People V Carmichael 9 Nov 2015

[thorbotnic]

Scotland having a lower corporation tax than england is to attract investment into Scotland versus England.

We are competing with England using corporation tax to make us more attractive to them for inward investment. It is pretty obvious shit when you think about it.

Is competition not a core tory ethos?

But suddenly undercutting your competition is a 'race to the bottom'. Hmmm have any of these clowns studied economics.

Scotland is on the economic periphery of Europe. To offer a few points off on corporation tax for coming here makes a lot of sense.

I understand the arguments about nations undercutting each other on taxes to the benefit of corporations but we can certainly shave off a few percent versus England.

They don't like this idea.

Another reason why rUK would never agree to share GBP with iScotland.

[JohnW]

Anyhoo, let's get back on topic...

http://www.shetlandtimes.co.uk/2010/11/12/letter-from-westminster-49

[Bannannan]

Anyhoo, let's get back on topic...

http://www.shetlandtimes.co.uk/2010/11/12/letter-from-westminster-49

Nice one.

[antidote]

Anyhoo, let's get back on topic...

http://www.shetlandtimes.co.uk/2010/11/12/letter-from-westminster-49

Hypocrisy at its best.

[Hertsscot]

Anyhoo, let's get back on topic...

http://www.shetlandtimes.co.uk/2010/11/12/letter-from-westminster-49

As a Kirk elder he will be familiar with Jesus parable about a log and a speck of sawdust (Matt 7.1-3)

[aaid]

Another reason why rUK would never agree to share GBP with iScotland.

Corporation tax is being devolved to NI. As far as I'm aware, there are no moves to stop them using Sterling.

[scoobydoo]

Scotland having a lower corporation tax than england is to attract investment into Scotland versus England.

We are competing with England using corporation tax to make us more attractive to them for inward investment. It is pretty obvious shit when you think about it.

Is competition not a core tory ethos?

But suddenly undercutting your competition is a 'race to the bottom'. Hmmm have any of these clowns studied economics.

Scotland is on the economic periphery of Europe. To offer a few points off on corporation tax for coming here makes a lot of sense.

I understand the arguments about nations undercutting each other on taxes to the benefit of corporations but we can certainly shave off a few percent versus England.

They don't like this idea.

[thplinth]

Another reason why rUK would never agree to share GBP with iScotland.

The currency issue deserves a thread of its own but sharing the pound was the correct approach going into the referendum IMHO.

The problem was not that strategy, it was that it never got even a remotely fair hearing. It was a set up all the way. Of course they said no and lied about what would happen... knowing full well for the SNP to say ok then we'll do our own currency this would provide even more opportunity for scaring people...oooo new currency, 1930's germany... on and on.

The truth was and is we have as much right to use the British pound as our British partners. Or what are we then?! Partners in a union or just a cheap client state franchise. No need to answer.

[thorbotnic]

The currency issue deserves a thread of its own but sharing the pound was the correct approach going into the referendum IMHO.

The problem was not that strategy, it was that it never got even a remotely fair hearing. It was a set up all the way. Of course they said no and lied about what would happen... knowing full well for the SNP to say ok then we'll do our own currency this would provide even more opportunity for scaring people...oooo new currency, 1930's germany... on and on.

The truth was and is we have as much right to use the British pound as our British partners. Or what are we then?! Partners in a union or just a cheap client state franchise. No need to answer.

You're partners in the union... Until you leave the union. Then you're not any more.

[thplinth]

You're partners in the union... Until you leave the union. Then you're not any more.

That is like saying one person is in the marriage. Until you leave the marriage. Then you're not any more.... ehhh in the marriage? Aye good luck with that in court. edit: We are not some junior partner to you where you own the pound and where we need your permission to use it it. (sorry touchscreen edit nightmare)

Edited December 12, 2015 by thplinth

[thorbotnic]

That is like saying one person is in the marriage. Until you leave the marriage. Then you're not any more.... ehhh in the marriage? Aye good luck with that in court. edit: We are not some junior partner to you where you own the pound and where we need your permission to use it it. (sorry touchscreen edit nightmare)

International law isn't, for some reason, actually the same as divorce law.

[Dave78]

International law isn't, for some reason, actually the same as divorce law.

Presumably you can cite similar cases where this 'international law' has applied in a comparative situation?

[DonnyTJS]

1. 'International law' doesn't really have anything to do with it.

2. Divorce law only works as an analogy in the case of who gets to keep Northern Ireland after the split.

3. A currency union without full, long-term commitment from both parties to the union would be radically unstable. It was attempted by the Czechs and Slovaks after their separation and collapsed in five weeks as financial speculators chose to bet on a lack of 1:1 koruna parity as the economies of the newly independent nations diverged. Without even waiting for this to happen, there was a run on the Slovak banks as money was shifted to the Czech republic. The alternative - Scotland using the pound without a formal monetary union - would be fine in terms of legality, but as the economic cycles of the rUK and Scotland moved out of sync, Scotland would have no say in the use of monetary levers (interest-rate shifts, 'quantitative easing', etc) that would be used for the benefit of the rUK economy.

A strong commitment to an independent Scottish pound wouldn't have been an easy sell (though Salmond's: "we'll use the Euro; I mean the Pound" wasn't exactly a massive success), but it would've shown some balls and built the foundations for a much stronger platform next time around.

Edited December 13, 2015 by DonnyTJS

[thplinth]

I think a separate currency would have happened eventually (my preferred option) but not initially. There was fukk all reason why Scotland could not continue to use the pound. In fact we were and are entitled to use it just the same as England. If the press & media had been even a tiny bit balanced this would never have been the big scare story it was. They just echoed all the fear mongering endlessly including the BBC who disgraced itself to the point of no return in Scotland. That is one organization that needs privatized yesterday. Bunch of freeloading overpaid paedo protecting kunts.

[DonnyTJS]

I think a separate currency would have happened eventually (my preferred option) but not initially.

But that was exactly the thinking behind the Koruna currency union in 1993. Unless the markets thought that the Pound would retain 1:1 value in both states come the end of the union then there would be a huge run on the Pound in whichever country they thought would have the less valuable pound. Without a massive commitment from the central bank it would have forced a collapse, as it did in the Czecho-Slovak case where Slovakia floated its own Koruna in a matter of weeks (which settled at about 14% below the Czech Koruna which actually helped the Slovak economy).

The Euro zone has been held together because of massive intervention from the central bank, but that's not because it made economic sense but because the Euro is a symbol of a political union - while a Sterling union would be symbolic of nothing of the sort. The financial markets would have a field day (see ERM).

Edited December 13, 2015 by DonnyTJS

[thplinth]

But that was exactly the thinking behind the Koruna currency union in 1993. Unless the markets thought that the Pound would retain 1:1 value in both states come the end of the union then there would be a huge run on the Pound in whichever country they thought would have the less valuable pound. Without a massive commitment from the central bank it would have forced a collapse, as it did in the Czecho-Slovak case where Slovakia floated its own Koruna in a matter of weeks (which settled at about 14% below the Czech Koruna which actually helped the Slovak economy).

The Euro zone has been held together because of massive intervention from the central bank, but that's not because it made economic sense but because the Euro is a symbol of a political union - while a Sterling union would be symbolic of nothing of the sort. The financial markets would have a field day (see ERM).

Well currencies are volatile Donny. The pound has been near parity with the dollar and also near double it in fairly recent times. The Euro has also seen a lot of serious volatility and is possibly facing some messy exits. This is not something any one nation state can control.

The birth a new currency is a little hairy however you do it and it would depend how it was handled and implemented. Countries changed to the Euro and it did not cause any great problems at the time did it.

Post Yes vote there would have been runs on the pound I am sure anyway.

[thplinth]

I think one big insight gained during the referendum is that whatever happens should we ever vote Yes England or rUK will be actively doing everything they can to make any Scottish currency and any Scottish state fail miserably.

edit: as will a good percentage of No voters.

Edited December 13, 2015 by thplinth

[thplinth]

Currency can be a real trap once you are in it. Just look at how powerless Greece was in the end to get debt relief. The Germans were able to say no and call their bluff knowing that to launch their own currency would be so risky that the Greeks could not face it. Every one knows they need debt relief but because the had the temerity to demand it they were crushed and they used the euro to do it.

Who in their right minds would ever join the euro now after seeing that happen to Greece. I would not touch it.

And this is what Project Fear did during the referendum, they shamelessly used our shared currency as a threat and to actually generate real currency uncertainty which was pretty reckless in its own right and that could have back fired badly had it been Yes. That is how desperate they were.

Edited December 13, 2015 by thplinth

[Fermer]

Currency can be a real trap once you are in it. Just look at how powerless Greece was in the end to get debt relief. The Germans were able to say no and call their bluff knowing that to launch their own currency would be so risky that the Greeks could not face it. Every one knows they need debt relief but because the had the temerity to demand it they were crushed and they used the euro to do it.

Who in their right minds would ever join the euro now after seeing that happen to Greece. I would not touch it.

And this is what Project Fear did during the referendum, they shamelessly used our shared currency as a threat and to actually generate real currency uncertainty which was pretty reckless in its own right and that could have back fired badly had it been Yes. That is how desperate they were.

agree with you here thplinth.

[Armchair Bob]

The difference between Slovakia and Scotland is that Scotland and the rUK are pretty closely matched economically. Slovakia and Czech Republic were not. However any sane analysis of independence would point towards a Scottish currency in the mid to long term. In which case even the relative similarity of Scottish and rUK economies might not be enough to protect the pound from speculators should they get it in their heads that a new Scottish currency was imminent.

[DonnyTJS]

The difference between Slovakia and Scotland is that Scotland and the rUK are pretty closely matched economically. Slovakia and Czech Republic were not. However any sane analysis of independence would point towards a Scottish currency in the mid to long term. In which case even the relative similarity of Scottish and rUK economies might not be enough to protect the pound from speculators should they get it in their heads that a new Scottish currency was imminent.

Speculators didn't wait for the Slovak and Czech economies to move out of sync or for an imminent break up of the currency union, they just piled straight in. Neither country had the will to fight for the Koruna union (using central bank intervention) because there was no longer any political union.

[DonnyTJS]

I think one big insight gained during the referendum is that whatever happens should we ever vote Yes England or rUK will be actively doing everything they can to make any Scottish currency and any Scottish state fail miserably.

edit: as will a good percentage of No voters.

I doubt that, to be honest. Scotland would be one of the rUK's biggest markets, maybe the biggest - not a good idea to ###### that up.

Edit: Just to add, currency speculation isn't controlled by governments (hence the frequent crises) and is politically neutral - the only political factor that counts is the likely willingness of governments to allow central banks to intervene to support a currency.

Edited December 13, 2015 by DonnyTJS

[Armchair Bob]

The other thing to note is most currencies are kept afloat through an alchemical mix of bullshit and unicorns. The GBP for example is horrendously leveraged. It doesn't take many folk trying to get their money out the banks for the confidence trick that is currency to be exposed.

[Orraloon]

1. 'International law' doesn't really have anything to do with it.

2. Divorce law only works as an analogy in the case of who gets to keep Northern Ireland after the split.

3. A currency union without full, long-term commitment from both parties to the union would be radically unstable. It was attempted by the Czechs and Slovaks after their separation and collapsed in five weeks as financial speculators chose to bet on a lack of 1:1 koruna parity as the economies of the newly independent nations diverged. Without even waiting for this to happen, there was a run on the Slovak banks as money was shifted to the Czech republic. The alternative - Scotland using the pound without a formal monetary union - would be fine in terms of legality, but as the economic cycles of the rUK and Scotland moved out of sync, Scotland would have no say in the use of monetary levers (interest-rate shifts, 'quantitative easing', etc) that would be used for the benefit of the rUK economy.

A strong commitment to an independent Scottish pound wouldn't have been an easy sell (though Salmond's: "we'll use the Euro; I mean the Pound" wasn't exactly a massive success), but it would've shown some balls and built the foundations for a much stronger platform next time around.

Have you been reading too many tabloids, Donny. At the time Salmond was in favour of the EURO he wasn't alone. Many other politicians and economists were advocating the same thing. Even the Tories hadn't ruled it out "when the conditions were right".

[Orraloon]

But that was exactly the thinking behind the Koruna currency union in 1993. Unless the markets thought that the Pound would retain 1:1 value in both states come the end of the union then there would be a huge run on the Pound in whichever country they thought would have the less valuable pound. Without a massive commitment from the central bank it would have forced a collapse, as it did in the Czecho-Slovak case where Slovakia floated its own Koruna in a matter of weeks (which settled at about 14% below the Czech Koruna which actually helped the Slovak economy).

The Euro zone has been held together because of massive intervention from the central bank, but that's not because it made economic sense but because the Euro is a symbol of a political union - while a Sterling union would be symbolic of nothing of the sort. The financial markets would have a field day (see ERM).

Is it possible to have a "run on the pound" in one country? I would have thought the run would be on the pound and not the country using it.