Scotland must know its place

Sir, – Nick Cole (Letters, September 1) proves my point about nationalists giving up on the facts and majoring on emotive issues to argue for independence.

Before the 2014 independence referendum the SNP said Scotland would “share” the pound sterling with the UK in a “currency union”, which would have meant interest rates and monetary policy would have been set by the Bank of England.

That was a non-starter because the bank said it would not underwrite the Scottish economy. Now we are told a second attempt at Scottish independence should occur, and Scotland should set up its own currency either in the first term of the new parliament or any time up until 10 years thereafter.

With a huge fiscal deficit that idea is unsustainable, because Scotland does not have the cash to back a new currency in the international markets.

A new currency – the groat, Scottish dollar or bawbee – would immediately devalue against the pound, making imports more expensive and assets – from pensions to property – worth less. Its effect on Edinburgh’s vital financial centre, which manages billions of assets in pounds sterling, would be catastrophic.

Prof Ronald MacDonald, professor of Macroeconomics and International Finance at Glasgow University, has said, following the introduction of the new currency, “any debt repayments, such as those on mortgages and credit cards, that remain denominated in sterling would rise sharply. Since it is likely that state pensions would be redenominated into the new currency postindependence their value would also be worth less.”

The SNP executive has shown little financial acumen in balancing the books. Without the largesse of the Barnett formula giving every man, woman and child a £2,000-a-year bonus, or the £5 billion for coronavirus support, the Scottish economy would go belly-up. With a national deficit six times that of the UK, the SNP are relying on the British Government they despise to bail them out.

After separation, the economy would be in dire straits and Scotland would need a bailout from the IMF.

This would mean cuts to public spending including pensions, and the privatisation of state assets to raise cash, which the IMF has insisted on previously, and possibly also a tax on savings.

Mr Cole also disparages the UK’s historical celebrations. Can I remind him this month sees the 80th anniversary of the Battle of Britain which, if lost, would have reduced Scotland to a slave colony of Greater Germany. William Loneskie. 9 Justice Park, Oxton, Lauder.