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Concentrate on fiscal policy before considering currency

The recent advocacy for a re-established Scottish currency to provide an independent Scotland with the capacity to practise a less-restrained fiscal and monetary policy founds on the assertion that Scotland can stand proud and prevail in future scenarios of market turbulence ("Canavan calls for new Scots currency", The Herald, May 1).

But whenever global market forces are considered, scale very much matters. There has to be acknowledged access to sufficient financial reserves to weather market pressures. Collaboration between countries to secure combined strength has been a prime factor driving the euro project. The recent experience of the euro venture has highlighted the importance of how such collaboration is designed and managed.

For Scotland, accessing necessary scale and collaborating with other countries over monetary and fiscal policy will be a prerequisite to managing market uncertainties. An independent Scotland would have to establish effective institutional arrangements by which to engage in collaborative governance.

The Better Together campaign recognises the benefit provided by the UK scale of resources. Their argument becomes less convincing when governance is considered. But the Bank of England and the Treasury have a recent track record of outcomes that is truly dismal – unsustainable growth and then stagnation, high public and private debt and an ever-depreciating pound.

The sterling currency union between Scotland and the rest of the UK as proposed by the Scottish Government assumes that better governance arrangements can be negotiated between the national partners. In practice, the institutional arrangements by which an independent Scotland will enter into effective monetary and fiscal collaboration will require negotiation at UK and European levels.

In spite of the current reluctance of the UK Government and the EU to "learn to dance" with the Scottish Government in advance of the referendum, the debate in Scotland should concentrate on clarifying the most constructive shape of the future institutional arrangements and not obsess about an essentially parochial idea for an independent Scottish currency.

David Kirk,

24 Millbank, Cupar.

A senior former Bank of England economist has warned Alex Salmond he should start planning for a new currency called the "scottie" ("Economist urges Government to plan ahead for a Scottish currency", The Herald, May 2). How appropriate that would be – a wee black dog for a separate nation.

J Neil Young,

13 Ewing Walk,

Glasgow.

Let's dispel once and for all the idea that Scottish oil and natural gas reserves are rapidly running out (Letters, May 3). Nothing could be further from the truth.

The current projection by the oil industry is that there are at least another 40 years of oil and gas reserves in the North Sea, worth at least £1 trillion in associated revenues. New extraction technology now being developed by the industry could extend the use of these declining fields and open up still undeveloped sites, increasing the production life of the North Sea well beyond the predicted 40 years.

In the North Atlantic sector there are massive oil and natural gas fields still to be developed, which are predicted to contain two or three times the quantities in the North Sea.

Although playing this down, the UK Government is aware of the potential and has earmarked 2500 licensing blocks to be sold to the global oil industry in due course. Once extraction difficulties in such a hostile environment are overcome, these reserves could produce another 100 years of oil and natural gas.

There is also the well-kept secret of Scottish mainland oil and natural gas reserves under our own feet. An eminent professor of oil economics has already stated that such mainland resources could be as large as, or even more than, all of the Scottish North Sea reserves.

And when the oil finally runs out, there are huge quantities of Scottish onshore and off-shore coal-bed methane gas reserves to be exploited.

Whitehall, the Bank of England and the City of London are well aware that it is only the billions of oil revenues that have kept the UK economy afloat in the past few decades and saved Britain from becoming another economic basket-case like Italy, Spain, Greece and recently Cyprus.

The No campaign has nothing to do with us all being Better Together but rather it is to make sure that the rest of the UK hangs on to every pound of future oil and gas revenues for the next 100 years at least.

There is no doubt that Scotland is a very wealthy country, literally floating in oil and gas. Backed with these huge resources, together with our already well-established and successful industries of agriculture, fisheries, whisky and tourism, we are perfectly capable of supporting our own Scottish currency and financial system.

Why on earth would we want to give up all of that, and tie ourselves instead to a steadily declining pound sterling and the economic and fiscal control of the Bank of England and the London Treasury?

Iain A D Mann,

7 Kelvin Court, Glasgow.

Douglas Alexander says: "It is not that we do not want change. We do. Yet the Nationalists are struggling because the change they offer is not the change we seek" ("In the big debate we must be able to disagree without being disagreeable", The Herald, Agenda, May 3).

Who is the "we" he refers to? Later he says the Nationalists' settled will is at odds with the sovereign will of the Scottish people. How does he know? Opinion polls are insufficient in determining that.

He decries the Scottish national cause as existential. What else is nationalism but existential? Does it not also apply to British nationalism? Observe the obsession with Britain's relationship to Europe. In both cases, sentiment and the economy are intertwined. Large sections of the UK thoroughly dislike the authority of the European Union because they cannot control that body and have only limited influence over it. There is growing demand for the UK to leave the EU. The position of Scotland within the UK is almost identical.

I agree with Mr Alexander that the quality of the debate must improve. Both sides have been guilty of misrepresentation, obfuscation and sometimes vituperation. This must stop. Both sides must ask for reasonable answers from the other, but the questions must be realistic. There can never be absolute answers to questions about the future.

No-one can predict the future for Scotland as an independent nation. That will be the result of the people's choices, choices they cannot make until they are independent.

John Scott Roy,

42 Galloway Avenue,

Ayr.

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Finance

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