It has depth, detail and intellectual rigour
A LONG time coming, but the report has depth, detail, quality in its scope of research, and is underpinned with intellectual rigour, a rare quality these days in the sphere of political economy.
It is honest in admitting the reality of the integration of Scotland within the UK over 300 years, and its consequence – that careful, measured steps are required before creating a Scottish currency separate from sterling.
The purists will argue that continuing in the UK sterling zone, without definition of time, will make an independent government too reliant upon what happens to the RUK economy and monetary policy. But the reality is, as the report demonstrates, until the Scottish economy becomes stronger and more global in its character, the UK as our biggest market (64% of exports) will continue to be an influence we cannot avoid.
The UK may be the fifth largest economy in the world, but as the report notes it is unsustainable, due to the over dominance of the south east.
There is an inherent weakness in a UK reliant on debt financing, and a national debt soaring to £1.6 trillion.
So, the timing of a move to a separate currency will be one of the most interesting debates on independence – but that debate is not for now.
The report recognises this salient weakness of our neighbour’s economic condition, with sophisticated proposals of how an independent Scotland, can assist with RUK debt reduction.
One caveat: it fails to generate the radical mental attitude needed on oil. It is not alone. Its concern is with income from oil taxes, but not with income from ownership. An oil price fall brings in less in tax, but that fall does not mean zero profit. Scotland is not, repeat not, an oil producing nation, because the nation owns nothing of it, unlike Saudi, and Abu Dhabi. They own the oil, and the profits ($80 a barrel as I write). We don’t, and the real wealth flows past us; a great capital resource lost, whose investment is essential for any growth strategy.
Finally, a word to the Yes movement. This is a case for optimism, but not absolutely definitive. It provides an excellent basis for the debate we need with the people, before a referendum.
The timing of a move to a separate currency will be one of the most interesting debates on independence – but that debate is not for now