Amateur at Work

When I started this blogging thing it was to put my view out there and add my voice to the greatest debate of our lives…for the independence of our country. I’m not a policy expert or a party adherent, clued up on minutiae, but I’ve been around the scene long enough to know my own mind and to judge my ideas against those who are paid to proselytise. I’ve seen and heard their weaknesses and observed how they operate and it helps me form opinions on the political class and the way we are governed.

But, like 99 per cent of us, I’m not for example a trained economist or a reader in international law so, again like the 99 per cent, I rely a lot on common sense and everyday experience to inform my judgement. I’ve found it not a bad process because often I find the real experts are too close to their subject and suffer professional myopia, a kind of academic’s tunnel vision, to be totally useful. (Sorry to all you professors). In other words, as a glance at previous blogs will show, I’m an amateur.

I’m happy with that because as a journalist it allows me strip out complexities in an argument and focus on areas which a lay listener will understand, acting as a kind of bridge between interviewee and audience. (And you thought I just asked questions).

So it’s in that spirit that I followed the news about currency, the latest element being a Scottish civil servant’s statement that a sterling union could not be stated as fact. In other words, it could not be guaranteed. It would however be set out as the best option for Scotland.

In Propagandaland this turned out to contradict the Scottish government’s position that a pact would inevitably follow independence and was variously another setback for Salmond or, in one London paper, a crisis.

Worried that my lack of professional insight denied me access to the glaring evidence so clear to the journalists – and Johann – I re-read the news only to return to my first reaction. The Scottish government never could guarantee a currency union because it could only be achieved through negotiation with London. It is not in Salmond’s gift to deliver a formal currency pact, meaning that the crisis wasn’t real in any meaningful way because nothing had actually changed but was instead a propaganda row.

The critics were really drawing a line differentiating between the perception they placed on Salmond’s words – that he somehow promised something he couldn’t deliver – and the reality spelled out by a civil servant that it couldn’t be promised because it needed agreement first. Left unchallenged was Salmond’s pragmatic statement that it was common sense for London to agree a currency share as it was in the interests of the pound itself and of business on these islands – a point previously agreed by Alastair Darling.

At no stage in any of this semantic orgy did anybody say the key words: That London will not agree to a currency union, which remain the only ones relevant. If the unionists want to destroy Salmond’s policy, rather than damage his PR strategy, they must insist that London clarifies its position and either concedes it will discuss a pact or that it rules it out. The pressure should be applied not to Salmond but to Osborne and his supporters as Salmond has made clear his position but what is Osborne’s? We don’t know beyond veiled and totally unconvincing threats. I’m not sure I’ve read a single Scottish journalist make this case. I’m sure one has and I missed it but in a deafening demand for information and clarification, isn’t it clear that, whatever Salmond says on a range of important issues, it is only London that can provide the answers? Accepting that most journalists work for Unionist-backed outlets and are obliged to follow the paymaster’s tune, isn’t there still a wider responsibility on the trade of journalism to seek out information and to hold accountable?

It must be my naivety again but after watching Alistair Carmichael dissembling on Newsnight I thought the UK’s position had weakened considerably. It couldn’t be more embarrassingly obvious that they are playing a double game demanding answers from the SNP to questions that they themselves won’t address. They are deliberately refusing to clarify on currency and the EU – not to mention naval contracts – and, like puppet-masters, must laugh as the once proudly independent Scottish media dance to their tune. It seems to me this contradictory, hypocritical and unhelpful stance is of a nature that editors should have the guts to confront it. Yet, as they did when Cameron weasled his way out of a head-to-head TV debate with Salmond, Scottish journalism turns away. A lost cause.

Lacking the professional knowledge of the Press, I’m dangerously relaxed about the currency. I can’t see how anybody can stop me using my own currency and, that being the case, nothing much will change. I’ve said before that a Yes vote will send London into overdrive and they will desperately want a common currency for both monetary reasons and global credibility and it will form a key part of disaggregation talks, whatever their uncritical salesmen say today. The real question will become a different one – do we want to be part of their debt-ridden, bank-obsessed economy at all or should we launch our own healthy currency and leave them behind?

And I leave that in the hands of a professional economist….

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0 thoughts on “Amateur at Work

  1. That’s spooky, I’ve just posted that link on Cuddly Bear Attack (still awaiting moderation). Apparently your blog didn’t like the link. But I agree its a good piece by George and a good sensible argument he puts forward.

  2. Thanks Derek, I see the post has appeared now.

  3. Excellent summary Mr Bateman and you are right to remind us amateurs that, with a wee bit common sense, our gut assessment is going to be correct.

  4. “At no stage in any of this semantic orgy did anybody say the key words: That London will not agree to a currency union”

    Who would say such a thing.

    Plenty of people however have said that the UK will not agree to a currency union with a separate Scotland without stringent conditions attached. Conditions in fact which place the fabled SNP ‘levers’ in the hands of the UK Treasury. Since we’re so keen to quote Mr Darling he described such a situation as “Scotland’s budget would have to be agreed with the remaining part of the UK. That’s not freedom, its servitude.”

    • Would these stringent conditions you refer to relate to monetary policy or to fiscal policy? And furthermore, would the rUK be able to abide by such conditions, considering that the UK deficit is still increasing and now represents 4.4% of GDP, even worse than Greece?

      • The stringent conditions would apply to both fiscal and monetary policy as even John Swinney was forced to accept in an interview with Andrew Neil.

        I think you’ll find that the conditions will be set by the UK just like the conditions for entry to the EU and NATO will be set by those bodies.

    • Yes but the point about independence means if it isn’t working for Scotland then we ditch it in favour of something which will.

    • Grahamski
      Obviously you don’t know much about Economics either since you apparently don’t know the difference between monetary policy, which would govern a currency union, and fiscal policy which would govern the tax and spend policies and has got more or less FA to do with a currency union.
      And you write, “Plenty of people however have said that the UK will not agree to a currency union with a separate (he means Independent) Scotland without stringent conditions attached”
      So who are these “plenty of people”? Respected economists? IMF experts? Or just opinionated know nothing journalists, or worse, similar opinionated commenters to newspapers like yourself.

      • The ‘plenty of people’ are many and varied and range from Martin Wolf, chief economics commentator at the FT to Professor Brian Quinn, who was head of banking supervision at the Bank of England later to become deputy governor.

        Both of whom suggested that it was inconceivable that the UK would enter into a currency arrangement with a separate Scotland without stringent conditions on both monetary and fiscal policies.

        Indeed even John Swinney was forced to accept that there would have to be guarantees of ‘fiscal responsibility’ made by a separate Scotland to the rest of the UK before such an agreement could be reached.

        • Why would anybody other than the most blinkered of British nationalist fanatics have to be “forced” to accept something which is glaringly obvious? That independent central banks impose budgetary constraints on governments will not come as a surprise to anyone other than the “true believers” in the British state. That, to a large extent, is what independent central banks are for.

          The point is not that there would be constraints but what those constraints might be. An independent central bank in Scotland would also impose constraints. How likely is it that they would be significantly different from the rules currently imposed by the Bank of England? Not very likely at all. Because central banks also work under constraints – formal and informal – imposed by the global financial system and its institutions.

          The implication from the scaremongers of Project Fear is that the BoE would seek to enforce a regime that would be detrimental to Scotland’s economy. But, given that the economies are presently fairly well aligned, anything that damaged Scotland’s economy would also harm the economy or rUK. Unless they suppose that there might be different rules each side of the border. In which case, there wouldn’t be a currency union.

          These British nationalist fanatics are so bent on Scotland being punished for having the temerity to challenge the divinely ordained British state that they are happy to slice off their own noses just to spite those uppity Jocks.

          How concerned should we be about threats of retribution from some British Labour nonentity? Not very. These are not the sort of people who get into positions of influence. After independence, pragmatic self-interest will be the order of the day. British politicians will put away the by then redundant rhetoric of hate and fear with which they have conducted the campaign to preserve their own power and privilege and look to finding new arrangements that are workable and mutually acceptable. And that includes currency arrangements.

          Looking at the situation rationally – which, of course, no fanatic is capable of doing – the very worst that could happen in terms of a post-independence currency union is that we would be exactly where we are now, with the BoE conducting its operations with one eye on the City of London and the other eye on the City of London. The difference – and it is a huge difference – is that we would have the option to quit this currency union. We would have choice – the great prize of democracy.

          And that is what the British establishment really fears. And independent Scotland in a currency union with rUK would have much more power than it does now. Because it would always have the “nuclear” option of walking away from the sterling zone, taking with it its multi-billion pound contribution to the joint balance sheet of the two nations. The fear is not that the rUK/BoE would force Scotland into the kind of socially corrosive and economically destructive cycle of crises that define neo-liberal orthodoxy and represent all that the British parties have to offer. The fear is that, by way of economic leverage and political example, that cycle might be broken in the rUK as in Scotland.

  5. Grahamski – dear dear me.
    Think your missing the point and falling into the obivous trap that all regionalists teeter into – wait for the white paper. You lot are way off the mark on this and going to feel really stupid.
    The alternative to the fair and reasonable offer of a currency union to suit all trading (for an agreed period) will obviously be a new independent Scots Pound, duhhhh. Its a trap for the UK govt
    who should simply say, fine but only for 5 yrs say. And then sort out your own issues.
    But go ahead scurry along back to BT HQ and find something else to challenge; in fact better go and reign in Big Carmichael before he eates the whole cookie jar.

  6. Isn’t that (common sense) one of Nicola’s more commonly used remarks…

  7. Another great piece, Derek.

    ‘Lacking the professional knowledge of the Press, I’m dangerously relaxed about the currency. I can’t see how anybody can stop me using my own currency and, that being the case, nothing much will change.’

    You appear to be on the same wavelength as the great Scottish electorate:

    TNS Indy poll Nov. 8th

    ‘More than a third (37%) of voters want to know more about pensions/benefits and 31% are looking for more information on taxes. Other issues where people want to be better informed are immigration (22%), Scotland’s share of the UK national debt (20%) and defence (18%).
    Considerable media discussion about other issues has not resulted in a thirst for more information: only 13% want to be better informed about the implications of independence for the currency.’

  8. Grahamski, could you name some of these plenty of folk and give us Mr Darlings bit in full?
    oh and you thoughts on his comments about whether or not Scotland could survive as an independent nation would also be welcome.

    • Hi Jim

      See above, i’ve named Martin Wolf chief economics commentator over at the Financial Times and Professor Brian Quinn previously deputy governor of the Bank of England..

      Scotland could survive as a separate country however I see no advantage in breaking relationships which we will need to immediately re-establish. That to me is just nuts.

  9. There are other awkward questions that journalists are failing to ask of the British parties; the UK Government and the anti-independence campaign. For example, British politicians argue that continuing the currency union after Scotland regains it’s independence would be “unworkable” because a common currency is incompatible with fiscal autonomy. Leaving aside the fact that this is contradicted by the likes of France and Germany, how do these opponents of independence reconcile this supposed incompatibility with their vaguely stated intention to deliver some kind of fiscal autonomy for Scotland if we vote No?

    If a common currency and fiscal autonomy cannot possibly go together then how do they propose to deliver meaningful fiscal autonomy while maintaining the currency union that already exists?

  10. You may be an amateur Derek but your speelin and ponctuashun is top knotch!!

  11. As a subject of HMQ can I request that someone from HMG please give me a guarantee the value of sterling will be protected and preserved should HMG be forced to throw those nasty Scots out of the Bank of England monetary zone should they wish to withdraw from the United Kingdom upon a yes vote in the Scottish referendum. Please. (Mr Osborne, Carmichael or Cameron please guarantee the value and stability of the £ sterling at its current values). Your humble subject.

  12. And here’s silly old me, thinking that – as with all other globally traded currencies and the 9 countries who already use Sterling – it would be impossible for rUK to prevent Scotland from having Sterling as its currency.

    Although in policy terms, I’m with the Greens – it’s fine as a transitional mechanism, but we’re better served in the long term with our own currency (and I vote for it to be the Merk).

  13. Re Grahamski’s assertion about Scotland giving assurances on fiscal responsibility to the rest of the UK, having read Iain McWhirter’s piece in The Herald on Thursday, perhaps we should be looking for guarantees. “The nation’s going south….and Scotland’s paying”, is a chilling insight into what life will increasingly become for us and the rest of the feeders of London and the south east where the bubble is expanding again.

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