This Week in Scotland: Sterlingisation, Sir Ian Wood and Revenue Scotland

On Thursday, Parliament enters purdah and breaks for the final campaign push. With the issue of currency union continuing to dominate the campaign narrative, Salmond and Darling are preparing to go head to head in another live TV debate on Monday. Away from independence, Holyrood passed legislation relating to Blue Badges and future tax collection.

Parliament is now in recess and the Government is in purdah until the referendum is over.

Currency Union? Sterlingisation? Something completely different?
Alex Salmond continues to face pressure to outline his currency Plan B in the event of independence and the UK Government ruling out a monetary Union. This follows comments made by the First Minister that continuing to use the Pound outside of a formal monetary union was a “viable transition option.” However, he refused to be drawn on which of the two long-term option outlined in the independent fiscal commission report (Euro or a new currency) would be his preferred choice nor how long a “transition” period Scotland could expect.

Crawford Beveridge, the chair of the First Minister’s Fiscal Commission Working Group, has warned that the main Westminster parties could well refuse to enter a formal currency union with Scotland having little choice but to accept such a move. Crawford described the idea that an independent Scotland could refuse to take its share of national debt if a currency union was rejected as “morally difficult” and tantamount to a “default” in the eyes of the markets and credit rating agencies.

Beveridge’s comments have been followed by an Adam Smith Institute publication, which suggests that “sterlingisation” could be a more effective option than Salmond’s Plan A. The free market think tank claims that continuing to use the Pound without the use of a central bank would be a “significant” improvement on current arrangements and highlights the success of Latin American countries’ informal use of the Dollar. This is diametrically opposed to the position espoused by Better Together who has repeatedly claimed that using the Pound without a formal agreement would be a “disaster”.

How much oil is there?
Drawing on his work for the recently published Wood Commission into the North Sea Oil and Gas industry, Sir Ian Wood has warned against independence. According to the former Chairman and CEO of the Wood Group, Scotland’s North Sea reserves could reach “very low levels” by 2050; that dwindling oil reserves will “seriously hit” Scotland’s economy and public services within 15 years; and warned that the Scottish Government’s estimates on future North Sea output and revenues are exaggerated by up to 60% and 40% respectively.

Warning that the industry should not feature significantly in Scotland’s mid-term economic calculations, Sir Ian claims that, without new hydrocarbon discoveries in the region, the North Sea is likely to only have between 15 billion and 16.5 billion barrels. This is considerably lower than the 24 billion figure quoted as the “central prediction” by pro-independence supporters.

Sir Ian also went on to state that if Scotland elected for independence, it would lose UK pricing subsidies on renewables and could be forced to import energy from rUK.

Salmond would quit if it guaranteed independence
With a month to go, Alex Salmond has admitted that he would “retire from politics tomorrow” and “abolish” the SNP if it would provide a guarantee of a Yes vote. Salmond’s comments came on a visit to Arbroath where he ‘issued’ a second declaration of Arbroath – a Declaration of Opportunity – that pledges to create a fairer society and protect the NHS from privatisation.

The comments come as pro-independence campaigners seek to emphasise that their cause is about more than the SNP and Mr Salmond, both of which have faced claims that they are turning people away from supporting independence.

A hardening of views….by the English
Researchers from the Universities of Cardiff and Edinburgh have published a report which suggesting that any negotiations in the event of a Yes vote might not be as amicable as some would have you believe.

The Future of England 2014 survey found that;

• 23% of English voters support a proposed formal currency union in the event of a Yes vote
• 56% believe that Scottish public spending should be curtailed to the UK average if a No vote occurs
• 62% agree that Scottish MPs should be prevented from voting on so-called English laws
• 42% back the notion of significant further devolution.

Both sides have used the publication to further their campaigns. Better Together have pointed to the lack of support for a currency union while Yes Scotland have focused on independence being the only way to protect public spending.

This survey coincides with further polling from ICM, YouGov and Panelbase which shows an increase in support for the Yes vote. See here.

Revenue Scotland and Blue Badges
MSPs have passed the Revenue Scotland & Tax Powers Bill, which will create Scotland’s first tax collections system for 300 years. The Bill is a direct result of the 2012 Scotland Act, which devolves responsibility for a number of taxes including the power to set a Scottish rate of income tax. Under the Act, Revenue Scotland will be established to collect tax revenues for a new land and building transaction tax replacing Stamp Duty and the Scottish landfill tax. The Bill received cross-party support as has been hailed by unionists as an example of further devolution in action.

The parliament also passed the Disabled Persons’ Parking Badges Bill this week, which seeks to crack down on the abuse of blue badges by giving councils the power to confiscate and cancel badges.

Sam Galbraith MSP
Former neurosurgeon turned MP and MSP, Sam Galbraith sadly passed away this week. The former Labour politician was elected to Westminster in 1987 representing Strathkelvin and Bearsden where he served as a health Minister in the pre-devolved Scottish Office. Following devolution, he was appointed education minister in Donald Dewar’s first cabinet and later as minister for environment and support where he served until 2001.

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