The discussion that was organised by the Scottish Currency Group that addressed this issue last Sunday has now been issued as a YouTube video:
Those participating in the discussion overwhelmingly supported the idea.
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It appears that of the 60 countries that have become independent from the UK, starting with the US in 1776, they all have central banks so maybe that provides the answer.
https://empoweryourknowledgeandhappytrivia.wordpress.com/2016/07/12/how-many-countries-have-gained-independence-from-the-united-kingdom/
🙂
What a breath of fresh air to listen to such an informed and lucid discussion makes me feel how impoverished discussion is in England . I like the idea of a people’s assembly , if only to counteract the inevitable lazy commentary in most of the English dominated media.
have you seen any of the videos? The meetings are live-streamed and then recordings placed for all to watch any time. I prefer that as the ‘gaps’ are removed.
It is good to see the process. I believe Ireland also encouraged those not invited to participate in theirs to watch.
The Scottish Assembly has naturally been delayed in concluding, but all the records, documents and videos, are on their website.
https://www.citizensassembly.scot/meetings
When I ventured to suggest that Scotland might have some fiscal problems you dismissed me out of hand.
May I just say, en passant, that you gave a good performance last night and I was particularly reassured to see that your shortness with those who question you is not confined to me. So here I am again.
https://www.ifs.org.uk/publications/14982 is the IFS report on Scotland’s “deficit,” which happens to coincide with my own; however the IFS does carry more economic weight than me.
“Figure 1 shows that Scotland’s implicit budget deficit has been consistently higher than that of the UK as a whole since 2012-13, with the gap amounting to between 5% and 7% of GDP every year since 2015-16.”
Perhaps, when you get a moment, you could explain why you are right and the IFS is wrong.
This is based on GERS which quite specifically says it is not suitable as a basis for appraising the situation of Scotland post-independence
I have explained endlessly on this blog which I think that is the case and have not got time to do so again now
The blog can be searched – on the site or via Google (which I tend to prefer)
It’s interesting that there isn’t an annual GERS report equivalent for England, Wales or Northern Ireland. Since the allocation of debt within GERS is dictated by London, I suppose not having these UK wide reports would make it easier to impose GERS (gu)estimates onto Scotland. But there is another reason that explains why only Scotland has a GERS report and one that comes straight from the horses mouth (Conservative Secretary of Scotland Ian Lang in 1992 when GERS was created) – see key fact 2 on link below. GERS was and always has been a political exercise and not an economic one.
https://wingsoverscotland.com/the-six-key-facts-about-gers/
Speaking of reports, given that it’s now 4.5 years since the Brexit vote and only 3.5 weeks until the UK leaves the EU for real, has the UK Government actually produced any reports for how they see the UK will fare post Brexit? We know that others such the OECD have –
https://www.taxresearch.org.uk/Blog/2020/12/02/how-bad-is-the-uks-economic-situation-very-bad-according-to-the-oecd/
GERS is rubbish as Richard says, but I would suspect that the Scottish Government (not Scotland – you make the classic error of talking about the country when you mean the government) may well have a deficit in the first year or two of Indy of 8% or more of GDP. That is a good thing and simply reflects the investment needed to get the new ministries and departments, agencies etc built, staffed and running. Some of that, of course, is money returning from Westminster given we pay for a lot of rUK civil servants. We also need to get the GND off the ground and I think Richard reckons we should be spending S£5-10 billion pa on that for maybe the next 20 years. All of that will lead to a significant increase in GDP (and useful GDP as opposed to destructive cannibalisation of the environment, etc). Is that a problem? No, and a combination of an overdraft with the Scottish Reserve Bank and selling bonds in S£ to Scots (and maybe re-directing ISAs as Richard proposes) mean there is no issue with financing. As Scotland will start life with very little National Debt / Savings there is also a need to issue bonds to provide a safe home for funds being repatriated after selling rUK bonds by Scottish pension funds and the like. As the economy improves then the government deficit will reduce towards zero deficit and full employment.
Thank you, Richard. The IFS report is in fact based on GERS data and they have this to say about it: “The figures have proved contentious, but while subject to a degree of potential measurement error, their status as National Statistics means they have been independently assessed as being based on sound methods and being produced free from political interference.”
I’m not evangelical about this and do not have a vote on the matter. However, I do feel that if I did, I would want to know how a newly independent Scottish government would turn a 7% deficit into a balance budget that would pass international examination. I hear what you say about MMT not being a forecasting tool and my own view is that until some tools are developed for it, MMT will remain a very interesting paradigm. Indeed, until I became interested I had no idea how much largesse we were heaping onto the bankers.
Mr Byrne,
I suggest that instead of reading the IFS telling you about GERS you read the detailed methodology report for GERS. It is available online. Points to note include:
1) Relatively little is based on real data that records the Scottish income or expenditure. There is an extraordinary reliance on surveys, estimates, population shares etc. This would be unacceptable to any rational observer, if it was not for the fact that since the data is not being kept and recorded for Scotland (and for many sources no effort has been made over decades to correct this, but only to refine the estimates) and therefore its most powerful justification is the crude fact that otherwise there is no other way to produce GERS.
2) There are amendments made to the calculations each year, which means there are prior year adjustments, not easy to see, and the information history is not easily comparable. Therefore you cannot really look back over the audit trail of past GERS and provide a comprehensive historical picture. Over the period these amendments are significant, but there is never any acknowledgement of the degree of continuous correction involved. This correction has only happened because public scrutiny of what GERS produces has increased. It remains a bad system; nobody would advise doing it this way, if starting afresh. They should start afresh – and do it properly.
3) GERS is only produced for Scotland. This means you cannot look at the totals and reconcile with a consolidated position for the UK as a whole. We can see from some of the information produced that the figures probably do not reconcile on consolidation. The fact that GERS is not replicated for all four UK nations inadvertently reveals its purpose; it is principally political. For example, oil and gas is not so significant now, but for most of GERS history it was vary significant; so for many years oil and gas were hived off and allocated to an abstract UK offshore twrritoral waters account, solely to ensure the vast resources were not allocated to Scotland.
4) GERS is Government Revenue and Expenditure, it does not provide proper insight into the Scottish economy. This message is quite calculatedly lost in translation.
I make no claims about what Scotland’s deficit maybe; I have no idea, and that is solely because the information is, frankly unsatisfactory. It is astonishing that an advanced sophisticated economy like Scotland knows so little about itself; and allows statisticians, and not real data to establish critical, basic facts.
Thanks John