will not matter what anyone said about what currency to use or not use.

If Scotland votes Yes, the entire political and financial landscape changes, permanently, and not one thing that anyone’s said pre-indyref is in any way relevant to the decision that would have to be made.

(And, regardless of what either side has said about the issue of national debt: if Scotland goes independent, we take with us our share of the UK’s national debt proportional to our population. That’s just how it works.)

Mary Slessor on the Clydesdale tennerBy March 2016, Scotland would have to decide what currency would best serve the Scottish economy. I am not an economist, but I know enough about economics to know that this is not a decision to be made lightly, for political reasons, or by campaign grandstanding.

Every plan mooted by radical or neoliberal about what Scotland could do if independent is fundamentally dependent on a sound economy, and while Scotland could certainly function as an economically independent country, to remain so, the right decisions have to be made about currency, offshore sharks, mortgage securitisation, and a host of other complicated decisions that don’t translate into convenient political soundbites.

What is a serious topic of discussion is how the decision will be made what currency to use. There are three basic options – euro, UK pound, or Scottish pound – and it is probably impossible to have a realistic discussion on which one would be right for Scotland by March 2016 if there’s a Yes vote, until after the referendum, in the changed political landscape that would be created by a Yes vote.

But it would be quite possible to discuss how Scotland would decide which option to go with and how to review that decision. That discussion, even if Scotland then voted No, would not be a waste of time: no intelligent examination of currency and economics is ever wasted, especially not in this era where the UK government and opposition are both talking austerity as a fix-it for all economic problems.

euro notes Meanwhile, the chest-thumping arguments over “we’ll use the pound!” “we won’t let you!” “you can’t stop us” “you’ll have to use the euro!” don’t impress me one bit.


On Wednesday, 26th February, 7-9pm: free public seminar by Edinburgh Active Citizens Group in the City Chambers:
-Can Scotland stand on its own economically?
-Beyond oil: how sustainable is Scotland’s economy?
-How do we pay for the Scotland we want?

2 Comments

Filed under Economics, Poverty, Tax Avoidance

2 responses to “Arguing the wrong debate

  1. There are two issues: what currency Scotland uses, and what say it expects to have in how it’s run. There’s nothing to stop the pound being used de facto in an independent Scotland, but there is a debate to be had about whether Scotland is better represented by 50+ MPs elected to Westminster, or some – as yet undefined – process by which an independent Scottish government might input an opinion to rUK’s monetary and fiscal policy. If the SNP thinks Scotland’s being ignored at the moment, what effect does it imagine some sort of backstairs consultation is going to have on Whitehall and the Bank of England? An independent Scotland might well have more influence in the eurozone.

  2. Why is everybody so opposed to the €uro ?
    Ireland seems to do okay with it now.
    Why is Alex Sammond so scared to putting this option to his people?
    I don’t really think the Yes Campaign will win though on 18th of September…

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