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"... and they think they can fool the public"


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In typical fashion, the SNP made huge efforts to fill the pre-conference news flow with bold tales of a new Scorridge Currency, only to resort to lies and deception when it comes to providing information about how the implementation of the new currency would avoid the country sinking into financial and economic ruin. It seems we're back to the imagineering and fantasy world the SNP occupied before the independence referendum. They've clearly learned nothing. Least of all the value of truth and the worth of honesty. And still people vote for them.

 

SNP trying to 'fool the public' separate Scottish currency would be pegged to pound

The SNP's Westminster leader has been accused of trying to hoodwink voters after claiming an independent Scotland could afford to keep a new currency linked to the pound's value. 

Ian Blackford disclosed that the Nationalists wanted a separate Scotland's currency to be pegged to sterling to prevent the value of pensions and savings being eroded. 

But Scotland's most eminent macroeconomist accused him of trying to "fool the public" as this would mean diverting tens of billions of pounds from public spending to funding currency reserves.

Professor Ronald MacDonald warned that even these huge sums would not be enough to prevent a new Scottish currency being devalued following a Black Wednesday-style assault by speculators.

The research professor of macroeconomics and international finance at Glasgow University’s Adam Smith Business School warned this would happen more quickly than the pound crashing out of the European Exchange Rate Mechanism (ERM) in 1992.

In a scathing attack on the SNP's failure to publish detailed currency plans, Prof MacDonald said it was "disingenuous in the least to keep peddling these myths."

Challenged to stipulate how a separate Scotland would pay off the balance of payments deficit, and raise the necessary reserves, the SNP refused to say.

Prof MacDonald has previously warned that Scotland would be forced to dump the pound for its own free-floating currency immediately after independence. 

He argued that Nicola Sturgeon's plan to keep the pound on a temporary basis, until a new currency was set up, was also unaffordable given Scotland's 10 per cent balance of payments deficit. 

This means Scotland imports more goods, services and capital than it exports and a separate Scottish Government would be responsible for funding the gap.

Prof MacDonald has argued the only viable option is a free-floating currency that would depreciate to make Scotland's exports cheaper to buy in foreign markets. This, in turn, would generate the foreign exchange reserves required to keep clearing the balance of payments deficit. 

Norway holds around £30 billion of foreign exchange reserves for its free-floating currency. Hong Kong, which fixes its exchange rate to the US dollar, holds around £300 billion.

Pressed after her keynote SNP conference speech last month, Nicola Sturgeon's spokesman could not say whether the party favoured a pegged or floating currency.

But Mr Blackford told LBC's Iain Dale that "when we do have our own currency, it has to be pegged against the pound sterling because we need to make sure that savers, pensioners that their interests are protected."

Professor MacDonald said: "Speculators will realise there is a potential profit and attack the currency as they did when sterling was ejected from the ERM.

"The kind of sums you would need to defend it would be many tens of billions and they would quickly be exhausted.

"These tens of billions would be national savings and they could be spent on hospitals and schools. It is the Achilles' heel of the currency proposals."

He added: "It's quite a complicated issue and they think they can fool the public. None of it adds up."

Pamela Nash, chief executive of campaign group Scotland in Union, said: “The SNP’s currency plan is now in utter chaos."

An SNP spokesman said that "one-to-one pegging with sterling would make sense for the short and possibly medium term, which is included alongside the six currency tests which were overwhelmingly endorsed at the recent SNP spring conference.”

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9 hours ago, Bill said:

What is it about May? One year ago today another shallow lie was fabricated.

May had her issues but lies of all shapes and sizes ate more Johnson's stock in trade.

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An independent Scotland could only use sterling in the same way Panama uses the US dollar.

rUK would never allow Scotland to use sterling & have the Bank of England as its central bank/LOLR because it would not be willing to guarantee iScotland’s annual deficits and resulting debt.

The SNP are just a bunch of chancers & snake oil salesmen by suggesting otherwise 

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1 minute ago, RANGERRAB said:

An independent Scotland could only use sterling in the same way Panama uses the US dollar.

rUK would never allow Scotland to use sterling & have the Bank of England as its central bank/LOLR because it would not be willing to guarantee iScotland’s annual deficits and resulting debt.

The SNP are just a bunch of chancers & snake oil salesmen by suggesting otherwise 

Bang on!

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