A currency union is when two states use the same currency.
The UK is a single state, that uses a single currency: the pound sterling.
“You’re already *in* a currency union. Who in Scotland elects the Bank of England?”
When I pointed out to him this was not true, his reaction was:
“Sigh. (1) what currency do you use? (2) who agreed to this? (3) where is yr central bank?”
To which the answer is: I live in the UK: the UK is one state with one currency: the central bank of this state is the Bank of England.
Now it is true that several other microstates use the pound.
Jersey and Guernsey, which are the last remnants of the Angevin Empire; the Isle of Man, which became attached to the UK as a feudal possession of the Plantagenets, uses the pound: Akrotiri and Dhekelia on Cyprus, the “Sovereign Bases” which are – like Gibraltar – last remnants of the British Empire, use the pound. All of them are therefore in currency union with the UK. None of them had any real choice in the matter. All of them have this in common: they are small places, microstates, unable to be quite independent, and in any case never allowed the freedom to find out if they could manage on their own. None of them qualify to be EU members, nor ever could, though several of them have “special relationships” with the EU, arranged by the UK: so too could Scotland, probably.
This is the goal of the SNP, declared in their White Paper: to make Scotland a neo-colonial possession of rUK. To reflect a common campaign claim of theirs: no other country which got its independence from the UK ever then turned back and submitted to currency union voluntarily. But that’s what the SNP wants for Scotland.
And this goal – narrow and limited and appalling in consequence though it is – has gone unchallenged by the Yes movement. The Yes movement like to claim they are broad church and diverse, that a vote for independence is not a vote for SNP policy: but though some scattered individuals have declared themselves against currency union, for the most part, the Yes movement is complacently united behind this SNP policy and utters no criticism, no matter how rash Alex Salmond’s promises.
In part this is because a large proportion of people who intend to vote Yes, are voting not for independence but because they believe they have been promised currency union, and Alex Salmond has tied his political future in Scotland to a commitment that they will. These voters might well have said No to full independence: they don’t think Scotland is ready to go it alone. They want to know that they can vote Yes but still have the same pound, the same Queen: that they won’t really be making a big change. These are the voters who emphatically said they would rather have devomax/devoplus in 2012. The Better Together campaign tried to catch these voters by promising “more powers” for the Scottish Parliament after the next general election: Yes Scotland/SNP, in a flash of canny brilliance, caught these voters by promising them that by voting Yes they would get devomax, not independence.
Whether Yes supporters are aware enough to realise they cannot afford to put off those voters by pointing out that currency union will only be legislated at Westminster on terms beneficial to rUK, or unaware enough to have swallowed whole the story that they can vote for devomax and call it independence, the result is the same: no public opposition to currency union.
One line that’s being taken is persistently “We’re already in a currency union!” which shows a profound misunderstanding of what a currency union is. Scotland is a devolved part of the UK state. The UK state has one currency. Scotland is therefore not in a currency union, though several microstates are in currency union with the UK, as described above. (It would greatly mischaracterise the power structure of the relationship to say “the UK and Jersey are in a currency union”. Jersey may store trillions of personal wealth – it’s the richest offshore tax shelter in the world – but that gives Jersey voters less say in how their island economy is run than we have.)
I did wonder where Yes campaigners were getting this from. If you take the trouble to look up any neutral information resource about what currency unions are, you will find without exception: two or more states can be in a currency union, one state cannot.
Well, given James Meadway’s senior-economist status, they are getting this from the New Economic Foundation. Which, by a curious coincidence, was touted to me on Facebook just the other day by a Yes voter “Check out New Economic Foundation for good unbiased thoughts on the economic questions and concerns.” Apparently what “good unbiased thoughts” means in this context is “supports SNP policy”.
I am undecided about whether or not I support Scottish independence. But I understood since March that, unless some alternative came up, I would have to vote No to oppose currency union.
No alternative has appeared. Alex Salmond has claimed publicly that a vote Yes means a vote for currency union, and the Scottish Government have a clear claim to a mandate. If the Tories offer currency union, to be legislated before May 2015, I think the SNP would have a hard time saying no to it, no matter what the fiscal conditions set: they have marketed the Yes vote to voters uncertain about independence by promising them currency union.
I read recently a splendid post on critical reading and thinking: Scottish Independence: How do you decide?
How it seems to me most Yes voters have decided, is to assume that the SNP is telling them the truth, and all of the other parties are telling lies.
The influence of the Scottish Greens is sadly negligible, apparently by their own decision: they haven’t attempted to counter the misinformation about currency union spread by the SNP, nor are they planning to campaign against currency union in the crucial months after 18th September if Yes gets the majority: there are just three articles on their website about currency union, and the only one explicitly opposing it was published in January. All the Scottish Green party members I have spoken to directly about it have either utterly misunderstood currency union (one compared it to Harrods getting to use lots of different currencies) or else think it will be safe to wait til May 2016, well after the date the SNP have set to launch currency union, to oppose what will already have been legislated – if the SNP can convince the Tories to legislate it, and if Labour and the LibDems can be persuaded not to block it.
What I think is also significant:
I went from being undecided to being Vote No in the space of a few days in March, having read the White Paper and the Financial Commission Working Group’s report, understood what the SNP intended, and understood that I could not in good conscience vote for it.
Since then, I can count on the fingers of one hand – quite literally – the number of Yes voters who have agreed with me that currency union is a bad idea and must be opposed.
Most tell me that currency union is a splendid plan. Some – my impression is a minority, but I’ve done no polling – tell me that they too are against currency union, but I should vote Yes anyway, it won’t be implemented. They have various reasons why it won’t be implemented, ranging from “Westminster won’t agree” (which is entirely possible) to “the SNP are just bluffing, they don’t really want currency union” (which is entirely plausible).
It seems clear that the referendum will be a very, very close vote – that in broad terms, the Scottish vote is split down the middle, and we could even spend the 19th and days afterward waiting on recounts.
If Yes gets the majority, by however tiny a margin, huge changes will be implemented, which nearly 50% of the country voted against. But within the 50% who voted Yes, a large proportion think they voted for currency union, and another large proportion are voting Yes thinking they’re sure to get an independent currency.
So, with regard to all economic issues – for, make no mistake, the issue of currency and a central bank is basic to an independent country’s economy – if Yes gets the majority, an overwhelming majority of Scottish voters will suffer changes they didn’t want and didn’t vote for.
I’m voting No, and considering all of above, I hope No gets the majority next Thursday.