Bang on the money
Carney was calm, he was balanced, he was a technocrat and he said very little.
I don’t think for one minute the measured speech given by the Governor of the Bank of England, Mark Carney, on the technicalities of a shared currency will be a game-changer in the independence debate. But it should be.
Carney basically said nothing that we didn’t already know: that there are pros and cons to sharing the pound; that to make it successful there is “some sovereignty” that needs to be ceded, perhaps on both sides; that there are clear examples of where it can all go horribly wrong; and that it will be up to politicians to agree the terms and conditions and for the BoE to simply implement them.
He was calm, he was balanced, he was a technocrat and he said very little. He certainly made no serious intervention in terms of whether Scotland should be independent or not. And despite how it was then reported or the hysteria that followed within the camps of ‘Yes’ or ‘No’, that is right. For bank managers should walk a straight line. They shouldn’t be driven by emotion or by politics. Not for them to tell you what you should or shouldn’t do but simply to point out the risks and the benefits of what you propose. What Carney did was nothing new. It was no landmark speech. He basically took us through what the Fiscal Commission had already done, what the White Paper more recently proposed, and artfully summed up the debate that you have to presume Alex Salmond had already had with his colleagues – or at least in his head – when he declared that forging a so-called sterling zone with the rest of the UK was what an independent Scotland should do.
But there’s the rub. Like many other things – membership of the EU, or the Queen, or on a whole range of what are loosely described as assumed Scottish values that are blithely attributed to the Scots’ psyche – the First Minister presumes to know all, when in fact, he doesn’t.
I can remember when Salmond first mentioned the idea of a sterling zone. It was done in that emphatic way which he does which might as well be a hand in front of your face which firmly says ‘don’t ask, I am right’. And I remember it because I was in the company of SNP members who were shocked into consternation by his assertion. But like so many other things, their disbelief dissipated when they put their fingers in their ears and whistled over the bits they didn’t like. If the end game is independence then for many, does it matter how they get there?
Well yes, it does, because what the currency debacle shows is that if you become so risk averse and so far down the ‘change but no change’ argument, then there has to be a point where people ask, why bother?
It must have made infinite sense around the independence planning table when the idea of a shared currency was proposed. What could be more familiar in a changed world than the money in your pocket being the same? The scale of trade between Scotland and the rest of the UK means that sharing the pound makes complete sense so why wouldn’t you? But that is where the question of the Ts&Cs comes in. What do you give up to get an agreement about a monetary union where one partner is 90 per cent bigger than the other and does that then negate the point of breaking away in the first place? Alistair Darling believes so.
And given Salmond’s single-minded approach to what the currency outcome would be, he has helped create a vacuum about other options which has been filled by his political opponents making fun of the idea of Scottish currency – the idea that we might trade in black bun or even the bawbee mean it’s become a laughing stock. So how to revisit now?
A separate Scottish currency is what many in the SNP had assumed the position would be. Salmond himself had moved from that, to the euro, and now back to the pound. Some people may have forgotten what they wanted from independence but Jim Sillars has not. He says in his recently published book and his vision for a socialist independent Scotland: “Independence is a paradigm shift. It means no longer tolerating the intolerable… it means using the power of the nation to create a different economic model from the present one that has failed us so badly, and from there going on to build a decent society.”
The Unionists might think it is clever to quote him. They use his consistent desire to have a separate currency as a weapon to bash the SNP. But they are wrong because Jim, despite any disagreement he has with his party’s line, will vote ‘Yes’. He also reminds us that a shared currency means being shackled to the Armageddon of a trillion pound national UK debt. And what this currency conundrum does is throw into sharp relief that it may well be incumbent on Salmond to talk now about other options but there is also a clear need for the UK Government to offer some certainty and say definitively that Scotland can or can’t keep the pound but also to address the real risks for rUK if Scotland did walk away from the pound.
Everyone has understood the desire to make the idea of independence a less scary proposition. But all change involves risk. And Scots know that. If they vote to break a 300-year-old union, they are fully aware that life won’t just be the same. Otherwise, why would you bother? People skydive not because it’s safe but because it’s exciting, it’s new, it’s a challenge, and for all its risks, it’s worth it because it’s life-affirming and life-changing. Isn’t that what independence should be?
There is no doubt that Salmond is a great leader – some say the most gifted politician of our time – but he was elected to govern a country not presume what Scots think. And on the currency issue, there could be a time when his supporters look back on history and ask themselves whether they ceded too much sovereignty, not to the UK, but to him and in doing so, he cost them independence because he had no Plan B. He gambled with their future and he flipped the wrong coin which is odd for a former economist.
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