by Chairman of Fiscal Commission Working Group, Crawford Beveridge taken from the Scottish Government site.
Earlier this year the Fiscal Commission working group, which I chair, set out its thoughts on independence for Scotland, making recommendations on the currency that Scotland should use on independence and the way in which an independent Scotland could run its financial affairs.
The members of the group have made clear that they will remain impartial in the debate on Scotland’s future. However, in preparing the report there was no doubt in the minds of the four world leading economists – including two nobel prize winners – who make up the Commission working group that Scotland is a wealthy and productive country that has “the potential to be a successful independent nation.”
The working group’s report was clear that the best currency option for Scotland – and the UK – would be to retain Sterling and continue with the Bank of England operating across a Sterling Zone as part of a formal monetary union.
Some commentators, such as the House of Lords report last week, have suggested that a currency union may be too complicated whilst it is widely reported that the UK Government will talk down the prospects of a currency union or suggest the constraints on Scotland would be too restrictive. As someone who has looked at this closely, debated the question with the Commission members and thought carefully about what this means for business, I cannot see how these claims hold particularly in the context of the proposition put forward by the Fiscal Commission.
A currency union is to me, the most sensible option, the simplest option and is clearly best for Scotland’s businesses and households. It could work seamlessly from day 1, would provide a continuing platform for trade and would help the division of assets and liabilities which are denominated in Sterling. With monetary policy determined at the Sterling Zone level, key opportunities for growth and tackling inequalities would flow from greater access to the key economic levers that would flow from such an arrangement. As the recent financial crisis has highlighted, risks also have to be managed – as they do under any macroeconomic framework including remaining in the Union – and in my view, the balance of opportunity and risk is enhanced, not inhibited, by a currency union.
At the most basic level, as the fiscal commission proposition sets out, a vote for independence would see key economic levers transfer to the Scottish Parliament and it would be for people in Scotland to decide how to use them to grow and rebalance the economy , to counter the geographic pull exerted on finance and jobs by London and the South East,to deliver the infrastructure and services reflecting the
choices of the people in Scotland and to provide greater opportunities for all.
choices of the people in Scotland and to provide greater opportunities for all.
With independence all revenues raised would be retained by Scotland for Scotland. At present only 7% is raised and retained locally and whilst this will increase to 15 per cent with further devolution this still reflects a constrained and centralised system.
Alongside this welfare and employment policies would also be the responsibility of the Scottish Parliament under independence with the opportunity to establish a system that reflected the values of the people in Scotland – rewarded work while properly protecting the most vulnerable in Scottish society. There would also be far greater scope to integrate such new responsibilities with our existing powers in skills and education.
At the same time, the Scottish Parliament currently has no influence over the wider economic levers of regulation and competition policy, over markets that affect key areas of every-day life such as the energy market or in determining issues like employment rights or the use of intellectual property and patents to support growth and jobs. These powers and responsibilities would come to Scotland with independence.
As the Fiscal Commission Working group said in their report, political considerations may cloud pre-referendum comments and policy statements, but these will differ significantly from the actual decisions taken post referendum when it will be clear to the UK, as well as to the Scottish Government, that an agreement would be in their common interests.
A mutual agreement on borrowing and debt levels, something which would underpin a currency union would be good for both economies. Imagine if we had such effective controls prior to the crisis to stop the build-up of the massive public sector debts we are currently paying for?
Any economist or Chancellor knows that every economy is subject to constraints, either by a formal arrangement such as a Sustainability Agreement or by the power of the markets. As the Balance Sheet recently published by the Scottish Government sets out, Scotland is in a relatively stronger fiscal position than the rest of the UK and meeting any such realistic targets would currently be easier for Scotland. Ensuring that this remained the case should help focus the minds of policymakers in London and Edinburgh on the importance of growth and ensuring everyone has an opportunity to succeed.
The four economists on the fiscal commission who have designed the currency union have nothing to gain from the decision the people of Scotland take. In contrast, I fully accept that the UK Government and bodies like the House of Lords have a very active stake in the debate and are clearly opposed to Scotland becoming independent.
However, I firmly believe that if there is a vote for independence, our proposal for a currency union will be in the best interests of the rest of the UK. This is what particularly disappointed me about the House of Lords report – it lacked objective scrutiny and it’s arguments were not supported by its own data.
As we recommended in our report, the right response to our proposals is for both the Scottish and UK Government’s to engage in technical discussions on the proposals the Commission has made and look at how they would go about delivering them..
My personal support for independence is well recorded. My experience with the fiscal commission, has made clear to me that independence, alongside a currency union, will give Scotland the means to strengthen its own economy whilst continuing a cross border market for both countries and for the people and businesses within them.
(The illustrations are mine)
From a monetary point of view I think retaining the pound makes a whole lot of sense, at least from 19th September 2014 until we are a fully independent country. I believe the transition period is anticipated to last around two years. After FULL independence I think we should drop the pound and move to our own currency which I think should be the MERK, no doubt others will have alternatives.ReplyDelete
As an aside Tris, oh my god her she goes again I can hear you say. :-)
Have you read this over on wings?
I should warn folks that THIS article should be read/viewed only by those with a STRONG disposition! :-)
If you are really up for continued punishment then you can always watch this. You have been WARNED! :-)
Rumour that this is the head of The Truth Team.Delete
Are you SURE CH?Delete
He looks too good looking to be head of the TRUTH team! :-)
CH... read what they say about Johann on their site and I think you'll agree that the little guy is a perfect candidate for the job.Delete
A compelling piece of writing and one that won't get the exposure it deserves in the MSM.ReplyDelete
When unionists talk down a currency union it makes me smile, they speak as if it us that couldn't manage without them when in fact, the opposite is true; no currency would survive unscathed if near to 10% of its users disappeared overnight.
According to some economists, the UK economy has been petrochemical-based for the past three decades, 90% of that would be gone from the UK's ledger, no way can that be a good thing.
I watched and listened to the Lamont interviews - f'ing car crashes. The radio interview was a stooter. I'm gearing up to watching Anas live up to his name, but there is olny so much I can take at a time!!
Managed about 45s of Truth Team before I thought "life's too short". Doesn't matter how often you tell them it's not about Alex Salmond, they still play the man. I wonder what they'd do if he announced that following a Yes vote he'd retire having fulfilled his life's ambition? Not saying he should just interested in their reaction.
I agree Panda.Delete
Every time I see one of their SPECTACULAR car crash events I say to myself well that was BRILLIANT but there's no way they can outdo themselves on this and lo and behold out they come AGAIN and surpass what everyone thinks was an unsurpassable car crash with an even GREATER car crash!
My advice to anyone considering watching these videos is that they ensure there is plenty of room on the floor. You may start watching them SITTING but you'll end up on the floor GUARANTEED!:-)
My second piece of advice would be to ensure you had a medical team on standby. You are going to need their expert assistance by the time you are finished watching the videos. :-)
Meanwhile the UK has been downgraded to AA+ so it looks like they might be pleading with us to keep Sterling.ReplyDelete
If they keep on downgrading the UK at this rate they will be down to BBB or LOWER before 18th September 2014! :-)_Delete
Oh dear, oh dear, oh dear.ReplyDelete
Equivalent REGIONS in Europe don't have as many powers as the Scottish government (although that's not entirely true... Faroes, Greenland, Gibraltar, Guernsey, Man, Jersey all have more powers that Scotland.
I think though that Johann should remember that we are not a region. We are a country.
I wonder if Labour voters like the idea of macroeconomics being handled more than half the time by the Tories, smacking the poorer people in the face while rewarding the rich.
Most people in Scotland don't want to be paying for nukes, while the old go hungry and cold. We know that Johann is quite happy with that, incase Kim Jong Un sends his nukes to Kelvinside.
She's not a very polished performer is she...
And as for Sarwar... eeeek... pathetic.
And we thought that Don't Hide in the Subway Gray was bad...
BTW: I just couldn't do the Truth Team one. There's only so much a guy can take on a Friday night.ReplyDelete
But I read this on the page about her, so that's the Truth part out of the title...
"Since her election as Leader, Johann has proven herself to be a formidable opponent to First Minister Alex Salmond and is driving through a number of changes to the party as Labour begins the road back to government."
Somewhere, Pa, I saw a very simple explanation of what would happen if Scotland left the UK and the sterling area at the same time.ReplyDelete
Without oil to cover its back (and the expectations of much more over the next 40 years) the pound sterling would plummet. This would be terrible for England, and as a major trading partner of England's Scotland would be badly affected too.
It makes sense for both countries to remain within the currency union for the moment, although my personal preference (from an emotional point of view) would be to have our own currency, perhaps with a name connected to the Scandinavian currencies.
Oh dear, That'll be Gidiot greetin' again.ReplyDelete
It's been junk for decades only propped up by the money men manipulating markets based in the City and Wall street bringing a whole new meaning to mmmm..
Aye fair enough. We're in a worse state than Greece, Portugal or Malta, but until recently we had AAA status... I always thought it was mad.Delete
"According to one Scottish Labour MP, speaking anonymously to the Herald paper, the plans are "not going to happen".ReplyDelete
"In a series of confused interviews since the proposals were unveiled, Ms Lamont has refused to deny that there was disquiet among Labour MPs about the new devolution proposals. Many Labour MPs have said they are boycotting the Labour conference in protest at what they see as a reduction in their power and influence."
So all these parasites care about is THEIR power and influence.
Sod Scotland...sod Britain, sod everyone, except THEM!
Are they for real?
Even with their boycott of the Labour conference it STILL doesn't explain ALL the empty seats at Inverness! Hell I remember just a couple of weeks ago the SAME hall was filled to bursting with folks listening to someone or other. What a difference a couple of weeks can make! :-)Delete
You should be aware that these photos were taken before the buses from England arrived. Half of them thought they were at a Ken Dodd concert but that the Diddy-men had taken over.
Ah1 that explains EVERYTHING! :-)Delete
I guess the CHEAP rate for bus hire doesn't start till Saturday!
Dodgy is as dodgy does when it comes to money, donations expenses oh and the TRUTH where Labour are concerned!Delete
So I'm wondering... why does this man need a bus to do his surgeries?Delete
I'm also thinking...fancy going all the way to Inverness to see Ken Dodd... and then I'm thinking that it would probably be better than going to see the current lot. Isn't the pantomime season usually over by April?
But I'm also a bit bothered that I can't find any pictures of the theatre with standing room only... maybe they should have asked Doddy.
Ahhhh there you go...postal votes from people who don't live here and have never lived here... cool as polar bears.ReplyDelete
They never learn do they? THAT'S CHEATING. THAT'S WHY WE WANT THE UN TO RUN THE REFERENDUM, NOT THE SAME SIDE AS BETTER TOGETHER AND THE BBC.