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Saturday, 28 January 2012

Why give the Unionists ammunition?

Alex Salmond is an arrogant sod, which is nae bad thing when leading a country. However, his arrogance can be a definite drawback if it leads him to treat the Scottish electorate with the type of disdain with which we have been treated for years, by the Unionists. When questioned about the SNP's decision to continue using sterling after "independence", he dismissed the question by claiming that the "Chancellor would bite the hand off us to continue to use the pound." He also claimed that 67 countries throughout the world shared their currency in exactly the same way. They do nothing of the kind and if Salmond did not know that, he should have been better advised by his advisers. But the man was a professional economist.

Now that the currency genie is out of the bottle - it has certainly taken the Unionists a heck of a long time to release it - it is not going to be returned. We are going to hear a great deal about it before the referendum because it has now been identified as one of the SNP's weak spots, and Salmond would do well to remember that peddling a series of half truths and in some cases, out and out lies, may be accepted by Nationalists but it is not going to be accepted by those Scots who have still to be convinced that independence would be good for them. We have been lied to for generations by the Westminster parties, about the true wealth of Scotland, about the size of tax revenues taken from Scotland, about the true level of expenditure in Scotland and the true value of the oil in the Scottish sector of the North Sea. We now know about the McCrone Report and how it was kept secret for thirty years, by successive governments, therefore the economic argument could be much more easily won than it was in earlier times.

The SNP has yet to explain why it intends to retain sterling after independence and simply pointing to the examples of Australia and Eire is not going to be sufficient. I could make a good argument for retainig the use of sterling as an interim measure in order to allay any fears over financial stability in the immediate aftermath of independence so why can't the SNP? The electorate is going to be very suspicious if the party continues to refuse to explain and will be outraged when it finds out that Salmond is so contemptious of them that he is prepared to lie about currency unions throughout the world, as an explanation of why the SNP intends to hold on to sterling. I use the word "lie" advisedly because to me it is inconceivable that Salmond would not have prepared an answer if he was asked about the currency, therefore either, he has been very badly advised or, he chose to lie.

It is perfectly true there are currency unions in other parts of the world, some of them, such as the countries in French Polynesia or old French African colonies, of many years standing. Then there are the more recent versions such as the eurozone but they are not all the same and they most definitely do not all follow the kind of relationship that would exist if Scotland retains sterling after voting to be independent. Currency unions can be informal where there is no common monetary policy but where the currency being used is the same and may even be pegged to another currency altogether. This is the kind of arrangement used in New Zealand and its dependent territories, where the New Zealand dollar is loosley pegged to the US dollar. India, Bhutan and Nepal have a similar arrangement with the rupee which is allowed a "managed float" against the US dollar.

That is a far cry from the system which prevails in the eurozone, where the arrangement is formal and the monetary policy followed is common to all member countries. The current crisis will ensure the level of control will be stepped up and the drive to control the Greek budget is being stepped up almost daily. Scotland has lived with the currency union that is the sterling area for years, we know how much control Scotland has had. Until the latest crisis, the SNP argued that we would have a seat on the governing committee of the European Central Bank (ECB), which would ensure that Scotland's interests would be safeguarded. What kind of dream world is that? Critics are now reminding the SNP that if an independent Scotland retains sterling, the Bank of England will simply ignore Scotland's interests - as if they were ever considered in the past.

That is the reason that Salmond's claim that the other currency unions are all the same is just so much nonsense. It is also the reason he is going to have to treat the Scottish electorate with a bit more respect, or pay the penalty.

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