Sunday, 16 February 2014

So who else can't use the pound?

Here's just a little sample of the different news articles that have appeared since UK Chancellor George Osborne's speech regarding a Sterling Zone:
   
"Three main political parties unite to deny a separate Scotland the pound" - The Telegraph
"Britain warns Scotland - Forget the pound if you walk away" - Reuters
"Alex Salmond no longer has the pound in his pocket" - The Guardian
"Scots lose pound if they vote 'yes' to independence in September" - Russia Today
"Scotland likely to relinquish the pound" - Liberty Voice
"Independent Scotland would have to leave pound" - Yahoo! News

  
Each of these headlines are wrong. The pound is a freely convertible currency which anyone can use. This was the point of our blog 'Ten a Penny - Westminster's Current Currency Threats" and again in "Rule it out!". But to prove beyond doubt that any nation, even those which has declared themselves independent from Westminster, can use the pound if they wish, here is a list of some of the countries which have done just that at some point during the last 75 years.
 
File:Flag of the Federation of South Arabia.svg
Aden - Federation of South Arabia
File:Flag of Bahrain.svg
Bahrain
File:Australian Flag with Aboriginal Flag.svg
Australia

File:Flag of Sudan.svg
Sudan
File:Flag of the Bahamas.svg
The Bahamas

File:Flag of Cyprus.svg
Cyprus

File:Flag of Fiji.svg
Fiji
File:Flag of Hong Kong.svg
Hong Kong
File:Flag of Ghana.svg
Ghana

File:Flag of Iceland.svg
Iceland
File:Flag of India.svg
India

File:Flag of Ireland.svg
√Čire


File:Flag of Jamaica.svg
Jamaica
File:Flag of Nigeria.svg
Nigeria
File:NZflag proposal-dignan.svg
New Zealand

File:Flag of Singapore.svg
Singapore
File:Flag of Trinidad and Tobago.svg
Trinidad and Tobago
File:Flag of South Africa.svg
The Republic of South Africa

And here is the list of countries which couldn't: ...none
 
Of course, this confusion could have be stopped if our printed press or the BBC had wanted to highlight this reality. Unfortunately they feel no obligation to do this, which is why we, the people who will be voting in the referendum, are being forced to seek out the facts for ourselves.
  
The important question to ask is this: if all of these nations above used the pound (or had currencies which were linked to the pound) without any problems from Westminster, then why is Scotland different? Why, alone amongst the nations of the world, is our use of Sterling such a threat to them?

Senior adviser to Chancellor George Osborne
The truth is that Westminster is engaging in a form of psychological campaigning. They believe that by making us feel worthless, useless and frightened we will allow them to continue holding sway over us. It's a sickening strategy which we've highlighted in the past and although it shows no signs of ending, it is also doomed to fail. No matter how many times our newspapers talk us down, no matter how many 'no' campaign press releases the British State Broadcaster slavishly repeat, no matter how often unelected Lords tell us we can't achieve anything, the self evident fact that we have value will reach enough people.
  
And people who value themselves don't bow down to bullies.
Drew
 
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P.S For anyone is interested, you can find the Yes Scotland Q&A on this topic here. If what you are looking for is missing, then you can send Yes Scotland a question directly. Just click here to post them a message! Finally, the numerous Business for Scotland articles which highlight the benefits of a currency union to the rest of the UK can be found here.

7 comments:

  1. So can I ask a question? If these countries have used the pound in their past, have they had a person from their nation on the board of the Bank of England? Did they mind having a foreign country set their interest rates? I cannot understand why as an independent nation we would want our interest rates set by a foreign country. You have not explained this in your article either.

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    Replies
    1. Hi Anonymous!

      No, these countries did not have direct representation on the board of the Bank of England (just as Scotland does not now). The reason why they used the pound or linked their currencies with the pound is because it is a freely convertible currency, reducing transaction costs internationally. One of the countries which is not on this list, Canada, initially chose to link their currency to the US dollar for the same reason. They selected the dollar because that was in their interests and it suited their circumstances. Scotland has a similar relationship with the rest of the UK.

      Of course, with independence we would be able to create our own currency and set our own interest rates. All we would need to do is elect a parliament which supported this idea. The reason why most are cautious about this approach from day 1 is because any currency we create would dramatically increase in value (due mostly to our balance of trade surplus). This would make everyone in Scotland wealthier but at the price of hurting tourism and exports.

      In the future, once we have built up enough foreign currency reserves to prevent our currency appreciating too much, we can counteract this issue, but immediately it would be tricky, thus making the use of pound (or simply linking our currency to the pound) a better option in the short to medium term.

      I hope this answered your question!

      Drew - Sign for Scotland

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  2. Yes you can keep the pound but your rates will continue to be set by Westminster so you won't really be independent will you?

    ReplyDelete
    Replies
    1. Hi again Anonymous,

      Technically that is incorrect, interest rates are set by the Bank of England, not Westminster. This has been the case for a number of years now (I believe full responsibility was transferred over in 1997, but please don't quote me on that!).

      Independence is about having the power to make decisions for ourselves, not the immediate use of those powers. Right now, the people of Scotland could be united behind a single economic plan and be ignored (see our blog 'Why Democracy will be stronger in an Independent Scotland' - http://sign4scotland.blogspot.co.uk/2013/05/why-democracy-will-be-stronger-in.html) and this is what I and many others want to change. The approach we want to take regarding taxation, spending and currency should matter and it just doesn't at Westminster.

      So unfortunately I will need to disagree with you as independence is not the same as isolationism.

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  3. So the bank of England will be responsible for setting the interest rates for an independent Scotland?

    ReplyDelete
    Replies
    1. Hi again Anonymous,

      In an independent Scotland the Bank of England would set interest rates as long as the Scottish Parliament (which will be 100% controlled by the people of Scotland) agree.

      If Bank of England interest rate policy was working against Scottish interests we would be able to make different arrangements. This is only true with independence as a non-independent Scotland would have no say, influence or alternative.

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    2. Democracy means that in 2016 we can elect a Scottish Government and, possibly, decide on a Scottish Pound, linked to sterling, but with a Scottish Central Bank setting interest rstes and being a Lender of last resort. As the Bank of England is Nationalised, 10% of the assets should go to Scotland-a good start to any Scottish Central Bank.

      Delete