It seems that the rest of the UK has now woken up to the real possibility of Scotland voting for its independence. And suddenly, the penny has dropped: the UK depends on Scotland not just for ‘self-esteem’ but for its value to the exchequer. Even the Queen is ‘horrified’ by the prospect of independence, we are told.
And with another day, more devaluation of the pound this morning. The money markets want Scotland to stay – or rather, they want the pound to be propped up by Scottish inputs from oil and gas, manufacturing, exports and taxation. As I suggested previously on this blog, it underlines the self-harming stupidity of the UK government’s stance on a currency union.
Barclays said in a research note that the vote for independence was just “the opening chapter”.
“[There will be] uncertainty over issues ranging from the timelines for political and economic independence, resultant institutional frameworks, lender of last resort for Scotland, the division of assets and liabilities, fiscal impact and policies, and what currency choices Scotland will have available and choose,” it wrote.
The BBC’s economics editor Robert Peston said that “the longer the uncertainties persist, the more prolonged the UK will suffer from an elevated cost of finance, and the greater the harm there will be to economic growth – both sides of the border.”
Responding to news that the pound has fallen in value this morning, Deputy First Minister Nicola Sturgeon told the BBC:
“It’s not unusual in political campaigns, or indeed on budget days, for the value of the pound to fluctuate. I think that would suggest that the financial markets see Scotland as a strong economy.
“But, of course, we’ve made very clear that we want to continue with a currency union. If the UK government was prepared to sit down with the Scottish government today, we would do that and it would be within our powers jointly to give reassurance there.
“It is the UK government that’s creating the uncertainty by refusing to have those sensible discussions.”
The prize is a better country for the people of Scotland. And that’s only 9 days away.