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An independent Scotland needs its own currency PDF Print E-mail
Written by Gordon Prentice   
Tuesday, 09 September 2014 15:56

The Governor of the Bank of England, Mark Carney, tells the TUC today that a currency union between England and an independent Scotland would be “incompatible with sovereignty”.

Carney, a former Governor of the Bank of Canada, should know.

During the Quebec Provincial election in March this year, Pauline Marois, the then leader of the Parti Quebecois, startled Canadians by claiming an independent Quebec would still use the Canadian dollar (the loonie). And she wanted a seat at the Bank of Canada.

The idea was widely regarded as fanciful and the Bloc went down to a crushing defeat on 7 April.

Why is the SNP’s insistence on keeping the pound after a YES vote not similarly laughed out of court? It is to me  a complete mystery.

The rest of the UK (rUK) is not going to underwrite an independent Scotland. The voters in rUK would never tolerate such a lopsided arrangement.

If not the pound then what about the Euro? (Now we can laugh out loud.)

Paul Krugman writing in the New York Times. is the latest in a very long line of economists to rule that one out.

So what are we left with?

Ian McGugan in today’s Globe and Mail (see below) says an independent Scotland should have its own currency. He suggests they call it the Thistle on the grounds it will be very hard to hold.

Ian McGugan writes: The world has embraced the loonie. But would it do the same for the Scottie?

As Scotland heads toward its Sept. 18 referendum with the pro-independence side edging into a narrow lead in the polls, a new currency becomes a distinct possibility.

Granted, the last thing a time-starved world needs is the distraction of yet another form of money, especially one backed by a tiny nation with only slightly more people than British Columbia. But, given the alternatives, a new national currency could emerge as the best path forward for Scotland Inc. The other obvious choices – continuing to use the British pound or switching to the euro – are riddled with problems.


The euro option, for instance, faces the immediate complication that Scotland has no guaranteed ticket to membership in the European Union. Among other obstacles, there’s Spain, which is struggling to placate its own independence movement in Catalonia, and doesn’t want to encourage its home-grown separatists by embracing a newly independent Scotland.

Even if Scotland’s path to EU membership proceeds without a hitch, the euro option would force it into the same one-size-fits-all monetary straitjacket as the rest of the euro zone – an approach that has had dismal results in recent years. If North Sea oil prices were to plummet, oil-dependent Scotland would have no way to offset the shock with looser interest rates.

That’s a problem. But the pound option is also looking less than, um, sterling.

While the Scottish National Party (SNP) has long insisted that an independent Scotland would continue to use the British currency, the power brokers in London have rushed to reject the notion.

All a bluff, sniffs the SNP. It says the English will come to their senses after the referendum, especially since the SNP insists it will repudiate its part of the national debt unless Scotland keeps the pound.

But that raises the question of whether keeping the pound makes sense for Scotland. There are two ways to do so – by simply adopting the currency (a process that goes by the unlovely term “sterlingization”) or by striking a formal currency union with the remainder of the United Kingdom.

The problem with sterlingization (other than its name) is that it leaves Scotland without any voice at the Bank of England and without any backstop from the central bank if crisis strikes. It also gives Scotland no way to adjust monetary policy to suit its own economy.

A formal currency union seems equally awkward. As the smaller partner in the union, Scotland would have to agree to keep its budget deficit within bounds set by the rest of the U.K. so that there would be no danger of it shifting risk onto its larger partner through runaway spending. For similar reasons, Edinburgh would also have to cede control of banking regulation to the folks in London.

At that point, not much would be left of Scotland’s new independence. “It is weird to tell the English you are desperate to be rid of them and, in the same breath, say you trust them so much that you wish to share a core activity of the state you are leaving,” writes Martin Wolf in the Financial Times.

All things considered, the best move for an independent Scotland would be a currency of its own. That would allow the new state to adjust its monetary policy to suit its own needs.

The problem, says Ronald MacDonald, an economist at the University of Glasgow, is that setting up a new currency involves a painful period of winning markets’ trust and building up foreign-exchange reserves. But in the long run it would seem to be the only policy that would make sense if Scotland does vote for independence.

The question that remains is what to call the currency. The Scottie? The Braveheart? I suggest the Thistle, since it’s likely to be painful to hold, especially as North Sea oil revenues dwindle.

Follow  on Twitter: @IanMcGugan

Last Updated on Thursday, 11 September 2014 18:02
Scotland's future decided by non-Scots PDF Print E-mail
Written by Gordon Prentice   
Friday, 05 September 2014 20:04

Canada’s Conservative Primer Minister, Stephen Harper, tells us that Scottish independence is "ultimately a question for the Scots"

It is not quite so simple. As opinion polls narrow (53% now say no and 47% yes) it is quite conceivable the result could be decided by foreign nationals.

An estimated 253,000 foreign nationals are living in Scotland and many of them will have a vote. Under the UK’s bizarrely anachronistic voting laws, citizens of 53 Commonwealth countries, including Canada, as well as the Republic of Ireland are allowed to vote in the independence referendum.

Nationals from the 28 member states of the European Union, if living in Scotland, can also vote in the referendum because the right to vote is linked to the franchise for the devolved Scottish Parliament, not Westminster. This means that while they cannot vote in an election for a Westminster MP they can, perversely, vote in the referendum.

How can it be right to allow the UK’s centuries old constitutional settlement to be changed irreversibly by non-UK citizens?

Simply posing the question illustrates the absurdity of it all.

In the 1995 Quebec referendum on secession from Canada (in which it hardly needs saying only Canadian citizens could vote) the Noes had the support of 69% of Quebeckers at the beginning of the campaign. This shrank alarmingly and on referendum day the Noes won by a hair’s breadth.

It is a cautionary tale.

Time for the Noes to speak out, loud and clear.

Last Updated on Friday, 05 September 2014 20:50
Michael Misick trial date pushed back PDF Print E-mail
Written by Gordon Prentice   
Wednesday, 11 June 2014 19:59

The trial of Michael Misick, the former Premier of the Turks and Caicos Islands, on corruption charges has been pushed back to 6 October 2014.

A ruling is expected on 23 June on whether the trial will be with or without a jury.

Misick is – or was - a friend of tax dodger Michael Ashcroft who cheated his way into the House of Lords in 2000.

Last Updated on Wednesday, 11 June 2014 20:05
Michael Misick Corruption Trial Looms. PDF Print E-mail
Written by Gordon Prentice   
Tuesday, 06 May 2014 00:00

The trial of Michael Misick, the former Premier of the Turks and Caicos Islands, on charges of corruption is scheduled to start on 7 July. But this date could slip if his new UK based lawyer, Courtney Griffiths QC, successfully persuades Mr Justice Paul Harrison that he needs more time to prepare the case.

The Turks and Caicos Weekly News reports that, at a hearing on 27 May 2014, Griffiths “will argue against the Special Investigation and Prosecution Team’s (SIPT) application for a trial without a jury”.

Here the Turks and Caicos Sun TV interviews Griffiths about the upcoming trial and his previous experience with high profile cases.

In 2012, BBC Panorama broadcast an investigation into Lord Ashcroft’s business activities in the TCI.

Michael Misick counted Ashcroft as one of his friends.

Michael Ashcroft, who cheated his way into the House of Lords in 2000 will, no doubt, be following Misick’s trial closely.

Last Updated on Tuesday, 06 May 2014 21:13
Toronto Centre By Election PDF Print E-mail
Written by Gordon Prentice   
Tuesday, 19 November 2013 00:00

Next Monday (25 November) voters go to the polls to elect a new Federal MP for Toronto Centre, the constituency previously held by the former Liberal Leader, Bob Rae who has now retired from the House of Commons.

Rae was the (NDP) premier of Ontario, before swapping parties and going into Federal politics as a Liberal. This cross-dressing is much more common in Canada than in the UK.

He has accused the NDP’s by election candidate, journalist Linda McQuaig, of “class warfare”. Ooooh!

She says she is simply drawing attention to the huge gulf between the richest and poorest in the centre of Canada’s biggest city.

Her main opponent, the Liberal candidate, Chrystia Freeland, is also a journalist who has written extensively on the super rich in the United States.

She hasn’t lived in Canada for over a decade.

Astonishing really.

Rob Ford: the story that refuses to die

Type in the name “Rob Ford” in the Toronto Star search engine and it will return 5,614 results – and counting.

Even though Ford has now been stripped of most of his powers and is reduced to a figurehead, he will continue to fascinate.

Canadian municipal politics which, until now, never rated a mention in the UK media, is now grabbing the headlines.

The whole world now knows that a boastful, lying crack-head with an explosive temper is (or rather was) in charge of Canada’s biggest city.

He has become a figure of fun.

Ford shrugs it all off, ignoring the mockery.

He says he has fessed up and come clean. There is nothing left hidden in the closet (except perhaps, he says, the odd coat-hanger).

And yet he still refuses to address a long list of hugely damaging allegations made against him that are detailed in a partly redacted detailed police dossier.

We can only speculate what is behind the blacked out text. We shall all know in due course.

Here the sober, not-for-profit, no ads, political channel CPAC takes us inside Toronto City Council Chamber for yesterday’s unprecedented events where methodically, step by step, motion by motion, Mayor Ford’s powers are taken from him.

Anyone else would be crushed by such a public humiliation.

Not Ford. He gets strength from his notoriety and he revels in his celebrity status.

Like many others, I feel sorry for him.

He still doesn’t realise how much trouble he is in.

Last Updated on Wednesday, 20 November 2013 01:28
The Ford Scandal PDF Print E-mail
Written by Gordon Prentice   
Thursday, 14 November 2013 20:11

The Toronto Star proclaims today that it has 16 pages on the Rob Ford scandal.

Toronto is consumed by the story of the fall from grace of His Worship the Mayor.

A disbelieving Canada, looks on. Transfixed.

The Star’s editorial and the Globe and Mail’s are running out of adjectives to describe a  man they both consider to be a loathsome duplicitous liar and someone wholly unfitted to be Mayor of North America’s fourth largest city.

It is hard to disagree.

Another day, another headline. This time, amazingly, about oral sex.

Tomorrow at City Hall, Councillor John Filion will move a motion stripping the Mayor of important powers.

I shall be there.

Last Updated on Friday, 15 November 2013 03:49
Rob Ford PDF Print E-mail
Written by Gordon Prentice   
Wednesday, 13 November 2013 02:48

Toronto’s right wing populist Mayor, Rob “did you just call me a fat fuck?” Ford, faces insurrection tomorrow (Wednesday 13 November) when his colleagues on Toronto City Council will urge him to take a leave of absence to deal with his personal issues.

Ford admits he drinks too much. He gets "hammered". And has smoked crack cocaine.

The police want to talk to him but he is not co-operating. 

In an act of braggadocio, Ford has moved the motion which is critical of him to the top of the Council Agenda - first business - and will take questions.

Despite all the bluster and his talk of getting on with the job, the cracks are showing in Ford Nation – the loyal band of followers who would walk over shards of glass to defend their (millionaire) tax cutting Mayor. 

Even Don Cherry, the flamboyant ice hockey pundit who lauded Ford on his election as Mayor, feels let down.

The man is an embarrassment, who knows no shame.

He is a disgrace.

This editorial from the Toronto Star neatly sums up the case against him.

Canada’s broadcaster, the CBC, has investigated the criminal bahaviour of Toronto’s “chief magistrate” and still Ford clings to office, determined to serve out the rest of his term which has a year to go.

That, I think, will take a miracle.

Canada’s municipal politics rarely makes the news in the UK but, thanks to the foul-mouthed, pea-brained Rob Ford, that’s changing.

Here Channel 4 News door-steps him in Toronto and gets the full Ford treatment. 

Last Updated on Friday, 15 November 2013 03:49
Bob Wilkinson PDF Print E-mail
Written by Gordon Prentice   
Sunday, 11 August 2013 20:11

The news this week that my friend Bob Wilkinson has died of cancer comes as a huge shock.

Bob was my agent in the 1997 General Election and masterminded a brilliant campaign that gave

Labour a colossal majority of over 10,000. We had over 53% of the total vote.


As it happens, I last saw Bob a couple of years ago when I bumped into him quite by chance in the

Rising Sun in Blacko as I was having a quiet pint with John Pope and Andy Stringer. Bob, a keen

supporter of the Campaign for Real Ale, was his usual convivial self. He enjoyed the company of others.

A teacher by profession, Bob could be quite self effacing, playing down his own role in our stunning

victory in Pendle.

In his report to the GC after the May 1997 General Election he admitted that we had a lot going for us.

“A bankrupt Government, a good national campaign by Labour and Tony Greaves as the Liberal candidate!” 

The campaign was certainly memorable for the terrific show of posters. There has been nothing comparable since.

They were absolutely everywhere with Bob directing the stakeboarding teams to get them up first and ask permission later!

He told the GC afterwards:

“The experience of acting as agent was exhilarating and almost addictive but I would warn anyone

thinking of taking the job for the next election that it can turn the mildest of individuals into a dictator

overnight. So much for democracy!”

Back in 1997, no one was very sure how the Blair Government would shape up but there were straws in the wind.

We went into that election promising no increase in the top rate of income tax. And that we would stick to planned

public spending for the first two years. Bob was uncomfortable with all this but was hoping for the best.

These were also the days when there were debates within the Party on whether the UK should join the Euro.

I recall long conversations with him on the merits or otherwise of the Single Currency. I was hostile. Bob less so.

I am told that Bob left the Labour Party after Iraq.  If so, this decision wouldn’t have surprised me. He would have

quickly sussed out that the reasons for the war were entirely bogus.

Bob had two boys, Alan and Ian, with his first wife, Ruth, who worked in my office in Carr Road for many years.

I feel a deep sadness that Bob is no longer with us.

Last Updated on Sunday, 11 August 2013 21:16
Steve Webb and buttered parsnips PDF Print E-mail
Written by Gordon Prentice   
Thursday, 09 May 2013 13:11

Steve Webb, the Pensions Minister, used to believe the scandal of “frozen pensions” was an injustice crying out to be remedied.

Now that he is in a position to do something about it, he refuses. Point blank.

In evidence to the Work and Pensions Select Committee on 11 March 2013, Webb confesses he is sympathetic to the plight of frozen pensioners, “but sympathy butters no parsnips”.

Astonishingly, he takes refuge in the 2010 Lib Dem manifesto - the one that notoriously promised to “scrap unfair university tuition fees”.

“When I stood for election in 2010, I stood on a manifesto that costed the things I was promising people I would do; I did not promise a penny to a frozen pensioner. There was no promise in the manifesto on which I stood in 2010 to frozen pensioners at all.”

Unfortunately, 550,000 frozen pensioners have been royally led up the garden path for years, often by Lib Dems seeking the moral high ground.

This is Nick Clegg:

“I can assure you that Liberal Democrats firmly believe that pensioners that have paid taxes and contributed towards National Insurance should not be penalized for choosing to live abroad in retirement”.

And David Laws:

“Uprating arrangements for the pensions of those who live abroad represent an enormous injustice. They are totally arbitrary and illogical”.

Now Webb wants us to believe frozen pensions is a settled matter and is off the agenda for good. He insists there will be no changes to the current set-up.

Instead, he seeks to divert our attention by promising action against 220,000 people living overseas who get a UK State pension but have “never set foot in the UK”.

Webb doesn’t tell the whole story and is forced to admit the changes will go much wider

But, under pressure, he sticks with the original line. It is all about fairness.

Webb says its wrong that a UK pension should be paid to someone who has never contributed a penny in National Insurance contributions. 

But why the punishing freeze on UK State pensions for people living in some overseas countries who have paid NICs over a working lifetime in the UK?

Fairness doesn’t get a mention. 

This time other considerations apply. We are told it is unaffordable.

Read the contributions from pensioner organisations such as the CABP in the Work and Pensions Select Committee reports attached. Search for "frozen".

Iraq PDF Print E-mail
Written by Gordon Prentice   
Tuesday, 19 March 2013 00:00

Ten years ago, 139 Labour MPs voted against the war with Iraq.

It was a huge rebellion but not big enough.

There was no evidence of weapons of mass destruction. Only dodgy dossiers and loud assertions.

But with the help of credulous Conservatives and furious arm-twisting by Labour whips, Blair won the vote and got the war he wanted.

Here in Canada, there is a widely held view that the Prime Minister at the time, Jean Chrétien, made the right call in keeping Canada out of it all.

Indeed, Chrétien tells the Globe and Mail he never believed the intelligence the United States claimed to have that Iraq had amassed weapons of mass destruction.

My old friend Jack Straw, who was Britain’s Foreign Secretary at the time, was equally convinced they were there.

In his very readable autobiography, Last Man Standing, Jack writes:

“I have been asked a million times since the invasion whether, knowing then what I know now, I would have made the same decision. No, I wouldn’t. How could we have agreed to invade Iraq if we had known that there were no WMD there? But the question serves no purpose. We made a decision based on what we believed to be the case at the time.” (page 410)

I am left wondering who the “we” is.

The late Robin Cook, Jack’s predecessor as Foreign Secretary, says that by the time of the Commons vote on 18 March 2003, Blair no longer believed there were WMDs in Iraq.

In his valedictory memoir, The Point of Departure, Robin recalls a conversation with Blair just days before the crucial Commons vote. 

“Tony did not try to argue me out of the view I expressed that Saddam did not have real weapons of mass destruction that were designed for strategic use against city populations and capable of being delivered with reliability over long distances. I had now expressed that view to both the Chairman of the JIC and to the Prime Minister and both had assented in it.” (p 312)

He goes on:

“I have no reason to doubt that Tony Blair believed in September (2002) that Saddam really had weapons of mass destruction ready for firing within forty five-minutes. What was clear from this conversation was that he did not believe it himself in March.”

Jack and his then US counterpart, Colin Powell, both now regret the intelligence failures that led to war.

Don’t we all.

But whether the Chilcot Inquiry, due to report in 2014, will be able to fill in the gaps in our understanding is a moot point.

Some people are simply not co-operating.

Last Updated on Sunday, 28 July 2013 15:25
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