Scottish Independence and the Pound Sterling

If I lived in Scotland I would vote No in the independence referendum. I believe that the UK should remain united even if there is a degree of self government for both Scotland and Wales and what could be wrong with a degree of autonomy for the English regions? Northern Ireland has also benefited from a form of self government and even shared sovereignty with Ireland.

I see no reason why the issue of Scotland remaining in the "Sterling Area" should be used as a type of political football.

At one time during the past, when the pound was under threat, the Scottish Nationalists were quite happy to traduce the pound. They have changed their minds for fear that  the Scottish people might vote No if they are deprived of their Sterling.

UK national politicians from the major political parties have now joined in the argument saying that it would be impossible for Scotland to join in a currency union if it were to secede from the UK: it would not be to the economic benefit of either Scotland or the remaining parts of the UK if there were to be a currency union.

I presume that the Liberal party no longer supports British membership of the European Currency Union for the same reason. It is quite possible that the Euro nations will return to prosperity and that the Euro will again become a success and it could become an attractive possibility for Britain to join in the future.

It is nonsense to suggest that Scotland should not join the UK in a currency union if they were to become independent. Britain and Ireland effectively had a currency union between 1928 and 1978 and this was reasonably successful.

If Scotland were to join in a currency union a treaty could be used to decide on what settlement risk Scotland should take on but depending on the size of its population or its economy.  An independent Scotland would  probably maintain similar fiscal rules to the UK as both economies would have a similar structure.

It is disingenuous of UK national politicians to put pressure on the Scottish electorate so a currency union should be negotiated if and when Scotland votes for independence. The Scottish people would be natural allies and partners of the rest of the UK.

Whatever will be proposed  next?  Is the UK to deny the Scottish people a "Common Travel Area" arrangement like we have with Ireland? Are we going to erect border posts and deny Scottish people a vote if they move to England, Wales or Northern Ireland? Are we going to take "sour grapes" that far?

Scotland, if left to its own devices, could choose to use the pound Sterling as its currency for all transactions including taxation on a semi-official basis. The downside of this decision would be that the Scottish treasury could not set its own national interest rate independently.

Many countries have decided to use a foreign currency in this way. And many countries use the dollar in a process of "Dollarization" or Currency Substitution. Montenegro uses the Euro as its national currency even though it is not a member of the EU.

Scotland could choose to join the Euro or even use its own currency if allowed  - there are many options available and no doubt Scotland would continue to prosper.

There are dangers that Scotland would be forced to re-apply for membership of the European Union. Spain is likely to insist on this in order not to set the precedent of a seceding nation being granted automatic membership of the EU on existing terms. Spain is wary of Catalonia seceding from Spain.

Scotland might face the possibility of being forced to join the Euro but perhaps this would be an entirely acceptable solution.

It is preferable that Scotland does not leave the Union; the whole of the UK including Scotland will be stronger if we remain united. This does not mean that the rest of the UK should pressure the Scots not to vote Yes and that we should not help them if they do.

http://en.wikipedia.org/wiki/Currency_substitution

http://www.investopedia.com/terms/c/currency-substitution.asp

http://news.bbc.co.uk/1/hi/world/europe/1740493.stm

http://www.citizensinformation.ie/en/moving_country/moving_abroad/freedom_of_movement_within_the_eu/common_travel_area_between_ireland_and_the_uk.html

http://www.citizensinformation.ie/en/moving_country/moving_to_ireland/introduction_to_the_irish_system/right_to_vote.html#l862a3