In a week which made The Day After Tomorrow look like yesterday’s news, even those of us inured to the Scottish winter must have felt some sympathy with those in the south, whose misery will continue for several weeks to come. However, does that sympathy extend as far as Gideon George Osborne?
CURRENCY UNION AND THE PARTIALLY GASSED BADGER…
Coming like the first horseman of the Apocalypse, Chancellor Osborne ventured north this week to tell us that if we dare to vote Yes we can’t keep the pound.
This – straight from the Treasury horse’s mouth – is what he had to say. The 78-page Scotland Analysis: assessment of a sterling currency union paper on which his speech is based, is here.
Bagehot in The Economist thought the speech a good one – “with Mr Osborne exuding his usual sense of barely-suppressed triumphalism”. The case was strengthened, the blog maintains, by the decision to publish ‘dispassionate and devastating advice from Sir Nicholas Macpherson, his top Treasury mandarin – four reasons why sharing the currency should be ruled out…
[Incidentally, Paul Hutcheon in the Sunday Herald hinted at a potential conflict of interest with Mr Macpherson who is, Hutcheon claimed, in social contact with Better Together leader Alistair Darling “from time to time”. In other words, was Sir Nicholas’s advice strictly impartial, or was Mr Darling working in the background?]
This is the First Minister’s response in the Sunday Times [£]. Mr Salmond says what the Chancellor says now and what the Treasury will be saying on September 19th are two different things. “The Chancellor has to wake up to the fact that he cannot unilaterally grab assets in which Scotland has a share-such as the Bank of England-and then still expect an independent Scotland to carry a share of UK liabilities… the overriding feeling is of a Westminster establishment lashing out as it realises it is losing the argument…”
Yesterday he spoke to Business for Scotland in Aberdeen, rebutting Osborne’s argument about currency union, and publishing Scottish Government analysis of the cost to rUK of Scotland having a separate currency. BBC political correspondent Brian Taylor comments that Mr Salmond was addressing a wider audience than those sitting in front of him - “to win this referendum, the first minister knows he has to convince the sceptical, the fretful, the anxious, the uncertain, the disquieted. Those who gaze upon the independence project and mutter: "Aye, but . . ."
Even former first minister Henry McLeish claimed Mr Osborne’s speech was “more about street-fighting than statesmanship”.
On the other hand, Alan Cochrane in his Valentine’s Day Telegraph column did not disappoint, calling the First Minister’s response ‘peevish’ and looking forward to a ‘weekend of whingeing’ from the Nats…
SO HERE’S THE ‘WHINGEING’ COMMENTARIAT…
Kevin McKenna in the Observer sends the Chancellor a broadside well worth the read, no matter what side of the fence you’re on. He says, in so many words, get the tanks off our lawn. Recalling January 31 1919, when tanks actually were sent onto Glasgow streets, representing “an overreaction to skirmishes about low pay and rent strikes by a government terrified it had a Bolshevist uprising on its hands”, McKenna thinks “George Osborne's attempt last Thursday to dictate currency law to Scotland was no less clumsy, even if the military hardware was missing. England's Tories are panicking again as the prospect of losing a quarter of their kingdom and with it their seat on the UN Security Council looms… Is a UK chancellor of the exchequer seriously asking us to believe that he is contemplating damaging the entire UK economy following a yes vote? Does he think English company bosses will accept the millions of pounds of extra costs that tariffs would entail, not to mention the downward tilt in the balance of payments without oil receipts?”
[In fact, as Graham Ruddick in Saturday’s Telegraph reported, British business is already concerned at the extra costs involved in independence, before we even consider the possibility of yet more uncertainty… and only on Thursday, Royal London, owner of Scottish Life and Scottish Provident said it would treat Scotland as it did other foreign countries if there were a Yes vote].
Another broadside from Iain McWhirter in the Sunday Herald: “Osborne deployed all the diplomatic subtlety of a British governor general talking down the leaders of an independence movement in an African colony. I hate to draw such antagonistic historical comparisons, but how else were people to take it, whichever side they vote on? This was a diktat - allowing no room for negotiation. Osborne was saying: don't think you can vote for self-government and expect England to co-operate. We will make you change money at the borders. You will be treated as aliens. We will disrupt trade rather than let you use the pound in Scotland” However, the Scottish Government cannot go on pretending that nothing has changed, he warns, even though they have “bent over backwards, sideways and upside down” to say they want economic continuity.
Jeremy Warner in Saturday’s Telegraph says he’s an avowed unionist – nonetheless he thinks “Alex Salmond is right to insist that Westminster is bluffing”. In the event, he says, there is no viable alternative to monetary union - “To deny Scots the pound is therefore to deny them independence. Once this fact sinks in, the bravado of last week’s threats could easily backfire. If Scots vote for independence, they have to be accommodated. London cannot honourably or constitutionally take any other course. It was for very good reason that Holyrood’s Fiscal Commission Working Group rejected all the other options in attempting to flesh out likely monetary arrangements for an independent Scotland; none of them would work…”
Sam Bowman of the Adam Smith Institute thinks it would be perfectly feasible for Scotland to unilaterally keep the pound - “Between 1716 and 1844, Scotland had one of the world’s most stable and robust banking systems. It had no central bank, no lender of last resort, and no bank bailouts. When banks did fail, it was shareholders who were liable for paying back depositors, not taxpayers. Scottish GDP per capita was less than half of England’s in 1750; by the end of the era in 1845 it was nearly the same. Now that George Osborne has ruled out a currency union if Scotland votes for independence, the Scots have an opportunity to return to this system more seamlessly than any other place in the world could”. All it means, Bowman says, is that the Bank of England would no longer consider Scottish interests (but would it anyway, given the difference in population?), nor would there be a lender of last resort. But, says Bowman, these strictures can lead to greater prudence and caution – he cites US research that show this applies to Latin American countries that use the dollar.
Ian Bell in Saturday’s Herald joined the George-bashing throng – “Mr Osborne… has no interest in being subtle. He even ignores the reviews earned by other Tory princelings from Scottish audiences. He intends to bludgeon us into timidity. All the declarations of affection offered by Prime Minister David Cameron just a few days back have been replaced by sour, miserly and insulting calculation. Expletives hang in the air. It is childish stuff. It is also a measure of how the intelligence of Scots is regarded in London anterooms. There are loan sharks with better manners and a better regard for the self-respect of voters in a democracy. What really troubles London? The debt, the oil, and the Trident toys. We have it in our gift to make life difficult indeed for the Westminster parties, and they know it. So they begin to play rough”.
Rod Liddle in the Sunday Times [£] – a Marmite columnist if ever there was one – says the Yes camp is shrugging off everything thrown at them, and it seems to be working- “it is easier to campaign for exciting radical change than it is to ask for the status quo… easier still when the leader of the no campaign closely resembles, both physically and in terms of his level of dynamism, a partially gassed badger…” Liddle says the tri-partite statement “Smacked of petulance and playground bullying… the experts insist that the referendum will be decided on economics … as a fully-qualified non-expert, I fundamentally disagree. It will be decided viscerally as referendums always are. It will be: do we wish to be tied forever to those people down there? Or should we tell them to stuff it?” Bullying, says Liddle, will make a no vote even less likely.
Robin Lustig in Sunday’s Huffington Post says Scots should watch the result of last week’s Swiss referendum with interest. “What happens next in Berne and Brussels”, says Lustig, “will depend on some very tough negotiations, accompanied by endless huffing and puffing, public posturing and dire threats. And that's exactly what will happen if Scotland votes Yes to independence on 18 September… the party with the greatest needs sits down at the negotiating table with the weakest hand. As all experienced negotiators know, a successful deal is one that both sides can present as being in their own interests. Every negotiator wants to be able to stand in front of the cameras and say: "We got what we wanted."
Alex Massie in the Spectator says Osborne is merely reminding Scotland where the power really lies. We can whine about bullying all we want, says Massie – “Because the obvious truth is that Scotland would have much more to lose from post-independence negotiations than would the rest of the UK. (Yes, yes, yes: oil and balance of payments and submarines. Not enough, old boy.) That is, the downside to negotiations going badly is vastly greater for Scotland than for the rump UK. Scotland’s position is relatively weaker.”
BE CAREFUL WHAT YOU WISH FOR…
And, as if one horseman of the apocalypse was not enough for one week, President of the EU Commission Jose Manuel Barroso has repeated his previous assertions that it will be ‘almost impossible’ for an independent Scotland to join the EU. Despite Scotland having been a member of the EU for 40 years, with all the legislation in place, it appears our chances are no higher than those of Kosovo. Mr Barroso then went on to assure us that he did not wish to interfere in the vote because “it is a matter for the Scottish and British people”. Quite.
This is John Swinney’s response to Andrew Neil on the BBC on Sunday, during which he also confirms that independence proposals do not include joining the Exchange Rate Mechanism, a pre-requisite for adopting the Euro.
Mark Wallace in yesterday’s Conservative Home warned the party’s Euro-sceptics that the arguments being used against Scottish independence are the same used by Brussels when it comes to that other, 2017, referendum. “It would be incredibly short-sighted”, he says, “not to realise the fact that the pro-EU lobby is, right now, compiling a list of all the things British unionists say to Scots in order to throw them back in our faces when the chance to leave the EU comes around”.
THE BEST, AND REST, OF THE INTERESTING STUFF…
It’s the bits in between that matter. Guido Fawkes has a little piece about Gordon Brown’s finances since leaving office; the amounts raised by his charity and the amounts spent on his office – and the difference between them. Here’s the video of the Daily Politics programme in which he reveals all…
Move over Shetland. There’s a new oil-rich kid on the block. Yesterday’s Daily Mail saw columnist Simon Heffer on a visit to the Falkland Islands along with Foreign Office minister Hugo Swire. The islands’ financial secretary has already been to Norway to discuss the setting up of a sovereign wealth fund. There are mixed feelings over the development that will be necessary to sustain exploration and servicing, but with the UK’s military force sufficient to deter an economically weakened Argentina from launching another expedition, Falklanders look likely to have won the lottery…
England expects, or the Auld Alliance lives… Thursday’s Independent had a little piece that affects us in Scotland – “Two centuries after the Battle of Trafalgar, the French government took the first of a series of decisions that led accidentally to its taxpayers subsidising two British aircraft carriers”
It appears that a pact between Jacques Chirac and Tony Blair in 2006 meant the French contributed a conservative £82m (and possibly double that) towards the financing of two British aircraft carriers. This ‘accidental contribution’ had been buried in the small print of the French defence estimates until resurrected by the auditors. Some red French defence faces due any day now then. And where are the carriers being built? On the Clyde of course.
The full story makes interesting reading – including the paper’s conclusion that the least the UK government can do would be to rename them. HMS Napoleon perhaps?
That’s the way the money goes… Scourge of bureaucrats and quango-crats everywhere, the TaxPayers’ Alliance celebrated its 10th anniversary this week with a new 2014 edition of its Bumper Book of Government Waste. According to the TPA, over £120billion of your money and mine was wasted in 2012-3 – enough, it says, to eliminate the deficit and cut 1p off the basic and higher rates of income tax. And you can see exactly where it goes– including £113,200,000 spent in just that one year by Scottish quangos on PR (£66.8m), consultancy fees (£40.2m), overseas travel (£3.7m) and hospitality (£2.5m). The TPA will continue its War on Waste campaign through the year. More power to its elbow.
At least Rome should be warmer. After a weekend free from pain, Scottish rugby followers (you know who you are) will be out again on Saturday. Some of us in private despair in front of the box, some on the (hopefully) sunny terraces of the Olympic stadium in the Eternal City. We say despair because those of us who watched Italy play France will know how good they have become – in inverse proportion to Scotland over the last few years. After the last debacle, most of the sporting press just laughed. At least the Daily Mail brought 12 former internationals together to see what might be done better, starting with the coach, the players, the fireworks and the SRU. What’s left? Oh yes, the nematodes…
If it doesn’t bring a smile to your face and gladden your heart, you need to get out more. Courtesy of our ex-pat Portugal correspondent, here’s a very happy Russian scene (something you don’t say every day!). One to try in George Square, perhaps?
Honey McBee is escaping from the hive next week - see you in March!