Unionist Propaganda Surge 78


George Osborne is all over the media warning that an independent Scotland must follow Tory foreign policies if it wishes to stay in the pound. In fact the pound does not belong to the English – it was a new, shared currency created in 1707.

The problem of all liars is consistency. Keeping today’s lies straight with yesterday’s. My favourite bit of today’s attempt to bully the Scots is this:

“The UK government believes that a newly independent Scottish government would be required to formally commit to joining the euro as a condition of its EU membership”.

They seem to have forgotten their last big lie, which was that an independent Scotland would be kicked out of the EU and unable to join. Oh dear. They can’t both be true.

What is most amusing is the fact that an independent Scotland would, according to the official GERS report acknowledged by the Treasury, actually have a smaller fiscal deficit as a percentage of GDP than the current UK, so Osborne’s admonitions should better be addressed to the UK Chancellor of the Exchequer who is … err…

As for Osborne’s warnings that the oil price may be volatile (presumably along with the whisky price), I am happy to take our chances on that one. A commodity in finite supply for which demand continues steadily to increase seldom suffers devastating and permanent price plunges.


78 thoughts on “Unionist Propaganda Surge

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  • mike cobley

    I’m sure you would agree that dissenting Scots are not the only ones being bullied by this government. If that is the case, who should I be morally committed to helping?

  • Ed Davies

    Somehow it hadn’t occurred to me that Scotland would want continue to use the UK pound; beyond emotional issues, I’d have thought the main point of independence would be for Scotland to detach itself from the rump of the UK’s crazy short-sighted financial policies. I’d just assumed that either the euro would be used here or, if that wasn’t thought to be sensible, then a new Scottish pound.

    (He says, speaking as a quarter-Irish Englishman with a Welsh surname living in Scotland.)

  • Alex

    Craig, yes, I’ve noticed several such articles in the last few days. I’m not an economist, though my grandfather was (and a proud Scot/Labour (socialist) too, before he passed away a few weeks ago: Thomas Kennedy) So what’s the best outcome and also the most likely outcome?

    1. Keep the GBP?
    2. Join the Euro?
    3. Start a new currency? (pegged to GBP or not)?

  • Ken

    The Tories are getting tiresome, I agree, but surely the SNP are playing into their hands with this achingly long delay in the actual referendum?

    I can remember in the 1970s when the SNP said quite simply that if they ever got a majority of the seats then they would do as the Irish MP did in 1918 and simply declare their independence. The people would then be asked to ratify that in a plebiscite. The ball would then be in London’s court, and with more and more countries recognising Scotland, the idea was that London would be bounced into following suite.

    What changed? The SNP had a majority of the seats in the Scottish Parliament so could have put down a motion of independence, which the people would have then ratified, or not.

    I reckon Salmond will lose this one through his delays.

  • John Goss

    Alex, if you peg any new currency to the GBP you are in effect pegging to the dollar (same if you peg with the Euro). You need your own currency, something that’s stable. One day there will be a run on the banks which will bring down the whole monetary system as we know it. Whatever happens do not buy any US, UK or European government bonds. But if you do not have a central Rothschild bank you are joining countries like Iran and North Korea and may well become a target.

  • Anon

    I reckon Salmond will lose this one through his delays.

    I wonder if the ConDems will last through to the referendum. A UK General Election might be a spanner in the works.

  • Kempe

    Here we go again. Any attempt to point out the flaws in the SNP plans for independence is immediately shouted down as “unionist propaganda”. I suppose it’s easier than actually arguing the point.

    As outlined in “Your Scotland, Your Voice” SNP plans are to stay with Sterling until Scotland joins the Euro but, as has been pointed out before, any currency wishing to join the Euro has to spend at least two years in the Exchange Rate Mechanism Mk.2 (ERM II) first so how is that going to work?

  • Paul

    This entire argument is moot, what economy could survive a 10% haircut with no ill-effects? The rest of the UK needs to keep Scotland in a currency union as much as Scotland does.

    Also, this isn’t about Salmond, its about a yes or no to independence. We can accept he is the most high profile proponent but its not all about him. In terms of time scales, it’ll be what wins it, more people are beginning to see through BBC and mainstream press propaganda as time goes by. Even in the face of massive bias, take today’s headlines and all the interviews done over currency union on the telly as an example.

    Even with all that going on, polls indicate people are drifting away from a no vote toward a yes.

  • John K

    “In fact the pound does not belong to the English – it was a new, shared currency created in 1707”

    Oh dear, Craig. You need to read up on the history here.

    There was no new currency in 1707; Scotland simply adopted the English pound. The Scots pound (by then worth 12 to the English pound) *was* abolished by the Act of Union and the English pound (which dates back to before the Norman conquest) became the currency of the UK.

    The English currency was not withdrawn and reissued in 1707, as would happen with a new currency, but the pound Scots *was* withdrawn and the coinage gradually melted down (pre-1707 Scots coins are very rare), though the pound Scots continued to be used for accounting purposes well into the eighteenth century.

    This was done for a number of reasons, the most important being that (unlike the Scots pound, which had suffered very severe deflation over the years and had a chaotic coinage of varying denominations) the English coinage was hugely more widespread and very reliable and stable, having recently (1696/8) been entirely reissued to overcome the problems of worn and clipped coins. All the old English silver and probably a good deal of Scots coinage had already been bought up by the State, melted down and re-struck (at 5s8d a troy ounce, if anyone is interested).

    So while I agree that “the pound does not belong to the English”, it belongs to the whole of the UK since the Act of Union was over 300 years ago, you are factually incorrect here.

    More important than these historical facts, however, the question of the pound after the UK breaks up, should the people of Scotland vote for independence, is a genuine problem. An independent Scotland cannot simply pretend it isn’t an issue, and it won’t go away.

    I don’t know what the answer to the currency question is, it’s one of several issues where there are real difficulties including the EU membership one. But the SNP can’t just wish them away and assume whatever it wants to do will be accepted on its terms by other interested parties; real economics and hard politics will be in play. The UK Treasury are right to examine all the issues, and this may be a really tough nut to crack, even if the loathsome Osborne is playing to the gallery – so is Alex Salmond.

  • craig Post author

    John K

    From the Treaty of Union:

    “16 That from and after the Union, the Coin shall be of the same standard and value throughout the United Kingdom, as now in England, and a Mint shall be continued in Scotland, under the same Rules as the Mint in England, and the present Officers of the Mint continued, subject to such Regulations and Alterations as Her Majesty, Her Heirs or Successors, or the Parliament of Great Britain shall think fit.”

    The new coinage was adopted with the same weight and value as English coin, and minted in Scotland and England. Remember this was metal real value money not paper money. The Scottish coin was remelted and reissued but it was the same silver. That the weights and values of English coins were adopted is true; but it was no longer English coin; it was British coin, minted in both countries.

  • KT

    Pathetically, it seems that Salmond has agreed that he has agreed that the Queen will remain as head of state, and I guess whoever her successors are in perpetuity. If Scotland is going to go for independence, they should take the chance to make the break, and ditch the royal bloodsuckers once and for all. Nobody should be the “subjects” of the royal parasites. If true, this is pathetic cowardice by Salmond and the SNP.

  • John K

    Craig

    “The Coin shall be of the same standard and value throughout the United Kingdom, as now in England.”

    That just says what I said in more flowery terms. The Pound Scots was abolished and the English Pound became the currency of the UK. The Edinburgh mint melted down the Scots silver Merks, shillings, etc. and reissued them as English (now UK) coins, with an E on them to denote they were Edinburgh coins. Not sure what happened to the gold Pistoles minted from Darien gold but there can’t have been many of these.

    None of the English coinage was remelted, as it had recently been done and this wasn’t necessary. So there was no “new currency”, just a relatively small addition to the UK stock of silver sixpences, shillings and half crowns made from the old Scots coins.

    As an interesting sidenote, both the Bank of England (1694)and the Bank of Scotland (1696) had already been created by then and both had already issued some paper money, though at that time only in large denominations (£20 and above, a huge sum at the time) for the payment of business transactions.

  • Komodo

    I think Salmond (who is a gambling man, and not in a bad way) does well to delay until the Coa(lol)ition reaches the nadir of its popularity due to its abysmal governance.

    Re currencies in use just after and beyond the Norman Conquest – the credit card was alive and well until the power of printing money was delegated to the banks –

    http://unusualhistoricals.blogspot.co.uk/2010/10/money-matter-tally-stick-system.html

    Arguable that what you call the basic unit of a fiat debt-based currency is the least of your problems. Would it make any difference if the Scots used the Maria Theresa dollar? (still circulating and being minted in Africa, I believe)

  • John K

    Komodo

    Yes, you can still buy MT Thalers for 24.40 euros from the Austrian Mint’s website. They contain 23.4 grammes of silver so at the current silver price of $23 a troy ounce are not very good value as an investment.

    http://www.muenzeoesterreich.at/eng

  • Komodo

    That’s good, John K. Should the working currency represent yet another opportunity for loaded speculators to get even richer? And the actual value of a pound coin is…?

  • John K

    Komodo

    Ah, I wish I knew the answer to that, if there is one.

    I suppose “value” is like “earned” or “worth”, one of those words which can mean many things.

    On one level the “value” of a £1 coin is £1. On another, it’s probably less than a penny.

    A painting by Picasso might be “worth” £50 m. But if it turns out to be a fake even though no-one but an expert can tell the difference, it’s “worth” £50.

    A footballer or a banker might be paid £10m a year; but does he “earn” £10m?

    English is such a wonderful language…

  • Chienfou

    The discussion over whether the pound belonged to England or to Scotland in 17whatever is irrelevant.

    The pound now belongs to the United Kingdom and would logically continue to do so if Scotland were to leave the Union.

    There is no proposal for England to leave the Union so again the discussion as to whether England can keep the pound is irrelevant.

    Anyone who thinks a country can maintain its political independence without controlling its currency should pay attention to what is happening in Greece, Cyprus and Italy.

  • Komodo

    But “the country” doesn’t control our currency, Chienfou. The banks can print as much or as little as they want. Or, more accurately, they can create debt at will, and record this as a positive balance on their books. Wish I could…

  • Komodo

    I propose the standard egg as currency. Goes off if you don’t use it; input some work and you get a chicken. Very hard to forge and may be eaten in times of devaluation.

  • Dreoilin

    “input some work and you get a chicken”

    depending on where you got the egg. 😉

  • Paul

    In all of this, it seems to me, pro-union commentators are clamouring for absolutes and stupidly (I think) the SNP and Yes Scotland are attempting to give them.

    There are no absolutes in this, only likely-hoods and the same goes for remaining in the UK. No one can say with absolute certainty what will happen in a few months time politically under any circumstances.

    So, demanding absolutes and re-iterating questions which have been answered already (this issue was in the Scotsman 15 months ago and was done to death) is what passes for the positive case for the union.

    Also, any comparison being drawn between our situation and that of Greece, Cyprus etc are fatuous, that they’re tied to the same currency isn’t the root of their problems, its that their economies were geared up so differently.

  • Komodo

    The Chancellor of the Eggschequer will be responsible for ensuring that all freshly-minted eggs are viable, Dreoilin. Osbo’s broody eggspression is no accident…

    -you asked for that.

  • Chienfou

    Paul

    No one suggested that Scotland would end up like Greece or Cyprus (not even Osbourne as far as I am aware). But these are the clearest examples of how an independent economic policy is not an option to those countries in a currency union. If Scotland wants full independence from the United Kingdom they will eventually need to operate a separate currency.

  • Roderick Russell

    Mr. Osborne is by enlarge right in what he says. But why would an independent Scotland want to retain the pound anyway? The Pound will always be controlled by the City in their own banking interests, and have to support the huge overhang of English government debt and future deficits. What’s the point of independence if a much larger English economy controls your currency (and therefore your economy) as Mr. Osborne so correctly says? Besides to me one of the advantages of independence is getting away from the pound, as it has so much government debt attached to it that its future doesn’t look too rosy to me. It seems to me that it would be better policy to just set up a new currency backed by oil.

  • David Milligan - a very Sovereign Scot

    “STERLING STORM IN A TEACUP”

    As a Scot and a card carrying Scottish Nationalist, I can assure you that bits of paper with pretty pictures on don’t have any emotional attachment for me. Would it matter at all if the Scottish banks that have the ability couldn’t print Scottish notes? Of course not. All that matters to me is that the notes that I keep in my pocket can buy me what they’re supposed to.

    I have listened to the Westminster “machine” firing up to take the high ground on this part of the debate. We are told that the rUK (rest of the UK) wouldn’t want to enter into any currency union with an independent Scotland.

    This is something that I as a pro-independence supporter and promoter am completely at ease with. Please let me explain.

    Scotland is an exporting nation and England is an importing nation. The two balance out so that the balance of payments are kept relatively stable.

    Sterling benefits from that as a balance of payments that was negative would cause necessary devaluation of the pound to boost exports and subsequent inflation as the cost of everything imported would shoot up in price.

    Now lets look at both scenarios that are possible;-

    Scenario A: (Scotland sets up it’s own currency) – The rUK would have to manage a devaluation in stages to boost exports but that would feed inflation as goods bought from abroad would cost more. Scotland would also have a currency that would predictably become very hard and it’s value would rise and cause problems with exports due to a high price for the currency. Imports to Scotland would be cheaper of course but it’s not an ideal situation. Scotland would have to consider giving trading loans to countries that we wished to sell to. Other countries do it but sometimes the loans go bad.

    Scenario B: (Scotland uses Sterling in a currency union with the rUK) – This deals with problems on both sides quite nicely as the rUK would benefit (the same as before independence) from Scottish export sales to keep Sterling stable. Having a stable currency would benefit Scotland as it could get on without having to worry about a currency becoming too hard. This would keep the cost of imports and exports for both the rUK and Scotland on a stable footing so both would benefit.

    I’m a pragmatist, and look at the bluster that’s being produced right now as temporary until the people of Scotland vote to regain their independence. Once that happens, common sense will kick in and both sides will come to the negotiating table because they’ll want to.

    Because both sides will benefit from a currency union, I’m sure that the negotiations will be sensible and provide Scotland with terms that are favourable and takes away the temptation to form our own currency which of course would be our choice if the terms became unworkable in the future. The obvious fact that borrowing would have to be agreed on both sides – by both sides is largely a given and we would agree the rUK’s and they would agree ours. This would give Scotland the setup needed to progress as a nation.

    I hope this helps everyone. Just think it through yourselves and you’ll come to the same conclusion as me. It’s not rocket science you know, it’s just people like George Osborne, Danny Alexander and Alistair Darling trying to make it seem that way. They’re just not telling us the whole story, that’s the problem.

    Have a nice day folks.

    Kindest regards,

    David Milligan – a very Sovereign Scot.

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