Why an SNP plan B could never satisfy Unionist critics Ian Bell Columnist Saturday 16 November 2013 ONE thing in Scottish life is certain. Should the SNP ever come up with a plan B, some opponent will spring forward to condemn the reckless failure to prepare plan C. Its in the nature of the game. And it is not a game the party of government is supposed to win. The people who make the demand for a policy alphabet itinerary want the sort of news from the future that even Doctor Who would struggle to supply. They cant or wont tell you where Scotland will stand in the event of a No vote next September, or even, with any clarity, what they have in mind. They cant tell you what 2015s Westminster elections will bring. If they once did a chancellors job, they will hesitate over long-range economic forecasts. But they see it as their task, indeed their duty, to demand cast-iron guarantees of the SNP. One reason is the No campaign has been constructed around the idea of uncertainty, a word presumed equivalent to rank fear among voters. Another reason, sound enough in a short-term political campaign, is they want to pin Alex Salmond and his party to a single position, the better to pick it apart. We have witnessed as much this week in a series of choreographed attacks on the governing party over the currency arrangements it proposes for an independent country. I happen to think the proposal is a poor one, but well get to that. The No campaign doesnt much care. The SNP could choose any one of the three available options and Unionists would want to know about the beta plan. As to the three possibilities, they are easier to state than to endorse. We could embark, as the SNP suggests, on a currency union with the rump UK, claiming our stake in the Bank of England and its decision-making. Mr Salmond believes London would grab such a deal, in the end, partly because of the balance of payments contribution to be had from Scotlands oil reserves. He also seems to think the pounds survival would calm voters nerves. Alternatively, we could embrace the euro. Interestingly, Unionists have stopped claiming an independent Scotland would be forced into such a move by Brussels, perhaps because the strain of keeping two false ideas in their heads at once has been too great. The political reality is nevertheless straightforward: in the short-term, its not going to happen. The eurozone might have defied all the prophets of doom, but it is still in a very bad way. That leaves an independent currency for an independent country. Mr Salmond seems a bit muddled about this. If oil reserves make a sterling union attractive to London, why could those same assets not be used to back a Scottish pound? Exchange rates and transaction costs would present their usual problems, but several smallish European countries count them as prices worth paying. The political calculation seems to be, nevertheless, that this would involve more excitement than we can handle. As mentioned, the No camp doesnt much care. It has nothing to say about what its members would offer if the referendum goes against them. A sterling zone is the target presented; thats the target for a rhetorical carpet-bombing. The operation depends on a fascinating notion of relationships within these islands. It proceeds from an assertion: dont expect any help from London. In fact, you will need that plan B because London will almost certainly screw you around. George Osborne, the chancellor, has already asserted an independent Scotland would have to toe the Treasurys line. He has also doubted a rump UK would be interested in an arrangement involving inevitable compromises. Now Colin McKay, head of the Scottish Governments strategy unit has stated the obvious at a seminar in Glasgow: We cannot assert as a priori fact that we can achieve a currency union with the UK, but we can set out why we think it is the best option. For Alistair Darling, chairman of Better Together, that will do nicely. Scottish Labours Johann Lamont and Alistair Carmichael, Scottish Secretary, cannot help but agree. The failure to provide guarantees for negotiations that have yet to take place are held to be lethal to the SNPs proposals. Surely the world remembers Mr Darlings plan B when the entire banking system was within hours, by his description, of shutting down? Undaunted, the former chancellor said this week: Mr Salmonds claim a currency union is a done deal has been blown out of the water by his own head of strategy. Almost simultaneously, by sheer coincidence, Unionists on the Commons Scottish affairs committee were also calling for a plan B and knocking lumps out of the Scottish Governments White Paper on independence, a document the committee has yet to read. But that detail was no obstacle. Mr Darling has previously described a sterling area as a logical step. Was he speaking for his party and the attitude it would adopt if Labour wins the next Westminster elections? Is he saying Mr Osborne alone would be wrong to rebuff an independent Scotland? The answers have become opaque. Better Togethers only interest is in attacking the lack of a fall-back plan and in forcing the SNP to describe the unsought thing. This leaves aside the question of threats and menaces from London. Would some future chancellor really believe himself better off without a sterling zone? That would either be because he didnt trust a Scottish Government to manage its economy, irrespective of the usual pacts, or because he had no faith in Scotlands economic viability. The trouble is, smart Unionists have dropped the too poor argument. We could certainly be independent, they concede, but we would not be better for it. The irony here is that, as it happens, an independent Scotland should not touch the Bank of England with a barge-pole. That institution has not had our best interests at heart in the past. It is unlikely to discover a common purpose with a foreign government, no matter how many committee seats Edinburgh might secure. The first duty of the central bank for the rump UK would be to the rump state. Thats no basis for trust. Ian Davidson MP, chairman of the Commons committee, has done his best to make this plain. The Yes campaign, he says, cannot ignore or gloss over the risks and uncertainties that exist, the biggest of which is what the UK government and others can reasonably be expected to agree to in the negotiations. It is a strange sort of Unionism that gloats over Londons refusal to contemplate friendly co-operation, but thats no problem when you are stirring up uncertainty. Plan B doesnt have to be explained. An independent currency for an independent country is the only defensible solution. As the assaults on the SNP compromise subside, news arrives of a £4 billion investment in the Kraken field, promising 140 million barrels of oil and support for 20,000 jobs. It doesnt guarantee a future forever. But on such things a currency and a country can be built. London knows it, too. Comments Peter Piper, Ayrshire There seems to have been a step up in the assaults on the YES side, the SNP, the Scottish Government, and supporters of Independence who dare to post on forums or use other forms of electronic communication. And increasingly desperate, almost pleading cries, to state policy on subjects that will or should be, in the White Paper. My conclusion is that the Better Together campaign is frightened silly of the White Paper. Not because they expect it to be so perfectly formed there will be no possible criticisms, but because it will severely limit the reasons they have for trying to discredit and ridicule Independence. No longer will they be able to use multiple and totally inconsistent attacks on Independence, but they will have to toe the line and only attack whats there, not what they can invent as being there. This will cramp their style, and force them into some form of reality. Well, reality is what the Independence debate needs over the next 10 months. And the White Paper represents the turning point. Peter Piper, Ayrshire Derek Scott I did mean in terms of the actual debate not the result, of course :-) Angus MacRuary, Isle of Skye The whole point of negotiation is to take 2 opposing sides and .. erm .. negotiate. If you only know the position that one side is starting from then it is impossible to try to predict the outcome, and so it is with the independence debate. Without a clear position from both sides we cannot speculate on what is likely to be the final outcome. At the moment the lack of position - unless you take status quo as a position - is coming from the No side. We want more than that. Steve McKay Holyroods opening position in negotiations is a Sterling zone - but it would have to be on Holyroods terms. Scotland has options. Westminsters opening position is no Sterling zone (maybe). They have no place to go and if they prove to be unreasonable will give Holyrood the perfect excuse to opt for a Scottish currency - something many people want as soon as possible. Holyrood has the upper hand - which is why Westminster is trying so desperately to force them to weaken it. Unfortunately for Westminster they simply come across as obstructive and petulant - hardly the type of regime sensible people would choose to maintain a union with...... Dr Douglas McKenzie Steve McKay I have long felt that the currency union proposal is in fact a trap for the unionists the same way that the second question was. I, and many others, are with Mr Bell: the obvious solution is an independent currency as this gives us the most options and control. The currency can be pegged to another currency (such as sterling) if desired and it can be used as a springboard to eventual membership of the Eurozone if this was deemed to be iScotlands interest. It would mean that all fiscal and monetary tools were available to the Scottish Government. Independent countries with independent currencies is the international norm. However, by trailing the currency union option, Mr Salmond has goaded the unionists into attacking a policy that would actually benefit rUK more than it would iScotland. More importantly it forces them to indirectly make the case for an independent currency by pointing out the problem of control of interest rates being held in a foreign country. I think that the unionists are onto this ploy though, hence the rather muted attacks on a currency union: everybody is very clear not to rule it out as an option. Hence also why we are seeing increasing demands for the SNP to name their Plan B knowing fine well that the only credible alternative is an independent currency. If they can force this out of the SNP then they will attack that with venom to both undermine the case for independence but also to give them the fall back of a currency union should Yes prevail. We on the Yes side are sometimes guilty of over interpretation of signs and portents but I do think we are seeing evidence that the No campaign are wakening up to the fact that the vote is going to be at least close and the consequences of independence to rUK is scaring them silly (the real Project Fear!). What I dont know is whether or not Mr Salmond is genuine in his offer of a currency union - he is certainly keen on a fraternal approach to relationships within the British Isles post an independence vote. This stance has been criticised for many years now by fundamentalists in the independence movement but has been muted because Mr Salmond is undeniably successful in advancing the independence agenda. As Steve was just saying, Holyrood holds the cards in independence negotiations despite unionist bluster to the contrary. Make too much of the difficulties of a currency union and it allows the SG to walk away. Make too little or seem supportive of a currency union and it becomes obvious that Scotland is a vital economic component of the UK and not the basket case that unionists make it out to be. So expect more demands for Mr Salmond to reveal Plan B but dont hold your breath waiting for him to do so. see more Steve McKay Dr Douglas McKenzie Couldnt have put it better myself. The Sterling zone will only be created if its to Scotlands advantage - and that is a big ask given the flexibility a Scottish currency would offer! The Yes campagn have Westminster attacking something clearly in EWNIs own interests - it is quite bizarre. The transaction costs/fuss between currencies is a red herring - Sweden, Norway and Finland all have different currencies from one another and it is a non-issue. Scotland could flourish with its own pound - or with Sterling provided it protected itself from the vagaries of Westminster economic policy.... John Souter Dr Douglas McKenzie DDM - its not the size of the dog in a fight that matters its the size of the fight in a dog. The rUKs positions is one of posture in the hope it doesnt have to fight. Once that options removed, the nose/spite/face factor will vanish. Im pretty sure Salmond is playing this one fairly cannily, just as Im sure by 2016 the Euro/£ parity will be a major factor in the negotiations. I think, between 2014 -16 all the options will be squeezed dry before any decision is made.
Posted on: Sun, 17 Nov 2013 05:38:31 +0000