I have just finished watching the video on the BoE decision that it will implement what is decided between Westminster and Scotland in the event of the creation of a Sterling Zone. The statements of Darling and Sillars both leave out as many details as each other when it comes down to the Fiscal Policy that will be in place when an Independence vote is achieved in Scotland on the 18th of September. Darling is clearly rattled at the thought of having a Sterling Zone in place between the two countries as it would mean that rUK would have to come clean on its debt policies and borrowing requirements. Currently the UK National Debt stands at over 1.3 Trillion pounds. This figure is not the true level of debt that the UK has but is the one that is used as a basis for negotiations for loans etc. This means that for every individual living in the UK in order to clear the existing debt based on this figure it would cost them £21,232 each but as the debt is only reclaimable from taxpayers it would then mean in order to clear it that every tax payer would have to pay £36,520. The true level of UK debt is scary indeed and this illustrates it. “Mainstream media headlines today are focused on Britains record national debt, which just surpassed £1 trillion, a figure that can only exponentially increase unless the entire mechanism of Government finance is overhauled. The truth however is much worse, factoring in all liabilities including state and public sector pensions, the real national debt is closer to £4.8 trillion, some £78,000 for every person in the UK.” National Debt is incurred by government spending and when no cap is in place it can spiral totally out of control as was the case with Greece, Portugal and Ireland where they had to go cap in hand to the EU for a bail out. Having a capped National Debt can result in what the US went through last November when government employees were kept off work with no pay until the Senate released more money into the American economy to allow the country to function. If a Sterling Zone agreement goes ahead then there has to be equality in the decisions in the usage of Sterling. These agreements will include the setting of Income Tax and the level of borrowing allowed as the main topics. Westminster will not like the idea that Scotland will have influence on how much it can borrow in a shared currency and at the same time the setting of Tax Rates in Scotland by agreement of Westminster will not be much liked either. When questioned about ‘Plan B’, Jim Sillars did not give an answer to the interviewer and had I been him, I would not have either. The Idea of a ‘Plan B’ is to have an alternative Fiscal Policy to fall back on and whether that is for Scotland to transition to its own currency or to join the Euro Zone and become a Euro country is something that will have been discussed and worked out in advance and you do not tell your opponent what your alternatives are. The concerns and questions raised for Scotland’s population as to what the SNP will do in respect of the currency question are quite genuine because this is one of the main issues that face Scotland for the future. Alex Salmond and the SNP would not be taking Scotland towards Independence without a solid plan but this needs to be transparent to the population and set aside concerns. Westminster will be seriously concerned as to Scotland’s decision because if Scotland goes for the Euro it is quite possible that with the loss of the taxes from oil revenues they will have a Sterling pound that is no longer guaranteed with the income that has been derived from oil. As September draws closer there will be a lot more questions and debates on Scotland’s choice of currency and a lot more lies and accusations about it as well. Scotland has to start off its Independence in the right way and not falter at the first hurdle which is the Fiscal decision. Alba Gu Brath.
Posted on: Thu, 30 Jan 2014 10:14:04 +0000
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