[Closed] Osbourne says no to currency union.

[quote=muddydwarf ]Because, saying 'if you don't give us a currency union then we'll refuse to pay the part of the National Debt we incurred' will be seen as a technical default by the markets, that's not a healthy position for a newly-minted Nation to be in.
Scotland may not have inherited an actual, physical debt, but by refusing to contribute to the debt of the rUK it will be seen by investors to be untrustworthy.Surely it will only be deemed untrustworthy if there is no good reason for [i]not[/i] contributing? If the reason is that iScotland wasn't given a fair share of the assets then no one would expect them to contribute all of their part of the historic debt. Quid pro quo and all that.

Very that analogy try again.

Now in a Free Yorkshire tha'd pay Nowt for owt.

Was you born in Englanfshire

Edit, spelling, to much Pure North

They have a bit of a tiff and the 10% guy runs off with 10% of the car and refuses to meet the remainder of his obliged payments.

Bingo - that's why it's not a technical default because we'd be leaving that 10% of the car behind. We'd stop paying for our part of the loan, but we'd not be taking 10% of the car. Mr 90% can't afford the repayments for 90% of the car - maybe he should do his best to keep on good terms with Mr 10% so that he can afford to make the repayments.

Or a different way of putting it - it's totally different because Mr 90% has used his size and weight to try and bully poor wee stupid Mr 10% into leaving the 10% of the car behind. Not really fair to ask Mr 10% to continue to pay if he has no access to the car now is it?

Surely it will only be deemed untrustworthy if there is no good reason for not contributing? If the reason is that iScotland wasn't given a fair share of the assets then no one would expect them to contribute all of their part of the historic debt. Quid pro quo and all that.

Seems a reasonable position, but you are gambling that the people you want to lend you the money have the same definition of 'good reason'.
THM and others seem to be suggesting that the people with all the money to lend won't agree with your definition of an asset.

Scotroutes - i agree, and i doubt Scotland will NOT get a decent and fair shair of the assets.
But the Currency Union isn't on the table, no matter how the SNP/Yes Scotland posture and bluster, threatening not to pay towards that debt, it will not happen due to the extremely strong public views on it in the rest of the UK.
No one really wants to deny Scotland a fair share of assets but we aren't going to risk our pensions etc to prop up what will be a competitor State.
You wouldn't do it, why should you expect us to do so?

Wanmankylung, what you appear to be unable to digest is the fact that Scotland would be incredibly weak in the post yes negotiations, she wants a great deal from the rUK. The most fundamental and looming thing is that iScotland wants HMRC to continue collecting its taxes (indeed it doesn't even have its own database of taxpayers, assets, land registration etc) Without being able to collect taxes any modern country would quickly fall apart.

An independent Scotland, in the hypothetical situation we're discussing of defaulting (technically, morally or otherwise) on the debt, even if it was allowed independence (which remains in the gift of the UK parliament) could end up with no assets apart from those fixed in Scotland, no transitional services from UK institutions, an angry southern neighbour (with a Veto on it's EU membership) and a very bad image to the international markets.

If you think that situation is a bargain then fair enough, but from my perspective it would cripple iScotland from the outset.

ninfan - Member
Wanmankylung, what you appear to be unable to digest is the fact that Scotland would be incredibly weak in the post yes negotiations, she wants a great deal from the rUK. The most fundamental and looming thing is that iScotland wants HMRC to continue collecting its taxes (indeed it doesn't even have its own database of taxpayers, assets, land registration etc) Without being able to collect taxes any modern country would quickly fall apart.

An independent Scotland, in the hypothetical situation we're discussing of defaulting (technically, morally or otherwise) on the debt could end up with no assets apart from those fixed in Scotland, no transitional services from UK institutions, an angry southern neighbour (with a Veto on it's EU membership) and a very bad image to the international markets.

If you think that situation is a bargain then fair enough, but from my perspective it would cripple iScotland from the outset.

The negotiations would be based upon a whole pile of things. Debt and currency would only be two of those.

rUK's position is no on currency. Scotlands position may be no to debt. There may be many other things which would need to be negotiated. You have to look at the bigger picture.

Dont overlook the cost of setting up Scotlands version of the HMRC, DVLA, Passport agency, Highways agency, etc... which wont be cheap. In order to fund this either Scotland will have to borrow from the financial markets (and its going to need a central bank to do so) or come to some compromise with rUK over a settlement figure.

Do Scots really think the rUK would let them get away with not paying any of the debt? After independence they will be told what to pay and then they will do it. They will not all of a sudden gain the ability to stand up to the English. After all they have just spent the last 300 years having everything done for them by us, it takes time to learn to stand on your own two feet boys.

[quote=whimbrel ]
THM and others seem to be suggesting that the people with all the money to lend won't agree with your definition of an asset.
Oh well, if THM says that's true then it must be 😆

Seosamh77 - which part precisely would you like to take issue with ?

Is it my opinion that Scotland needs HMRC to continue collecting its taxes? It even says it in the White Paper

[i]There will be a transition phase after independence where, by agreement with HM Revenue & Customs, taxes would continue to be collected through existing HMRC systems.[/i]

😀

Under your anology Wanman, who does the bank manager blame and who will he be v reluctant to lend to again. Simple isn't it?

Wanman, I suspect a multi here?!?

Oh well, if THM says that's true then it must be

Glad, you are getting it.

Ninfan, quoting yS/FC stuff back to nats is clearly a waste of time. Just go back to the nice wee currency option graphic a few pages back and spot the missing option. The one that NW was trying to suggest (even more pages back)was given real consideration is conspicuous by its omission. Funny that.

See no evil etc......

fasternotfatter - Member
Do Scots really think the rUK would let them get away with not paying any of the debt? After independence they will be told what to pay and then they will do it. They will not all of a sudden gain the ability to stand up to the English. After all they have just spent the last 300 years having everything done for them by us, it takes time to learn to stand on your own two feet boys.

but we'd not be taking 10% of the car

It's not a perfect analogy by any stretch, I could have used 2 fat people taking out a lone to buy a huge cake that they eat up front. That would have been better.

The cash has already been spent on an asset that has been irretrievably consumed, and the liability for furnishing the debt remains.

You could argue that the bank manager was a fool for allowing a loan to buy a big cake, but if they'll pay an acceptable rate of interest and the risk looks good, what the hell!

what you appear to be unable to digest is the fact that Scotland would be incredibly weak in the post yes negotiations, she wants a great deal from the rUK.

I am perfectly capable of judging for myself how strong or otherwise my country would be during negotiations. My opinion differs from your somewhat. Fair and equitable remember....

indeed it doesn't even have its own database of taxpayers, assets, land registration etc

Surely HMRC would be an asset to be shared if things are to be fair and equitable...

no assets apart from those fixed in Scotland, no transitional services from UK institutions

Ooh oooh ooooh - here comes fair and equitable again...

with a Veto on it's EU membership

an angry southern neighbour

[quote=unklebuck ]
The cash has already been spent on an asset that has been irretrievably consumed,
Except that it hasn't and so your analogy falls apart

scotroutes - Member
whimbrel »
THM and others seem to be suggesting that the people with all the money to lend won't agree with your definition of an asset.

Oh well, if THM says that's true then it must be

As I said, it appears to be a gamble.
Interesting times in the event of a Yes.

Under your anology Wanman, who does the bank manager blame and who will he be v reluctant to lend to again. Simple isn't it?

My mother getting a loan analogy? He blames my mother obviously because I've never been into the bank and he may not even know that I exist.

Except that it hasn't and so your analogy falls apart

I was referring to just the cake, to keep it simple.

ninfan - Member
Seosamh77 - which part precisely would you like to take issue with ?

Is it my opinion that Scotland needs HMRC to continue collecting its taxes? It even says it in the White Paper

There will be a transition phase after independence where, by agreement with HM Revenue & Customs, taxes would continue to be collected through existing HMRC systems.

here's another one that thinks the empire still rules the world!

A country with the 6th highest GDP in the world vs a country that will be as relevant on the world stage as the republic of Ireland. You are going to be small for a very long time 🙁

It's not a perfect analogy by any stretch, I could have used 2 fat people taking out a lone to buy a huge cake that they eat up front. That would have been better.

Is the cake loan in the name of one person? Well that person had better play nice with the other one if the dont want to default on their cake loan payments.

My mother getting a loan analogy? He blames my mother obviously because I've never been into the bank and he may not even know that I exist.

But you've said a lot of things on the TV that the bank manager has seen and makes him a bit worried.

Surely HMRC would be an asset to be shared if things are to be fair and equitable...

ah, so you're not [i]actually[/i] leaving behind the car, you want to be able to take the wheels do you 😆

As I said, it appears to be a gamble.
Interesting times in the event of a Yes.

There are so many unknowns around a Yes vote that no one really knows what they are voting for.

It seems like a very big gamble.

[quote=ninfan ]Surely HMRC would be an asset to be shared if things are to be fair and equitable...
ah, so you're actually not leaving behind the car, you want to be able to take the wheels do you Of course. We're even prepared to pay for them.

Where does all this "we have been paying for 10% of everything come from? You have been paying 10% and getting at least 9% back. Don't spend your 1% all at once boys.

That is a very patronising and foolhardy way to view investors.

But I was referring to the 90/10 one but it's the same thing. Is confidence that low that you think investors have never heard of Scotland? I know it's desperate when your man is well and truly caught with his pants down but the level of desperation now being reached is genuinely pathetic for a wonderful place like Scotland. Very sad.

ah, so you're actually not leaving behind the car, you want to be able to take the wheels do you

Nah - i'll pay for the parts that I take. As I've always said that I would. I'll even take some parts that I have no use for - just to be fair.

There are so many unknowns around a [s]Yes[/s] No vote that no one really knows what they are voting for.

So long as Scotland has a healthy economy and is able to pay its way, it will have no problem borrowing money one way or another if it "defaults" by reneging on its portion of the debt. Investors are an endearing combination of greedy, forgetful and optimistic.

Believing that somehow the sky over Scotland will fall in is delusional.

But I was referring to the 90/10 one but it's the same thing.

The bank manager will pursue the person whose name is on the credit agreement.... You should know that.

Believing that somehow the sky will fall in is delusional.

Exactly this. ^

Former prime minister Gordon Brown has appeared alongside Alistair Darling to call on Scottish voters to reject independence.

That's a ****** dream team right there. 😀

Nah - i'll pay for the parts that I take. As I've always said that I would.

Fine, we've got a deal - that'll be 100 billion quid please 😈

There are so many unknowns around both the Yes and No votes that no one really knows what they are voting for.

FTFY 🙂

Wanman, the analogy soon falls flat when you apply it to the EU. Imagine the bank happened to be Deustche bank or BNP Paribas. Are you still assuming that he won't have recognising you as part of the party then!!! Sorry we only allow entrance to those whose name is on the membership card. Remember that!!! 😉

Desperate times indeed. C'mon the must be a better argument than that - is is important after all.

There are so many unknowns around a [s]Yes[/s] No vote that no one really knows what they are voting for.

FTFY.

Errrr, a No vote will broadly keep things similar to as they are now (not perfect, but you know where you are)

Yes just sounds like chaos.

I think wanmankylung is an alt. We've had x number of pages of ludicrous, unthinking nationalist pish, and then suddenly he's posting as though there are some cogs turning. No t that I agree with him/her, but it's a welcome change

Errrr, a No vote will broadly keep things similar to as they are now (not perfect, but you know where you are)

The Scottish language has that rarest of things - the double positive - it applies here and goes something like this: Aye Right.

Imagine the bank happened to be Deustche bank or BNP Paribas. Are you still assuming that he won't have recognising you as part of the party then!

You are going to be small for a very long time

I'm not sure many actually give a **** tbh.

I don't.

fasternotfatter - Member
Do Scots really think the rUK would let them get away with not paying any of the debt? After independence they will be told what to pay and then they will do it. They will not all of a sudden gain the ability to stand up to the English. After all they have just spent the last 300 years having everything done for them by us, it takes time to learn to stand on your own two feet boys.

The arguments are certainly very confused - multiple users??

Anybody can invest in government bonds and you have to say who do you invest your money with people who pay there bills or people that have a history of not paying them? If you have a bad reputation then you have to pay more interest making borrowing more expensive. All of a sudden threatening to not take on any UK debt doesn't look so good.

Where does all this "we have been paying for 10% of everything come from? You have been paying 10% and getting at least 9% back. Don't spend your 1% all at once boys.

Hahahahaha. Have a wee think about that. First of all you've just said that Scotland is subsidising rUK. Secondly you're assuming that the 10% has been pissed against the wall and hasn't bought anything. Thirdly you're assuming that everything that the 10% or 1% whichever figure you want to use has not paid for anything in the rUK.

Try again when your brain is working.

teamhurtmore - Member
The arguments are certainly very confused - multiple users??

Ah,more little Englander pish.Longs for the days when the butchers apron hung over half the world.

Do you long for the days when Scotland had an empire, oh dear that didn't quite work out for you did it. Darien scheme anyone? 🙄

Never let patriotic drum banging get in the way of interesting discussion 😆

The arguments are certainly very confused - multiple users??

One user. Show me the confused arguments please - mine that is, not yours because I know exactly where yours are. Pg 1-255 of this thread.

Can I have an answer to the question I've been asking all night. How can Scotland default on a debt that it is not liable for. A refusal to answer the question directly will be taken as proof that it can't....

Hahahahaha. Have a wee think about that. First of all you've just said that Scotland is subsidising rUK. Secondly you're assuming that the 10% has been pissed against the wall and hasn't bought anything. Thirdly you're assuming that everything that the 10% or 1% whichever figure you want to use has not paid for anything in the rUK.

Try again when your brain is working.

England more than pays for its way. Wales and northern Ireland now that is another matter all together. Now you could go and ask them for the 1% that you have been subsidising them.

It's very simple and has been explained many times, Dont confuse your inability to understand with a refusal to give an answer.

Even your side gets it, so anyone playing the "ignorant card" is either failing or is Alex Salmond himself. Surely not?

A little poser for you to dream on. In the event of a split, does the end investor in outstanding UK debt, still have any exposure to iS (- clue think indirect). If your answer is NO, then stay clear of applying for a job in debt capital markets for an iS! Or indeed any financial role.

@wan, you need to think of the debt as paying for the roads, hospitals, police cars etc you have plus a portion of the salaries, welfare benefits received already by your fellow Scots as the UK runs a budget deficit so borrows to pay the bills.

I think agreeing a currency union would be closer to political suicide than declining one for any Westminster government. If Scotland does vote Yes I think there is more likelihood of a degree of animosity from the UK population than a wish of Bon Voyage, so the Westminster government is going to be negotiating with that as a backdrop.

Scotland will find it difficult to borrow in a currency it doesn't control/cannot "print", if it does walk away from its share of the UK debt this will be many times more difficult again. It won't be impossible, there will be a price but it will be a high one.

It's very simple and has been explained many times, Dont confuse your inability to understand with a refusal to give an answer.

So you're still refusing to answer a direct question. That must mean that you have no answer. Thought not.

To answer your question - yes. As you say, the end investor is indirectly exposed to Scotland. The thing that makes it indirect is that it is rUK that is increasing the risk (not Scotland) to them by saying "you're ok Scotland we've got this extra ~£100Bn covered."

you need to think of the debt as paying for the roads, hospitals, police cars etc you have plus a portion of the salaries, welfare benefits received already by your fellow Scots as the UK runs a budget deficit so borrows to pay the bills

But I prefer to think of it as paying for illegal wars, trident, bailing out banks, pursuing god awful foreign policy, giving MPs pay rises and all that sort of shit.

Well you are getting closer, if not fully there. Slow progress, but progress nonetheless. Early start tomorrow. Keep reading, we will get there in the end. Tip - just avoid anything said by the DO as it deliberately muddies the water.

Sleep well. Entertaining confusion at least!!!

(Chapter 8 as you know is a good start.)

no debt = £100 billion less in assets and less assistance in becoming truly independent from the UK. You can't collect tax, issue passports or new driving licences until 2020 at the earliest. We can cut you off from day one if you want?

Well you are getting closer, if not fully there.

I fully understand what you are saying. What you have failed to grasp is that I have spent my evening attempting to drill down through the levels to see if you have an answer which is based on fundamental economic concepts and reality. I wanted to see how deep your understanding of the subject actually is. You have not got beyond the "it's a debt, you took some of it out, but it's in my name therefore you can technically default on it." I get that bit, I get why you're saying it. BUT and it's a big but - your knowledge, at least the part that you've shown, goes no further or deeper than that. You have said what you think many times over. You have been unable to tell me WHY. The absence of why shows that you do not know if your opinion is correct.

Why? Why? Why? Why? is the most simple and effective debating technique in the book. I thought you would have realised that.

Yep, only spent 20 years working in the field* so excuse me for not knowing what I am talking about.

* including raising debt for countries and advising them. Amazing what little understanding you can get away for such a long time, hey?

I bow to your greater understanding and retire to the dunces corner. Good luck with Ch 8, you will find it as weak as my understanding though, so go easy on the authors. They are on your side after all.

Amazing what little understanding you can get away for such a long time, hey?

[img] [/img]

And on that note good night it has been a pleasure.

I am not sure "technical default" is the correct term to use because this tends to refer to defaults other than payment default under the term of the loan. However, when talking about borrowers and assessing them, the universal term lenders use is what is the strength of the borrower's "covenant", an old fashioned term for promise - i.e. can we trust them - partly this is a question of financial factors and the remainder is how they conduct themselves when issues arise (especially with a sovereign borrower who would not be able to be sued in their bankruptcy court). By walking away from its obligations for no reason (lack of currency union would not be considered a sufficient reason as it is not an asset merely a unit of exchange) Scotland's covenant would not be looked upon well with a consequent cost when they sought funding from international lenders.

Finally an answer to the question that makes sense. Thank you mefty.

Well you can dress it up in as fancy language as you like, but doesn't this equate to you acknowledging "threaten to not pay your share, and you're shafted if you think we'll lend to you with reasonable rates"?

There is no fancy language. It was perfectly clear and provided an accurate answer.

doesn't this equate to you acknowledging "threaten to not pay your share, and you're shafted if you think we'll lend to you with reasonable rates"?

By walking away from its obligations for no reason (lack of currency union would not be considered a sufficient reason as it is not an asset merely a unit of exchange) Scotland's covenant would not be looked upon well

Not sharing assets would however be considered a reason, probably considered a very good reason too.

I know it's difficult to comprehend that politicians might act like adults when negotiating a split, but we must live in hope.

seosamh77 - Member
...here's another one that thinks the empire still rules the world!

Dinnae fash yersell. They dinnae hae any planes fur yon deathstars... 🙂

It is dressed up in fancy language, which I had rather hoped I translated, because the fundamental principles of finance don't change. If anyone wants to understand the fundamental principles of central banking, they should read "Lombard Street" by Walter Bagehot written in 1873.

What is Revenue Scotland?

Revenue Scotland will be the new tax authority for Scotland’s devolved taxes.

Initially it has been set up as an administrative unit of the Scottish Government but in due course will be established in statute as a non-Ministerial Department to operate at arm’s length from Ministers - in line with international good practice for tax administration.

Revenue Scotland will oversee the collection of Scotland’s devolved taxes with the assistance of Registers of Scotland and SEPA.

Why do we need Revenue Scotland?

The Scotland Act 2012 delivered more powers to the Scottish Parliament including the power to raise taxes on land transactions and waste disposal to landfill. The Act also provides powers for new taxes to be created in Scotland, where this is supported from both Scottish and Westminster Parliaments, and for additional taxes to be devolved from Westminster.

From April 2015 the existing UK Stamp Duty Land Tax (SDLT) and Landfill Tax will cease to apply in Scotland. The Scottish block grant will be adjusted to reflect this loss in income.

Scottish Ministers have decided to use the newly devolved powers to introduce taxes to replace this income. These are:

Land and Buildings Transaction Tax (LBTT) to replace SDLT;
Scottish Landfill Tax (SLfT) to replace UK Landfill Tax.

Legislative provision is needed for the collection and administration of these new taxes. This is through the Revenue Scotland and Tax Powers Bill, which was approved by the Scottish Parliament on 19 August 2014. The Scottish Government has established Revenue Scotland to administer the devolved taxes, working with Registers of Scotland (LBTT) and SEPA (SLfT).

What is Registers of Scotland?

Registers of Scotland is a non-Ministerial department. The Keeper (and Chief Executive) of Registers of Scotland is responsible for compiling and maintaining 17 public registers, the largest of which are the two property registers, the Land Register and the Register of Sasines.

There is a link between payment of SDLT/LBTT and registration in the land registers as there is a requirement for the appropriate land tax return to be submitted, and arrangements made for payment of the tax, before Registers of Scotland will accept an application for registration of title.

Registers of Scotland has experience of working with HMRC to administer SDLT and will work with Revenue Scotland to operate the LBTT process.

I know it's difficult to comprehend that politicians might act like adults when negotiating a split, but we must live in hope

I'm quite happy for them to behave like adults.

in an adult discussion CU has only marginal positives for rUK and significant downsides. The adult view is that it is something that shouldn't be entered into by rUK and iS as it won't work for either.

The adult negotiation will be then be about the rest of the transitional aspects, if you are not adult (refuse to recognise any share of the national debt) the "adult" thing for rUK to do is to claw the equivalent liability back from other aspects such as holding onto tax revenues etc until the matter is settled, as long as rUK acts reasonably and proportionately they are being "adult"

konabunny - Member
The Yes campaign isn't 50% of Scots or anything like it. It's a small group of people with whom possibly around 50% of the electorate agree.

We understand what representative democracy is.

Have you worked out what is remarkable about the graphic you posted earlier Konabunny?

Look at the general election results - you have to go back to 1964 to find an election where Labour didn't get more than twice as many seats as the next party.
Same with Scottish local elections - the SNP's massive rise in the last decade excluded, Labour usually has more than double the number of seats of the next party.

a one party state

ahaha ahagagahah ahagagahah ah 😆

If MrsTs week continues as it has then I really do have concerns about voting YES 🙄

So lets see what other people thought about the 2007 election.

SNP wins historic victory | UK news | theguardian.com

The SNP has surged to historic victory over Labour

The SNP secured a historic victory in the Holyrood elections, ending Labour’s 50-year domination of Scotland’s political map.

zevon [/url]

So will iScotland be able to secure a CU?? Yes or No !!! This seems to be the central question of the campaign. All I've heard about is debt, and cake, mmmm cake! there must be other bargaining positions?

So lets see what other people thought about the 2007 election.
SNP wins historic victory | UK news | theguardian.com

The SNP has surged to historic victory over Labour
BBC news
The SNP secured a historic victory in the Holyrood elections, ending Labour’s 50-year domination of Scotland’s political map.
The Scotsman
Funny Konabunny all these folk seem to disagree with you ... warren zevon has some advice for you

Labour has run Scotland, from the MPs down to local councils, as a one-party state for decades

😆

If MrsTs week continues as it has then I really do have concerns about voting YES

❓

fasternotfatter - Member

Do you long for the days when Scotland had an empire, oh dear that didn't quite work out for you did it. Darien scheme anyone?

Oh and the Darien scheme an empire? That must make my garden at least a county.

Hmm, anyone else think that the main tactic of the No campaign. Especially over the next two weeks is to generate as much conflicting/confusing noise so that those still unsure will remain unsure. With the theory being that the uncertain will vote to retain the status quo?

How much have they spent on unpublished public opinion research now? And there still banging the fear of uncertainty drum.

Not that Yes are immune to a good bit of fearmongering.

@futon No. It's not sufficiently in the UKs interest to agree to one, there is too much potential downside. IMO UK knows that if it doesn't agree to a currency union Scotland with either use GBP anyway, a Scottish pound pegged to the GBP or the euro. All of these are fine from a trade perspective and cost to the UK is very low/zero. Scotland is the one who really needs a CU as they haven't budgeted/planned for a central bank, they have a large number of businesses (like financial services) which are GBP based and not having the GBP means the euro is certain.

Scotland will take it's share of the debt, the no debt position is political posturing and playing the crowd.

100bn bribe isn't big enough then? What other levers have they got?

I want to hear what the YESSERS think, and 'I don't care, we'll be ok' doesn't cut it! Will Salmond be able to secure CU with his mandate?

konabunny - Member

apparently you don't, champ. a referendum isn't representative democracy, it's direct democracy.

Oh and the Darien scheme an empire? That must make my garden at least a county.

Don't forget you lost Nova Scotia as well 😀

http://m.scotsman.com/news/politics/top-stories/scottish-independence-carmichael-to-quit-if-yes-1-3523006

The rats are preparing to desert the sinking ship. 😆 i thought it was one of the funniest parts in the debate the other night when salmond offered darling the same. He looking like a wee puppy begging for a stick! Not a good look for the no camp! 😆