Scottish currency to be worth less than pound.

[Terry_Tibbs]

Quote

A NEW Scottish currency would initially be worth around 20 per cent less than the pound, lowering household incomes and pushing up prices, an economist has warned.

Tony Mackay, an adviser to the World Bank, said independence would cut exports to England by 15% because of the border created by the SNP’s plan to rejoin the EU.

He said there was no doubt “an independent Scotland could be economically viable”, but people deserved “an objective analysis” of the implications before voting on it.

Mr Mackay, who has been critical of the SNP Government in the past, makes the comments in an analysis on the economics of independence in the Sunday Times.

Nicola Sturgeon has said she wants a second independence referendum by 2024, Covid permitting, then independence in 2026. However, a Panelbase poll for the Sunday Times found only 22% of Scots want Indyref2 within 12 months, 33% want it in two to five years, and 45% don’t want it at all.

The SNP’s currency plan for independence is to keep using the pound until economic conditions allow a switch to a new Scottish currency.

Mr Mackay, who advised the government of Bosnia-Herzegovina after its independence from Yugoslavia, said keeping the pound would mean ceding power to the Bank of England.

He said a new currency, because of Scotland’s public finances and lack of a track record, would initially “be 18 to 22 per cent lower than that of the pound sterling”.

“It is possible that the exchange rate would increase over time but it could also worsen.”

He said: “The bottom line is that average incomes in Scotland would be lower, although not by as much as 22 per cent. 

“Many people would be unaffected but those working in export industries and the public sector would be. Foreign holidays, including trips to England, would be more expensive.”

A recent report by Credit Suisse warned a Scottish currency could cause capital flight as people hurried to move their savings out of the country to keep them in sterling and avoid a devaluation.

Under the SNP’s plans, an independent Scotland would rejoin the EU, making the border with England a tightly-regulated external EU border.

Ms Sturgeon last month admitted would create “practical difficulties” for trade, but insisted these could be resolved in talsk with London, although without specifying how.

She has said a full prospectus, including possible downsides, will be put before voters ahead of Indyref2.

Mr Mackay said that with 60% of Scottish exports going to the rest of the UK, against 19% to the EU, an England-Scotland trade border would be a key issue, with negotiations possible taking a few years.

He wrote: "Brexit has created ongoing problems at the border between Northern Ireland and the Republic of Ireland, and the new issues would be far more complicated than those.

“A border with England would undoubtedly reduce trade, as industries such as fish processing and whisky have already found out with the new EU border. 

“There could be restrictions or quotas on the export and import of specific products and services. There would also be added costs for virtually all trade because of the paper and legal work involved.”

“It is difficult to forecast the impact but, based on the Brexit forecasts and experience to date, I estimate that Scottish exports to England could fall by about 15%. There is likely to be some relocation of production to England, notably by UK-owned companies. 

“There would be a similar fall in company profits in Scotland. Many businesses would try to diversify and find alternative overseas markets but that could also be time-consuming and costly.”

Mr Mackay also that an independent Scotland “would have to eliminate or reduce” its public sector deficit “as quickly as possible”. 

He said: “That would mean increasing taxes and other government revenues, and cutting public expenditure. An obvious conclusion is that the Scottish growth rate would continue to be lower until the problems had been solved.”

SNP depute leader Keith Brown told the Sunday Times that independent European countries of Scotland’s size were among the best economic performers in the world.

He said: “Denmark’s national income per head is around 20 per cent higher than the UK’s and Norway’s is around 40 per cent. With Scotland’s abundant resources, the full powers of independence and as part of the European single market there is no reason we cannot emulate the success of similar-sized countries.”

A spokesperson for Scotland in Union added: “It’s clear that people do not consider independence a priority for the new government - Scotland says recovery, not referendum.

“When the country is so divided, no responsible politician would be looking to increase that division.

“It’s clear, as expert economists have repeatedly confirmed, that we are stronger as part of the UK and can build a successful future that leaves no community behind.”

Source: https://www.heraldscotland.com/news/19306651.new-scottish-currency-worth-fifth-less-pound-sterling/?ref=ar

All economists are seemingly in agreement that public services will have to be cut in an independent Scotland with tax rises and falling incomes. The retired boomers, who own their own homes, might be alright but what about young families with mortgages? Who'd want their wages paid in a devalued sottish currency while their mortgages payments are 20% higher? Cue mass foreclosures.

[Jacksgranda]

2 minutes ago, Terry_Tibbs said:

Source: https://www.heraldscotland.com/news/19306651.new-scottish-currency-worth-fifth-less-pound-sterling/?ref=ar

All economists are seemingly in agreement that public services will have to be cut in an independent Scotland with tax rises and falling incomes. The retired boomers, who own their own homes, might be alright but what about young families with mortgages? Who'd want their wages paid in a devalued sottish currency while their mortgages payments are 20% higher? Cue mass foreclosures.

Surely the chapels and parochial homes are all paid off?

[SANTAN]

Aye but what about the tories?

[BigDoddyKane]

Quick question how does he work out that exports to england would drop by 15%, if Scottish currency is cheaper it would surely increase exports and possibly cancel out any border issues

Edited May 21, 2021 by BigDoddyKane

[jakedee]

Coming to the conclusion that an indyref2 is not the priority of the people of Scotland, when 55% want one within 5 years is just another contradiction.

[Melanius Mullarkey]

Quote

He said there was no doubt “an independent Scotland could be economically viable”,

[SANTAN]

28 minutes ago, jakedee said:

Coming to the conclusion that an indyref2 is not the priority of the people of Scotland, when 55% want one within 5 years is just another contradiction.

Do they? Have you got a link to the source for that one, that doesn't sound very likely to me. 

[madwullie]

Just now, Stormzy said:

Do they? Have you got a link to the source for that one, that doesn't sound very likely to me. 

It's in the article in the op

[madwullie]

38 minutes ago, Terry_Tibbs said:

Nicola Sturgeon has said she wants a second independence referendum by 2024, Covid permitting, then independence in 2026. However, a Panelbase poll for the Sunday Times found only 22% of Scots want Indyref2 within 12 months, 33% want it in two to five years, and 45% don’t want it at all.

 

[SANTAN]

1 minute ago, madwullie said:

 

Ahh I see, adding the two numbers together and it's from a one off panel base poll. 

I'm not so sure 55% of the population of Scotland want a referendum within the next 5 years, I'm sure a large portion of the 33% cited would prefer having one in the next 5 years to not having one at all which kinda skews that aspect considering it is their only option. 

Most people on here seem to only want one when they think they'll win which means if polling in 5 years time was where it is at now those same people wouldn't want one. 

[jakedee]

Ahh I see, adding the two numbers together and it's from a one off panel base poll. 
I'm not so sure 55% of the population of Scotland want a referendum within the next 5 years, I'm sure a large portion of the 33% cited would prefer having one in the next 5 years to not having one at all which kinda skews that aspect considering it is their only option. 
Most people on here seem to only want one when they think they'll win which means if polling in 5 years time was where it is at now those same people wouldn't want one. 

Several polls have shown the majority want an indyref2 referendum within 5 years. The question is always asked like that. Within a year, 2-5 years, more than 5 years, within 10 years, never.

[Antlion]

56 minutes ago, Terry_Tibbs said:

Source: https://www.heraldscotland.com/news/19306651.new-scottish-currency-worth-fifth-less-pound-sterling/?ref=ar

All economists are seemingly in agreement that public services will have to be cut in an independent Scotland with tax rises and falling incomes. The retired boomers, who own their own homes, might be alright but what about young families with mortgages? Who'd want their wages paid in a devalued sottish currency while their mortgages payments are 20% higher? Cue mass foreclosures.

Is that the same economists who claimed Brexit would be economic Armageddon, and whom you claimed got it all wrong?

Edited May 21, 2021 by Antlion

[D Angelo Barksdale]

Hearing that they will be called groats and bawbees too. Tinpot stuff.

[Marshmallo]

One dollar is worth less than one pound and it's held the USA back massively. Scary stuff.

Edited May 21, 2021 by Marshmallo

[Bairnardo]

13 minutes ago, Henderson to deliver ..... said:

Hearing that they will be called groats and bawbees too. Tinpot stuff.

Gordon Strachan called this ages ago. Scots are just naturally smaller, so it stands to reason that we would want wee tiny Groats for our wee tiny trotter-like paws. A non story IMO, if anything i'd think 25% smaller would be better

[John Lambies Doos]

A NEW Scottish currency would initially be worth around 20 per cent less than the pound, lowering household incomes and pushing up prices, an economist has warned.
Tony Mackay, an adviser to the World Bank, said independence would cut exports to England by 15% because of the border created by the SNP’s plan to rejoin the EU.
He said there was no doubt “an independent Scotland could be economically viable”, but people deserved “an objective analysis” of the implications before voting on it.
Mr Mackay, who has been critical of the SNP Government in the past, makes the comments in an analysis on the economics of independence in the Sunday Times.
Nicola Sturgeon has said she wants a second independence referendum by 2024, Covid permitting, then independence in 2026. However, a Panelbase poll for the Sunday Times found only 22% of Scots want Indyref2 within 12 months, 33% want it in two to five years, and 45% don’t want it at all.
The SNP’s currency plan for independence is to keep using the pound until economic conditions allow a switch to a new Scottish currency.
Mr Mackay, who advised the government of Bosnia-Herzegovina after its independence from Yugoslavia, said keeping the pound would mean ceding power to the Bank of England.
He said a new currency, because of Scotland’s public finances and lack of a track record, would initially “be 18 to 22 per cent lower than that of the pound sterling”.
“It is possible that the exchange rate would increase over time but it could also worsen.”
He said: “The bottom line is that average incomes in Scotland would be lower, although not by as much as 22 per cent. 
“Many people would be unaffected but those working in export industries and the public sector would be. Foreign holidays, including trips to England, would be more expensive.”
A recent report by Credit Suisse warned a Scottish currency could cause capital flight as people hurried to move their savings out of the country to keep them in sterling and avoid a devaluation.
Under the SNP’s plans, an independent Scotland would rejoin the EU, making the border with England a tightly-regulated external EU border.
Ms Sturgeon last month admitted would create “practical difficulties” for trade, but insisted these could be resolved in talsk with London, although without specifying how.
She has said a full prospectus, including possible downsides, will be put before voters ahead of Indyref2.
Mr Mackay said that with 60% of Scottish exports going to the rest of the UK, against 19% to the EU, an England-Scotland trade border would be a key issue, with negotiations possible taking a few years.
He wrote: "Brexit has created ongoing problems at the border between Northern Ireland and the Republic of Ireland, and the new issues would be far more complicated than those.
“A border with England would undoubtedly reduce trade, as industries such as fish processing and whisky have already found out with the new EU border. 
“There could be restrictions or quotas on the export and import of specific products and services. There would also be added costs for virtually all trade because of the paper and legal work involved.”
“It is difficult to forecast the impact but, based on the Brexit forecasts and experience to date, I estimate that Scottish exports to England could fall by about 15%. There is likely to be some relocation of production to England, notably by UK-owned companies. 
“There would be a similar fall in company profits in Scotland. Many businesses would try to diversify and find alternative overseas markets but that could also be time-consuming and costly.”
Mr Mackay also that an independent Scotland “would have to eliminate or reduce” its public sector deficit “as quickly as possible”. 
He said: “That would mean increasing taxes and other government revenues, and cutting public expenditure. An obvious conclusion is that the Scottish growth rate would continue to be lower until the problems had been solved.”
SNP depute leader Keith Brown told the Sunday Times that independent European countries of Scotland’s size were among the best economic performers in the world.
He said: “Denmark’s national income per head is around 20 per cent higher than the UK’s and Norway’s is around 40 per cent. With Scotland’s abundant resources, the full powers of independence and as part of the European single market there is no reason we cannot emulate the success of similar-sized countries.”
A spokesperson for Scotland in Union added: “It’s clear that people do not consider independence a priority for the new government - Scotland says recovery, not referendum.
“When the country is so divided, no responsible politician would be looking to increase that division.
“It’s clear, as expert economists have repeatedly confirmed, that we are stronger as part of the UK and can build a successful future that leaves no community behind.”

Source: https://www.heraldscotland.com/news/19306651.new-scottish-currency-worth-fifth-less-pound-sterling/?ref=ar
All economists are seemingly in agreement that public services will have to be cut in an independent Scotland with tax rises and falling incomes. The retired boomers, who own their own homes, might be alright but what about young families with mortgages? Who'd want their wages paid in a devalued sottish currency while their mortgages payments are 20% higher? Cue mass foreclosures.
Scare mongering pish

[D Angelo Barksdale]

5 minutes ago, Bairnardo said:

Gordon Strachan called this ages ago. Scots are just naturally smaller, so it stands to reason that we would want wee tiny Groats for our wee tiny trotter-like paws. A non story IMO, if anything i'd think 25% smaller would be better

All those wisecracks about your height, now it's your time to stand tall and shine.

Would love to see you on the Growth Commission with input like this.

[Bairnardo]

Just now, Henderson to deliver ..... said:

All those wisecracks about your height, now it's your time to stand tall and shine.

Would love to see you on the Growth Commission with input like this.

We can only play the hand we are dealt brother. A thread of Yoon drivel is a rare occassion where even the more diminutive posters can fire off a size joke and not be the main figure of fun...

 

[The_Kincardine]

15 minutes ago, Marshmallo said:

One dollar is worth less than one pound and it's held the USA back massively. Scary stuff.

Congratulations.  You're qualified to be chancellor of the exchequer in The Scottish Transnistria.

[SANTAN]

Imagine disliking that OP... Embarrassing stuff, close your eyes, fingers in the ears, mask on and don't move til Nicola says it's safe to do so.