A man, plan A, a canal – currency union!

A No majority appears the most likely response on 18th September, and a very high turnout. Those are neutral facts.

Alex Salmond won last night’s debate – he was more skilled rhetorically, and has only one weak point that Alastair Darling can use. As Darling had used that weak point well in the previous debate, Salmond had evidently taken counsel with his speechwriters and devised several excellent rhetorical responses to Darling’s factual and accurate criticisms of the SNP’s plans. They both bellowed at each other a lot and I doubt if their shouting-across-each-other attitude convinced anyone. That’s my opinion.

As the audience interrogation exposed, Labour’s failure to oppose the Tory/LibDem destruction of the welfare system and privatisation of the NHS, was their worst weakness in trying to campaign for Better Together.

Why I’m voting No:

A better nation…?

When I published Leaning Towards No, I expected reaction from Yes voters who’d been hoping I would come down on their side of the fence.

I wasn’t expecting the reaction to be so supportive of the SNP. From the reactions, [hardly anyone]* who plans to vote Yes intends to challenge the SNP’s plans to install devomax “currency union” in place of our present devolved system, and while some actively support the plan, many simply don’t see changing the SNP’s policy as possible.

*Not quite “no one”, as I initially wrote.

It therefore seems likely that – much to my annoyance and disappointment – I really don’t have any choice but to vote No. I don’t support devomax. I never did. I won’t vote Yes to have devomax replace status-quo devolution, and that’s what the Scottish Government’s White Paper says is going to happen.

Let me go through the various objections I’ve received to this, beginning with the silliest. (None of these are direct quotes from anyone, so if you recognise yourself in them, it’s purely coincidental.)

Tolerance and politics

There were two big arguments going on in non-party-political politics the past two years: lifting the ban on same-sex marriage (England and Wales, 29th March: Scotland, sometime this autumn after the Commonwealth Games and this other thing: Northern Ireland as soon as they lose the court case).

Making it legal for same-sex couples to marry, matters hugely to people in same-sex relationships, obviously, but to everyone else aside from a small number of seriously homophobic fanatics, it’s no big deal: two-thirds of the population of Scotland agreed that gay marriage should be made legal in a 2012 poll.

This other thing that is happening in Scottish politics: the referendum. In the US, where they have referendums whenever they can get enough voters to sign off on one, they went through a phase of holding referenda in which voters were invited to agree that “marriage is between a man and a woman”, which was then held to mean that marriage between a man and a man, or a man and a woman, was unlawful. In the UK we referend much more rarely, and only – so cynics say – when the government thinks they can get the public to vote the way they want.

Does the SNP really want independence?

I know that sounds like a silly question.

@EyeEdinburgh there is only one fact !! Yes means decisions are made at Holyrood rather than Westminster. Everything else is opinion

— YesFalkirk (@YesFalkirk) February 25, 2014

Back a couple of years ago, one of the ideas being proposed about the referendum was that it should include a third option – devo-max or devo-plus. In July 2012 I noted the multiple reasons why – though undecided on the Yes/No question – I was against these options, and moved on: there seemed no reason to dwell on what was not going to be voted on.

Tom Gordon outlined the difference between the two, and who was supporting them, in the Herald:

Devo-plus was supported by LibDem Tavish Scott, Conservative MSP Alex Fergusson and Labour’s Duncan McNeil plus Reform Scotland, a think-tank based in Edinburgh that is, it says, independent of its parent think-tank Reform based in London:

devo plus could be a credible alternative to independence, if that option was rejected in the referendum.

Devo-max was floated as “full fiscal autonomy” and was supported primarily by the SNP:

Devo Max is intended to make Scotland more accountable for its spending. At present, Holyrood is responsible for 60% of all public spending in Scotland but has a say in setting and raising just 6% of it, through business rates and council tax.

Under Devo Max, Edinburgh would be responsible for raising, collecting, and administering the vast majority of taxes and benefits, and would receive a geographic share of North Sea oil revenue. EU rules mean VAT would stay the same across the UK, and financial regulation, employment, and competition law would also remain reserved.”

Offshore politics

When the SNP transited smoothly from “we’ll use to the Euro” to “we’ll use the pound” that was a campaign tactic.

When the Tories, LibDems, and Labour all bounced to their feet and said ha ha, we won’t let you use the pound, that was a campaign tactic.

I do not believe either the Yes Scotland or the Better Together campaigns have really thought this through: or at least, they are certainly not making a fact-based argument based on having thought this through.

Ian Bell writes in the Herald:

“Hardball” is the macho cliche being applied to the Chancellor’s fiat towards a currency union. Despite its protestations, Mr Darling’s team pursues the kind of negative campaigning that never goes out of style in Westminster. No compunction is involved. The referendum must be won at all costs. But what might that cost be, exactly, if the prize is a united kingdom in the aftermath?

Money money money

I work all night, I work all day, to pay the bills I have to pay
Ain’t it sad
And still there never seems to be a single penny left for me

If you have a car, you’ll have noticed your petrol costs have been going up. When you do your shopping, food costs are terrible these days. Everything’s more expensive, money just doesn’t seem to go as far as it did.

Ian Bell wrote on 30th June:

So who still believes that the cost of petrol, food or credit, for nations or individuals, rises or falls because of the pure, dispassionate action of market forces? Speculative attacks, such as “aggressive tax avoidance”, are hardly in the spirit of the thing; the fiddling of interest rates is another malignity entirely. It strikes at the heart of capitalism. When prices cannot be trusted – for such is the effect – there is no free market.

In the case of Barclays, and perhaps 20 other household names trading on the public trust, that was the whole idea. The London interbank offered rate (Libor) and its European equivalent were supposed to act as guarantees that bankers’ claims matched reality, that they described accurately commerce between banks and, by extension, the wider world. For the sake of their bonuses and their bank, traders at Barclays decided to dispense with annoying, unhelpful reality. Time and again, for years, under the alleged instruction of “senior management”, they lied.

You don’t need to understand how Libor is constructed as a global benchmark, with highest and lowest figures discarded and averages compiled, to grasp what was done. Bankers were taken at their word. Instead of regarding this as a solemn responsibility, they took it as an opportunity, offered by suckers. The simple analogy is discovering, after a day at the races, that every nag was doped. Forget the casino economy: these characters were controlling the roulette wheel.

Do you remember the Occupy movement? I don’t know why I say “do you remember”: it’s not so long ago that they were camped out on the steps of St Pauls in London, the small area of the Square Mile that is owned by the Church, not Mammon: not so long since the tents disappeared from Charlotte Square in Edinburgh, where they were a daily reminder of the banks that own so many of the buildings around them. They were wild-eyed radical tent-dwelling hippies, who’d listen to them?

But they were right.

Ian Fraser, writing on 5th December 2011 in QFinance:

What disturbed me the most about the November 1 session was the regulators’ seeming nonchalance about criminality in the UK’s banking sector. At times, using the tortured and obfuscatory phraseology, the financial regulators almost seemed to want to pretend that criminality and fraud didn’t, or couldn’t exist in the domain they are supposed to police. This struck me as very strange.

When I wrote “Helicopter Money and Stephen Hester“, it was meant to be an account of what happened to the rich instigators and their victims – to describe the links between Paula Daly, who became homeless after the bank foreclosed on her business in September 2008, and Jeffrey Verschleiser, head of the sub-prime mortgage operations at Bear Stearns, who had just booked a 93-room luxury hotel for a family weekend.

Despite sub-prime mortgage operations having led to a wave of criminal repossessions across the US (including, quite literally, a special court system so that fraudulent and predatory loans could be resolved in the lenders’ favour and the houses attached to them sold again with clean paperwork) Jeffrey Verschleiser wasn’t worried he might get prosecuted any more than he had money worries. I noted this in passing, citing Why Isn’t Wall Street in Jail?, which opens with Matt Taibbi, of Rolling Stone, and a former Senate investigator in a Washington bar in January 2011:

“Everything’s fucked up, and nobody goes to jail,” he said. “That’s your whole story right there. Hell, you don’t even have to write the rest of it. Just write that.”

I put down my notebook. “Just that?”

“That’s right,” he said, signaling to the waitress for the check. “Everything’s fucked up, and nobody goes to jail. You can end the piece right there.”

A fortnight ago, Matt Taibbi wrote about the conclusion of the first criminal trial which has sent Wall Street staff to jail:

#SOPA and #Indyref: Why the Tories are going to fight foul

Tomorrow, 18th January, Reddit and English Wikipedia and quite a lot of WordPress and various other online communities, big and small, will be blacked-out from 5am, British time, to 5 again the next morning (midnight to midnight, Eastern Standard Time, or the hours Washington DC keeps). This is a protest against the SOPA and PIPA legislation: more links here. This is not actually a post directly about SOPA and PIPA, which none of us outside the US can actually do anything about anyway aside from note what this legislation is, why the US government is doing it, and, if you’re a geek with a talent for explaining stuff to politicians, writing to your MP and asking to meet with them to explain why threatening a website owner with five years in jail for the 21st-century equivalent of recording a film on your VCR with the intention of watching it over and over again is stupid.

There, I said I wasn’t going to talk about it. Excuse me. I’ll move on.

Why will the Tories fight foul? What does this have to do with US Congress legislating on the Internet?

On ZDNet Government, David Gewirtz writes: 5 reasons why SOPA, PROTECT-IP and other legislative idiocy will never die:

• You can’t really compete against consumer behavior.
• Fear sells.
• There’s a lot of money to be made from fear.
• Politicians need lobbyists.
• Lobbyists have a disproportionate influence on politicians.

First of all, let’s consider: assuming that the Tories want the Union to be preserved, what’s their best means of going about it?

Why does George Osborne think he’ll get to dictate Scottish currency?

This is genuinely confusing.

Scotland, right now, is part of the United Kingdom. If after autumn 2014 Scots vote for devomax or status quo, Scotland will still be a part of the United Kingdom. As part of the United Kingdom, Scotland uses the same currency as England, Wales, and Northern Ireland, but different banknotes – under licence from the Treasury, the Bank of Scotland, the Royal Bank of Scotland, and the Clydesdale Bank, and four banks in Northern Ireland, get to print banknotes.

If Scotland votes for independence, then among many other decisions that will have to be made, will be about the currency. There seems no reason why we wouldn’t go on using Scottish pound notes and decimal currency, the familiar patterns of £2, £1, 50p, 20p, and even the newstyle thatchers and majors for 10p and 5p: whether the pre-independence coins and banknotes will be honoured or if we’ll all have to trade in our cash in hand for newly-minted Scottish notes and coins – that’ll be all part of the long complicated process of separating Scotland from the rest of the UK. And that’s just the visible part of the currency change – the rest of the banking and currency iceberg will be a lot larger. Scotland inherits 8% of the UK’s total debt. All of that will need to get worked out.

Sp what on earth does Osborne think he’s talking about when he says:

As politicians on both sides of the Border focused on the detail of the debate, Mr Osborne refused to confirm whether an independent Scotland would be allowed to continue to use the pound officially as its currency. In subsequent briefings, the Treasury confirmed that, while it could not block Scotland from using the currency, it could be reduced to a situation where it had no say in fiscal policy, was prevented from printing its own money and was locked out of any valuation decisions. Treasury officials confirmed this would mean Scottish banks, which are licensed by the Bank of England to print their own notes, would be barred from doing so in the event of independence.

This leader in the Financial Times doesn’t clarify things either. The presumption seems to be that Scotland has no alternative but to keep using English currency or to join the euro:

Mr Osborne refused to say whether the rest of the UK would agree to a currency union with an independent Scotland, telling ITV News: “All these issues are going to be fleshed out now and flushed out. The SNP is going to have to explain what its plans are for the currency of Scotland.”
The SNP’s longstanding support for an independent Scotland in the European Union has implied euro membership, which is a prerequisite for new EU members, subject to a referendum. Mr Osborne said last night that Scots would ask themselves “is that a currency you want to be joining at the moment?”

I really don’t get it – is there something obvious I’m missing, or are they? Just as the referendum should have three options – status quo, devomax, or independence – so an independent Scotland has three options – keep using Treasury sterling, establish Scottish pounds and pence, or join the euro. (And note: Scotland is not a new member of the EU.)

Why would Osborne think it was up to him to decide this? Does Malachi Malagrowther need to write some more letters?