Scotland's Vote 12: Castles in the Air

This is a follow-up to my previous post on the SNP and the currency issue. It looks at the SNP's claim that the rest of the UK (rUK) will accede to their demands; and statements from the SNP in the last few days.

An Offer You Can't Refuse

The SNP claim rUK will have no choice but to agree to a sterling union, for two reasons. The first is increased transaction costs between Scotland and rUK. On the SNP's own figures, these would amount to £500 million per year. This is 0.04% of GDP for rUK.

The second is the SNP plan to refuse to take on any of the UK national debt if rUK does not agree to a currency union.

Let us be clear: This is a deliberate policy choice by the SNP. It is entirely possible for a Scotland with its own currency to take on a proportionate share of UK debt, but the SNP have decided to rule this out unless rUK agrees to a sterling union. 

The SNP's figure for Scotland's share of UK debt interest is £5 billion per year. So, the SNP are threatening rUK with a financial penalty amounting to less than 0.5% of GDP, or about 1% of the rUK government budget. In SNP rhetoric, this will eclipse any other considerations. It is meant to bring the imperial British state to its knees and force it to accept whatever the SNP demands.

The difference is, refusing Don Vito's offer would leave you unable to make decisions ever again.
Source: www.pinterest.com

This is optimistic, bordering on delusional. The rest of the UK is perfectly capable of absorbing these costs. It would be prudent to take the Conservatives, Labour, and Liberal Democrats seriously when they say they will not agree to a currency union. They have reiterated their position again and again in recent days.

Scotland's Vote 11: Childish Reasoning

In recent days, Alex Salmond has reiterated his claim that Scotland and the rest of the UK (rUK) will retain a monetary union after Scottish independence:

It's Scotland's pound and we are keeping it.

It is entirely possible the rUK government will refuse its consent for such an arrangement. All three main UK political parties have said very clearly they will do just that. Salmond himself has tacitly recognised this, because he has threatened retaliation in the form of refusal to take on a share of the UK national debt.

Edinburgh Castle belongs to the people of Scotland.
Can the same really be said for a negotiated agreement between Scotland and the rest of the UK?

Let us suppose the UK government is not bluffing; and it regards increased transaction costs between rUK and Scotland, and taking on the entire UK national debt, as a price it is willing to pay. In this case, what is the SNP's preferred fallback option? Absolutely no one in the SNP is willing to say.

Cute Cat Friday 2014-08-08: Dexter

Enjoying a shady place on a hot summer day.

Scotland's Vote 10: Losing the Jackpot

The UK government recently published a snappy article containing "10 Myths and 10 Facts" about Scottish independence, and I considered writing a detailed breakdown.

I have not done this for two reasons. First, doing it properly would require a lot of work dissecting the financial claims and counter-claims; I don't have the time and others have already been over that ground. Second, I was brought up short by "myth" number 2:

Myth: We’ll still play the National Lottery and share much-loved national institutions with the UK.
Fact: It’s called the National Lottery – not the International Lottery. You can’t buy a ticket in France, so why would it run in an independent Scotland?

What in Loki's name is this? How did it get into the list? Why?

Scotland's Vote 9: Programming Notes

I cannot give a timely response to the Salmond/Darling debate, because I am visiting family seven time zones away from the UK. Instead, I am writing this a few days before the event.

I'm going to go out on a limb here, and predict that the debate consisted of two middle aged men in suits. It covered talking points which they have rehearsed ad nauseam for months if not years, and it did not change many hearts or minds.

If the debate degenerated into hand-to-hand combat, ending with one participant triumphantly holding aloft the severed head of his opponent, I will have to admit I was wrong.

Either way, a post on an older referendum story will appear tomorrow and you may find it interesting.

Vacation notice

I am visiting my ancestral homeland in Canada for the next couple of weeks, so blogging will be a little light.

Fear not, Cute Cat Friday will remain on schedule. I might be late with social media posting, but the feline photos will go up automatically at noon on Fridays. I will also schedule a couple of midweek posts on non-cat-related matters.

Speaking of social media, my Twitter handle is @iainrobertsblog -- follow me for notification of posts and occasional other tweetings.

Cute Cat Friday 2014-08-01: Belle

Belle is bored and considering her next move.