Published on 29 Jan 2014

Dependent independence? Carney’s warning for Scotland

The governor of the Bank of England has warned that an independent Scotland would have to “carefully consider” relations with the rest of UK in order to “sustain a banking system whose collective balance sheet is substantially larger than its GDP”.

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In a “technocratic assessment” to Scottish business leaders Mark Carney was careful to be diplomatic, making no judgement on whether Scotland would be better or worse off if independent. But the speech pointedly contained a table comparing the size of Scotland’s banking sector unfavourably with Ireland, Iceland, Cyprus,  and Spain.

In all these places, a bankrupt banking system too big for the host country led to the need for a national bailout. These countries had a banking system of between three and seven times the size of their GDP. Scotland’s banking system is 12 times the size of its GDP.

Mr Carney pointed out the “dangers” and “difficulties” in the eurozone of not having arrangements to share banking risks.

The governor said there were “potentially large costs” to giving up an independent monetary policy, though the SNP argue that this will not happen. His main focus was to point that the Scottish government’s preferred option: a sterling area between two sovereign states, would require it to learn the lessons of the Eurozone crisis in advance.

He suggests that an independent Scotland would have to immediately reshare fiscal risks, and cede sovereignty back to Westminster. So what sort of independence would it be? The same independence Belgium has for Holland? Or the same dependence Spain has on Germany?

The challenges of making a sterling area function are surmountable. The question arising from the governor’s speech is why the rest of the UK would acquiesce in a very favourable negotiation in favour of Scotland. More to come.

Follow @faisalislam on Twitter.

33 reader comments

  1. Paul Bethune says:

    “The question arising from the governor’s speech is why the rest of the UK would acquiesce in a very favourable negotiation in favour of Scotland.”

    There is the issue of the projected £1.5 trillion public debt that a Westminster government will not want to be fully saddled with after losing 10% of its economy. Playing hard ball with the currency, by not agreeing a revision of who sits on the Monetary Policy Committee – would give a Scottish government no obligation to accept a proportionate share of that national debt.

    Also Faisal, a time-frame for rUK to address the fiscal imbalance of losing over £150 billion in transactions of Sterling from the Scottish economy will need to be implemented. Do you believe 18 months after September 2014 will be long enough for Westminster to address this fiscal black hole without it adversely accelerating the devaluation of Sterling?

  2. AnneDon says:

    “Scotland’s banking system is 12 times the size of its GDP”

    I’m not clear how you defined “Scotland’s” banking system? Our banks are now internationally traded plc’s. During the banking crisis, the bail-outs were paid for by the authorities of the “area of contagion”, and, for instance, less than 10% of RBS business was in Scotland. The US paid more to the RBS bail-out than the UK.

    1. Andrew Dundas says:

      Hello AnneDon,
      RBS is registered at 36 St Andrew’s Square in Edinburgh. [Every time I walk past it I recall that it is otherwise named Dundas House …].

      RBS used to proclaim that it had become the largest bank in the world. That is, until the auditors discovered RBS had lent money and bought assets that weren’t worth what they said-on-the-tin. Oh dear!

      It is, therefore, a Scottish Bank. Every Scots would have to bail RBS out were it ever to get into difficulties again. And as the whole UK had to in 2008. If RBS (or any other Scottish institution) actually were allowed to go bust, it would be unable to release funds to customers and counter-parties (depositors etc). We’d all be bust too!

      It would be the Darein scheme all over again – but many times worse. http://en.wikipedia.org/wiki/History_of_Scotland#Failure_of_Darien_scheme

      How would you like to be responsible for debts equal to 12 times your annual income? That’s what we’re being warned about.

      1. AnneDon says:

        Hello Andrew Dundas,

        It says much for the woeful bias of the mainstream media in Scotland – and the UK – that Alastair Darling has been allowed to peddle the myth of Scotland not being able to bail out the banks if we were independent.

        The banks were bailed out by the those responsible for regulating the “area of contagion”. In the case of RBS, this was London and New York. This is why the Fed paid as much for RBS’ losses as the Bank of England. This is also why the Fed paid for Barclays’ losses – a subject we don’t hear quite so much about.

        If Alastair Darling doesn’t know this, it certainly says much about his competence as Chancellor. If he does, he has lied his way through this independence debate since Day 1. And either way, the mainstream media have allowed him – and the rest of the NO campaign – to make this assertion repeatedly in the campaign. Again, because either journalists haven’t bothered to find out the truth for themselves, or they too know the truth, but are unconcerned with broadcasting it to the British – and Scottish – people.

        And Darien getting a mention again? Really?

      2. Andrew Dundas says:

        Nothing here to support your contention that Barclays was bailed out or assisted by the Fed.
        There is no US record of any Fed Aid paid to Barclays.
        Barclays sold a fresh issue of shares to Sheikh Mansour, a member of Abu Dhabi’s ruling family who also owns Manchester City football club.
        Barclays subsequently bought Lehman Bros from the US TARP holdings. Lehman has proved to be a valuable buy.

  3. Andrew Dundas says:

    Panama & Hong Kong use the US$. And by the same logic, Scotland could use the Pound.

    BUT. (there’s always a but) we couldn’t continue with Scottish Bank notes that Scots like. Moreover, Scotland’s high dependency on trade with England links our trade policies together.

    And our monetary policy would be in the hands of the BoE’s Monetary Policy Committee and the tax-and-spend ratios of the remainder of the UK. So, no change there then …

    Which is NOT want Scots are expecting from “independence”. Nor was it ever possible with Jim Sillars dreams of a Socialist State in Scotland.

  4. Gregory Munson says:

    Perhaps Scotland would like to bankroll RBS. Whatever the result of the Scottish referendum the rest of the Union hasn’t been polled so this is a disgrace.

    1. Andrew Dundas says:

      Well said Gregory Munson!

      There very many important uncertainties (and risks) in the SNP’s tax-funded manifesto. The SNP – for it is that Party not the Scottish Government that’s written these 648 pages of waffle – will not be able to get agreement.

      So. They’ll have to be a further referendum in Scotland to see if folks will accept the reduced autonomies that will be offered by EU, IMF, NATO, WTO and UK partners. And I doubt if Westminster would be willing to ask you and others to agree to any extra liabilities without a referendum in England, N Ireland and Wales.

      This issue will be annoying lots of folks for a good many years yet.

    2. AnneDon says:

      Are you seriously suggesting that Russia should have been polled when Latvia, Estonia and Lithuania wanted independence? That China should be polled over whether Tibet should be free?

      The UN has rules on the conduct of independence polls, and these are easily available to read online.

      I suggest you do so.

      You might also consult what Westminster’s Sovereignty means at the same time.

      It means that the party which commands support in the House of Commons is free to do whatever it likes.

      The British people are NEVER consulted – one reason why I will be voting Yes in September.

      1. Andrew Dundas says:

        Hello AnneDon,
        You asked: “Are you seriously suggesting that Russia should have been polled when Latvia, Estonia and Lithuania wanted independence?”

        No! Not at all. None of those nations wanted to remain part of any Rouble currency union and insist that the Russian Federation should be liable for their debts. Nor did they demand to be protected by the Red Army.

        What I’m observing is that the rest of the UK population are entitled to be polled on whether they want the sweetheart terms the SNP manifesto says will be agreed.

  5. Gareth says:

    What has happened to Channel 4 News, champion of progressive politics, women’s rights and minorities? Yet when this small corner decides the status quo has failed us once too often, you turn into frothing bigots, just like every other tabloid hack. Is it so threatening to your world view, Matt, Faisal, for us to think we can do without London?
    I realise now that your program is just the Bono, or Morrissey, of journalism, ever ready to be photographed standing next to a victim, or frowning at the PM, but in the end it’s all just marketing.

    1. Andrew Dundas says:

      Hello Gareth,
      [C4 is entitled to report as they find, and Faisal may comment as he wishes too. The UK is a free speech State.]

      Having said that, Page 3 of the SNP’s manifesto (which doc we’re both paying for) emphasises this point:

      * we will control our own resources and make our own decisions about our economy

      Mark Carney has kindly reminded us that States within a currency union do not make their own decisions about their economies. He goes on to remind us that the Eurozone is suffering because their members supposed that they would each make their own decisions about their economies. The Governor then added that the Eurozone was attempting to agree how they could make mutual decisions in future.
      He offers the illustrations of currency unions that work: the USA & Canada. Each of those is also a banking and a political union. [I’ll add Australia, Jersey and the Russian Federation].

      So. There we have it: sharing the Pound will mean we will not have autonomy over our economy. And Faisal’s probably also correct about Scottish banknotes too.

      1. Gareth says:

        I was decrying how Channel 4 seem to have lost their values and resorted to a knee-jerk Daily Mail stance on the topic of Scottish independence. Nothing to do with free speech, just deep disappointment with a group of journalists I previously held in higher esteem.

        As for ceding sovereignty, well, right now we have very little, whereas under the proposed system we would have to co-operate with our neighbours, like every other country. C4, Better Together and the Westminster bubble may share UKIP’s obsession with isolationism, but we do not. Anyway, if you want a more considered view on how Mr Carney’s talks went, try reading this:
        http://www.businessforscotland.co.uk/carney-visit-adds-to-good-week-for-yes-scotland/

      2. Andrew Dundas says:

        The proposition is that the remainder of the UK will readily agree to an open-ended currency union with our Scotland without the concurrent banking and policy union. The SNP manifesto asserts that Scotland should be allowed both a currency union AND have a different economic policy.
        As Mark Carney has politely reminded us, such an arrangement is not likely to work. Largely demonstrated by no such arrangements working anywhere else.
        He went on to describe the USA, Canada and Australia as examples of workable currency unions. He pointed out that the Eurozone is having great difficulties because it is an incomplete currency union: there’s no mutual bail-out provision or monetary governance. [he didn’t say it, but the Maastricht Treaty rules aren’t working – and that’s the problem].
        Just because Faisal and I are explaining in our quite different ways, that a brand new Scottish State would not be able to form a currency union with the rump UK, nor issue any more Scottish pound notes, does not mean that we’ve lost our objectivity.
        One of our real difficulties is that our financial services sector is vast: liabilities 12 times the size of our GDP and a workforce of 400+k.
        Our bankers have a track-record of making rash investments. The RBS’s decisions to join a consortium bid for ABN Amro (and without checking ABN’s liabilities) and to cheat customers on a large scale, were each made by the Scottish Board. The UK government had to bail them out, or risk a collapse of the whole UK economy. That was a salutary warning to all of us.
        All through its preposterous manifesto, the SNP assumes our counter-parties will just rollover and agree to all sorts of very expensive concessions. Why on earth should the rump UK guarantee our debts? Of course all these refusals are going to be a disappointing process for a minority of Scots. But that’s what the SNP manifesto is offering us.

      3. Gareth says:

        It’s interesting that people talk about the value of Scottish banks being 12 times Scotland’s GDP, as if they have been operating solely in Scotland, or answer to regulatory bodies based in Scotland. Reminds me of what sports commentators are always accused of stating: when our athletes win, they are British, when they lose, they are Scots. In fact, given the relative strengths & diversities of our economies, and Westminster’s sudden desperation to hold onto us (after all these years of claiming we’re somehow supported by the rest) you have to ask who is being asked to guarantee who’s debts?
        Meanwhile, people have been claiming Mark Carney said so many things, the talks must have lasted a week. At least the interchange with journalists as he left can be confirmed –

        Faisal Islam: “Is it the case that you feel that an independent Scotland would be too small to host giant universal banks like RBS?”
        Mr Carney: “That’s clearly not what we said”

        Richard Edgar: “you seemed to indicate agreeing [a currency union] will be very difficult”
        Mr Carney: “I didn’t”

      4. Andrew Dundas says:

        It’s worth helping Gareth’s understand, that the worldwide banking accord is that each bank is responsible for its own liabilities wherever they are held. Each home State is responsible for all the liabilities their banks incur.
        The BoE reports in Carney’s speech [http://www.bankofengland.co.uk/publications/Documents/speeches/2014/speech706.pdf] that Scotland’s banking sector is 12.5 times our national income. That compares with 4.3 times for the rUK, and 1.2 times for the USA’s banking liabilities. The Governor declined to comment on what that size of Scotland’s liabilities implied.
        All the fatal decisions leading to the 2008 crises and since were made in secret by the directors of Scottish registered banks. Their bail-outs were paid for by HM Treasury in exchange for new shares issued by the two banks.

      5. Gareth says:

        “All the fatal decisions leading to the 2008 crises and since were made in secret by the directors of Scottish registered banks”

        Those nasty Scots and their ‘secrets’. Fortunately, no bank anywhere else in the world had any problems, the US didn’t pay to bail out UK institutions, Iceland didn’t say simply “No” and take no liability… It’s the stuff of fantasy, I’m afraid.

      6. Andrew Dundas says:

        Hello Gareth, nice to hear from you.
        There’s nothing sinister implied by my observation that the decisions by BoS and RBS were taken in secret – all company board decisions are taken in secret. Which is why nobody else in Edinburgh or anywhere else could have intervened. The responsibility for those fatal investment decisions are not the responsibility of anyone but the directors of those banks. Their shareholders have lost billions too. Tough! they should kick their directors!
        Were Scotland to become a brand new State, we’d have to pick up the tab for our own Banks’ liabilities, just as Iceland is having to. Eire received low-interest loans from both the EU and the UK (£6 billions from all of us) and because Eire had taken care to not renege on loans as Salmond is now threatening to do. Pity. Scotland doesn’t deserve to be given a bad reputation by intemperate SNP leadership.
        There is a way out of this. If our biggest banks were registered in London, with only subsidiaries in Edinburgh, their massive potential liabilities would lie in London. Is that what you want?

      7. Gareth says:

        If the banks continue much as they did pre-2008, as they seem minded to and as Westminster seems hell-bent on allowing them to, then let London have them.

        Ordinary staff at HBOS, who had their life-savings invested in employee sharesave -type schemes, saw the lot wiped out. By that I mean low-paid cashiers, tellers, call-centre personnel and so on. These are the people who bore the brunt of the public wrath and in return they were laid off in droves. The directors couldn’t even be trusted to look after their own front-line employees; why we should be in any way keen to keep them in the country, I don’t know. They should be treated with the same shame & contempt as drink-drivers, made aware that their behaviour is socially unacceptable, and stripped of the proceeds of their actions. They might leave? Boo hoo.

  6. Paul Bethune says:

    Andrew Dundas

    You are wrong to say “the worldwide banking accord is that each bank is responsible for its own liabilities wherever they are held. Each home State is responsible for all the liabilities their banks incur.”

    The reason being, and not so long ago, the international precedent was for each state to bail out the liabilities of any bank within their regulated area, regardless of where that banks corporate headquaters were based. The US federal reserve bailed out RBS liabilities in the American financial regulated area i.e the United States.

    Any future bail out of the banks would be based on past precendent. The precedent has been set. A Scottish Government would only be liable for the bail out of its regulated area i.e Scotland.

    1. Andrew Dundas says:

      Hello Paul,
      I’m in the USA as I write.
      The US bail-out program was called the Troubled Asset Relief Programme which was set up by Hank Paulson and approved by Congress to buy up the dodgy loans that had gotten US Banks into trouble. Several of the Banks – Wachovia, Bear Stearns, Lehman Bros and the AIG were bankrupt and bought-out by other banks. Dozens of smaller banks went down as the credit crunch ran through the real estate markets. Their businesses were “eaten” by bigger banks, as is the way here. And would happen to Scotland if we allowed our banks to wobble.
      No Fed monies were paid to bail-out RBS or its US subsidiaries. None was authorised by Congress or the US Treasury. [Don’t cry for Iceland either – they tried to wriggle out of their responsibilities following their swaggering risk-laden boasts…]

      1. Paul Bethune says:

        Sorry Andrew, but you’re really uninformed if you believe the RBS Group did not recieve a financial bailout from the US Federal Reserve.

      2. Andrew Dundas says:

        Understood Paul. Where’s your evidence or details about that bail-out you say RBS received?

      3. RH Omea says:

        I find it very interesting that Andrew will continue asking the same questions that can be answered in 30 seconds of self-guided research. I respectfully submit that before arguing the same point repeatedly, one take the 30 seconds to assure oneself that they are not just being obtuse.

        There is a wealth of hard evidence that the US Federal Reserve bailed out a dozen major overseas banks (including several UK banks that would have collapsed in the crisis) to the tune of approx 9 TRILLION USD. here are the major UK banks in question:
        Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
        Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
        Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
        The US GAO report lays it all out here:
        http://bit.ly/1fT5vZK

      4. Andrew Dundas says:

        Hello Paul, I’ve searched for some clue as to why you are mistaken. Here it is.
        There was NO Fed Reserve bailout of RBS or its subsidiaries.
        What the British media misreported in 2010 was about the Fed’s overnight loan facility brought in following the closure of the cross-Atlantic interbank loan market. The Fed says: “The facility was announced on March 16, 2008 (ie, way before the Wall St crash), and was closed on February 1, 2010. All loans extended under this facility were repaid in full, with interest, in accordance with the terms of the facility”. You may recall that the Wall St crash & UK Bank share purchases were in October 2008.
        I much prefer to rely on the US Fed and the BoE’s assessments than those of “Business for Scotland”.
        Further detail can be found at: http://www.federalreserve.gov/newsevents/reform_pdcf.htm

      5. Paul Bethune says:

        Hi Andrew

        We seem to be reading the same financial package differently. Forgive me if I am wrong but my perception seems to be that you believe the $1.2 trillion of public money the US Federal Reserve gave to prop up all the major institutions on Wall Street, including around 15 non-US financial institutions – of which RBS received the largest at $84.5 billion – was not a bail out. (RBS received their bailout overnight on 01/10/2008 – right bang in the middle of the global financial meltdown).

        This information would never have seen the light of day had it not been for the Dodd-Frank Wall Street Reform Act that was nudged through the US congress.

        Also it’s interesting you don’t see all this public money being given to massive financial conglomerates at the peak of their meltdown as not a bailout. The public money given to RBS by the UK Government had the same conditions attached as the bailout the US Federal reserve gave: That all monies would be repaid in full. So if the UK government’s actions are perceived as a bailout – and most other central banks followed the UK precedent – then surely the US money to these companies would be seen in the same light.

        I don’t need to rely on BfS, Bloomberg covered the story pretty well.

        http://www.bloomberg.com/data-visualization/federal-reserve-emergency-lending/#/overview/?sort=nomPeakValue&group=none&view=peak&position=0&comparelist=Royal_Bank_of_Scotland_Group_PLC&search=

      6. Andrew Dundas says:

        In response to your latest, Paul:
        So we’re agreed about this minor matter: the Fed does routinely provide short-term funds for US Banks in exchange for collateral and mostly on a confidential basis for fear of eroding the borrowers’ credit standing. The Citizens Group is a US bank. But that didn’t mean the UK government wasn’t obliged to bail-out both of those Scottish banks.
        Perhaps we can also agree that the UK government owns 85% of RBS shares and – through Lloyds Group shares – is effectively owner of the bankrupt BoS too?
        Were those banks to return to market as Scottish owned and registered companies, then a brand new Scottish Government would assume the liability for protecting their depositors’ savings.
        As Carney observed, that’s a potential liability of 12.5 times the annual income of all Scotland. Which is more than twice the liabilities of Iceland and Ireland that have near bankrupted those countries. They’re both in hock to the UK as well as the IMF and others who both provided conditional loans to bail-out those Nations.
        To avoid that contingent liability on the Scottish people, I recommend (in the event that Scotland becomes brand new) that those “Big Two” and other banks and secondary credit providers should each be re-registered as rUK companies. Leaving the onerous duty of bailing out those banks and their depositors and counter-parties to the rUK.

      7. Paul Bethune says:

        Hi Andrew

        As I am sure you are aware, the Fed does provide short term loans to US based companies a lot. What they do not do however is release $1.2 trillion on a regular basis. And actually, the Citizens Group is a US BASED bank owned by RBS and the money given to the bank coincided with the global financial meltdown – not before or after as you tried to suggest.

        Funnily enough Andrew, both Iceland and Ireland have recovered from the recession and their economies are both outperforming the UK on various economic indicators. Iceland did the right thing, and refused to back the finanical sharks (those shadowy investors) that the UK Government accepted to do.

        In the event of independence Andrew there is a lot of negotiation to be made. Assets such as currency will have to come hand in hand with liabilities such as ownership of the 2 failed banks. A failure to agree on one will lead to a failure to agree on the other. It is for Westminster to negotiate with a Scottish government on the distribution of public debt, of which some of that will be a consequence of the bailouts.

        It is also fatuous and highly vexatious to attempt to plug the size of Scotland’s 2 largest banks with the size of Scotland’s economy – a new tactic I’ve observed unionists try in an effort to derail the normalisation of a sovereign Scotland. These 2 banks are/were international conglomerates. Their market share is global and not limited to the confines of Scotland. Hence the reason why the US bailed out RBS among others.

  7. Mike Harland says:

    Actually the most important point coming out of Carney’s witterings was that banks would no longer be bailed out by the taxpayers, but that ‘shareholders’ and ‘creditors’ would be responsible in future; i.e. it would be a ‘bail-in’ instead, just as happened in Cyprus and which led the EU policy advocated straight after.

    One has to be a linguist nowadays to understand what words really mean in the mouths of our officials of the state: in the case of the Coop both ‘shareholders’ and ‘creditors’ are in fact the ‘account holders’; in the case of a bank like RBS, then anybody with an account is a creditor, since when you place your money in a bank ‘your’ money legally becomes ‘their’ money and you are suddenly therefore a ‘creditor’. So Carney’s circuitous little speech, which was meant to be so ‘neutral’, was actually a sign of things to come whether we’re in Europe or the UK.

    The truth is that no matter what comes out of London it is either negative or a non-statement; we get no facts and no straight talk; we certainly get no inkling as to why England is so desperate to hang on to Scotland, mainly as it is so blindingly clear (I too can play the teasing game!).

    As an Englishman living in Scotland for over 30 years, I couldn’t care less what the London Bubble government have to say; the NE of England where I came from has got nothing from London in 40 years and is still a basket case; Scotland has continually been used as a guinea-pig for endless dimwit schemes like the poll tax and left to clear up the mess; so I don’t expect anything better for Scotland in the future, especially as Crash2 is scheduled for May this year.

    No, I am going to vote Yes for Scotland on the sheer principle that self-determination is the people’s right IF THEY WISH IT and for the sake of my children and grandchildren, which is the whole point of Independence.

    1. Andrew Dundas says:

      Problem is Mike, what should any government do when told by a massive bank like RBS or BoS that they’re bust and will close all customer accounts with immediate effect? (No access to wages…).
      No good saying “let the shareholders bail-them-out”. Would your pension fund manager earn promotion by pouring even more of your savings into a bankrupt bank? I don’t think so.
      Every government (and its taxpayers) is the lender of last resort for the very big banks that go bust: there’s simply no one else!
      The UK Government stepped in to rescue the sillies who’d deposited their savings in Icelandic Banks when the Iceland government couldn’t. Our government followed up by seizing Icelandic assets in the UK as collateral. You’re surely not proposing these sorts of quarrels in future. Or maybe the SNP are wanting to provoke such quarrels?

  8. Andrew Dundas says:

    Paul, the SNP have uttered a series of ‘calculated inexactitudes’ in its taxpayer financed Manifesto. There is no scope for 58 million customers of Scotland ceding any monetary control to 5 million wannabe foreigners.
    Neither Ireland nor Iceland are back where they thought they were before they went bankrupt. They both still owe big money to the UK, the ECB, Holland and others. They will have to re-pay those debts from their welcome growths. Because their creditors don’t need either of them anything like as much as Ireland & Iceland needs them and the EU. Gosh, Paul, it’s a tough life being a small nation!
    All of the other Celtic Tigers are stalled – including even Norway – and we all hope they recover so that the two I’s can find the cash to pay their debts.
    The Scottish public are beginning to understand that most of the solemn promises made in the SNP manifesto are deceptive: the rUK will not agree to any joint currency union and the UK government will sell off the two Scottish Banks and will pocket those proceeds. There’s no need for any agreement on either.
    However, just as Jersey uses Sterling notes and coins (like Luxembourg, Jersey has its own currency that it doesn’t use much) there’s no reason why Scotland can’t use Sterling as if it were its own currency. Panama uses the Dollar instead of its own money and is the fastest growing economy in Latin America.
    Like nearly all small States, a brand new Scotland will have to look-to its credit ratings. Any further suggestion of the sort of child like threats Salmond gave to the FT will cost the Scottish people dearly in higher risk premium on our borrowings. We should remind ourselves: London is our whisky industry’s biggest sales point. Insulting their intelligence is fraught with risk .

    1. Paul Bethune says:

      Hi Andrew

      As you have glossed over your original point of attack about Governments bailing out their own banks – which was completely wrong – you accept that an independent Scotland is not in the dire financial straights you have attempted and failed to paint it as.

      “The Scottish public are beginning to understand that most of the solemn promises made in the SNP manifesto are deceptive”

      Care to name these promises you believe are deceptive. I’ve already proved you to be deceptive, especially with your painting of Scotland’s financial sector and the global bailout of the banks. Anybody reading this will take your words with a pinch of salt without anything substantive backing it,you know ACTUAL EVIDENCE, not conjecture.

      It appears from your perspective Scotland is not a partner in this union, or perhaps is a partner but relinquishes all rights of said partnership upon leaving. It is quite right for Scotland then, to insist that a seizure of its equity in this manner be accompanied by an equivalent discount to its assumptive debt that fairly accommodates the inconvenience of making alternative currency arrangements.

      In other words Andrew, no negotiation on currency – no negotiation on debt.

  9. Andrew Dundas says:

    Hello Paul. Here are just twelve of the most blatant deceptions:

    “We never get the Government we voted for”. Very deceptive. We’ve NEVER had as much as fifty percent of voters favouring one Party. In 1966, 49.9% of voters supported the Labour government that we got. Otherwise, and as in every democracy at every election, most of us don’t ever get the Scottish MPs we want.

    “Scotland will get lower interest rates because we’d be a small State”. Incredible. No small State can get a lower interest rate than the main user of its currency. Otherwise arbitrage would end that variance. Joining the Euro could still be a good idea, but for unaccountable reasons the SNP rejects that EU policy.

    The UK Government is adamant: there will be NO new currency union with a new State of Scotland. Not out of prejudice, but because it is clear that currency unions do not work without economic and banking union. That does not stop Scots from continuing to use the GBP whilst gearing up to join the Eurozone asap.

    Contrary to the Manifesto, the NATO alliance is nuclear-armed and all States allow those weapons within their territory. Moreover, it is a mutual defence alliance that requires each member to both defend itself AND come to the rescue of any State that’s attacked. Which is why British military also invaded Afghanistan.

    It is most unlikely that there’d be a “joint energy market” that would continue to subsidise our reckless investments in ruinously expensive renewable technologies. If we had to pay for those contracted subsidies by ourselves, it would increase Scottish household bills by £300-400 pa.

    The maritime territories of the potential States are not yet agreed; there’s plenty of argument for lawyers to make money from. Any oil or gas raised by North sea licensees is their property and subject to UK law. No-one should promise rapid resolution of those issues.

    The UK Treasury owns 85% of RBS equity because it paid many billions of fiat money in 2008 to cover our Bank’s dodgy assets and to provide guarantees of RBS’ debts. No government is responsible for any banks’ frauds and recklessness, but EU rules require each to be responsible for its own banks’ liabilities wherever they arise in the EU. Had Scotland been a State, it’d been bankrupted.

    Every new EU applicant is required to adopt every current policy and without exception. Which, of course, includes adoption of the Euro asap. And the full CAP, pensions & benefits rules, university study rule (Everyone pays the same fees) and, in due course, the EU’s developing economic and policy union.

    There is no precedent for a breakaway nation being allowed back into the EU. It is clear that the UK would have to beg forbearance from each of the current 28 members, with no certain outcome.

    There will also be disputes about the tax liabilities of foreign nationals resident in Scotland who have incomes from outwith Scotland. And disputes about the proportion of sovereign debts attributable to the potential States. Should those reflect, say, the Barnett formula, relative populations or relative GDP? Nobody knows what the parties will finally accept.

    Finally, we should remind ourselves that Carney has told us that 70% of our external trades are with the rUK and that 14% of rUK’s external trades are with Scotland. Clearly, it’s in the interests of both not to fall out. But that remains much more important for us than for them!

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