We’ve known for two days that George Osborne, Danny Alexander and Ed Balls were about to rule out sharing the pound with an independent Scotland. What we didn’t know until this morning is that they would be joined by Sir Nick Macpherson, the Treasury’s top civil servant, who has written a letter the likes of which are almost never seen in Whitehall.
Belying the reputation of civil servants as cautious, apolitical, and perhaps occasionally slightly verbose types, Sir Nick has written a short, punchy and withering assessment of Scotland’s chances of forming a currency union with the rest of the UK.
In it he says: Read more
We revealed in this morning’s FT that the Treasury is making it clear to investors in UK debt that if Scotland goes independent, the rest of the UK will still be liable for the debt that it has issued.
In other words, however the debt is carved up, if an independent Scotland defaults on one of its repayments, it will be English, Welsh and Northern Irish taxpayers who will have to pay up.
In one sense, this seems to give Alex Salmond a much stronger hand in any negotiation with the rest of the UK (again, if Scotland becomes independent) about how assets and liabilities should be carved up. After all, if the UK is guaranteeing Scotland’s debts, Salmond could turn round and insist his government will only keep up with repayments in return for another of his demands – for example, being allowed to use sterling. Read more
I was interested to read the piece by Alex Massie in this morning’s Scotsman, in which he argued:
Scots may take an even tougher line on welfare than voters elsewhere in the UK… Visit any working-class pub in Scotland and you will hear opinions that make IDS seem like Polly Toynbee.
If this is true, it makes the SNP position problematic. The party has consistently opposed the coalition’s welfare cuts, and when Johann Lamont, Labour’s Scottish leader, suggested axing certain universal benefits, such as free prescriptions, the SNP called it her “speech of madness”.
So what does the polling suggest? A fairly comprehensive look shows us two things: 1) Scottish voters are less hostile to the welfare system than elsewhere in the UK; but 2) they remain in favour of benefit cuts. Read more
George Osborne and Danny Alexander will front two important pieces of analysis next month into why being in the UK benefits Scotland both in terms of its currency and its financial services sector.
The first of these papers could prove particularly interesting. It will argue that the best kind of relationship between Scotland and the rest of the UK would be full fiscal and currency union – ie remaining part of the UK.
But it will also give an intriguing answer on the terms on which Scotland could leave the UK and yet still retain sterling as its currency. Read more
Amid all the debate about the economic viability of an independent Scotland, one element of the debate has been left behind, namely what Scottish independence would mean for the rest of the UK.
Martin Beck of Capital Economics has sought to remedy that today, putting out a 12-page briefing note on whether the rest of the UK would suffer if Scotland went it alone. Many of the conclusions are speculative: an awful lot depends on what the independence settlement looks like and what happens to the economy after 2014. But there are some interesting points definitely worth pulling out: Read more
Two days ago, I wrote about the possibility that the regulatory systems governing the press could differ in England and Scotland in the wake of the Leveson report. Unlike broadcast media, print regulation is a devolved issue, so for Scottish papers, it is the response of Alex Salmond that matters, not David Cameron.
Two days ago, it looked like Salmond was positioning himself to back a more liberal system than the Westminster government might. He told BBC Scotland:
A lot of fears have been raised that Lord [Justice] Leveson is going to recommend state regulation of the press, and I don’t think he will incidentally, and I can’t see there’s going to be a currency of support for that in Scotland. We value our free press far too much.
Alex Salmond. Getty Images
As journalists scramble to find out what different members of the coalition and Labour party think about press regulation in the run-up to tomorrow’s publication of the Leveson report, one party has been largely overlooked.
It is a little-known fact that press regulation, unlike rules for broadcasters, is a devolved matter. So the person making the decision on whether or not to put Leveson’s proposals into law in Scotland is Alex Salmond, not David Cameron.
Until this morning, Salmond had remained curiously quiet on the issue, but today he spoke out. Read more
Alex Salmond believes last month’s speech by Johann Lamont was a game-changer. In it, the Labour leader in Scotland argued that many of the universal benefits currently enjoyed by Scots are not affordable in the long-term. Attacking what she called the “something for nothing” culture, she said:
I believe our resources must go to those in greatest need.
But if the devil’s greatest trick was to convince the world he didn’t exist, Salmond’s most cynical trick was to make people believe that more was free, when the poorest are paying for the tax breaks for the rich.
She picked on four things she believed should be scrapped: the council tax freeze, free personal care for the elderly, free prescriptions and free university education. Read more
David Cameron will meet Alex Salmond in Edinburgh on Monday morning to put the seal on a deal to transfer the power to the Scottish government to hold a referendum on independence.
As part of that deal, the British government will make sure there is a straightforward, single question, while giving way on allowing the Scottish government to give 16- and 17-year-olds the vote.
This is being treated with some consternation at Westminster, where many fear it will undermine the current constitutional settlement of only allowing adults to vote. Lord Forsyth, the Tory peer, called it a “backdoor way” of changing the voting rules, arguing that it should be debated properly in parliament. Read more
I’ve written on this blog before about the dispute between Westminster and Holyrood on whether there should be a third option – dubbed devo-max – on the eventual referendum on Scottish independence. The coalition doesn’t want it to be, worried the SNP will use it to muddy the waters and keep the independence debate rumbling on. But the Scottish government says the option should remain open if Scottish people show they want it.
The dispute is so tense that Westminster officials recently started questioning whether it could scupper the referendum altogether. But it seems Alex Salmond could be about to back down.
In an interview with the LA Times, the first minister said:
Independence regularly is the most popular option of three options that are usually offered to people. One is no change from the current situation; second is what’s often called devo [devolution] max, or fiscal autonomy; and the other is independence.
It has been assumed in Westminster for several months now that the Scots will get an independence referendum, and it will happen in 2014. But mutterings are beginning to emerge that this may not happen at all - and here is why.
After David Cameron signalled he was willing to give way on his preferred date of 2013, the only things left to work out were supposed to be who got to vote and what the question would be.
The first of those points of tension looks close to being settled. Number 10 this morning all but admitted it was willing to let 16- and 17-year-olds to vote in the referendum if the SNP insisted on it. When asked if allowing this to happen would set a precedent for general elections, a Downing Street spokesman said:
These are two different things. One is a referendum on the independence of a nation which is an irreversible decision. The other is an election for the government, which can be reversed after five years.
Last week, we were told that the UK government believes the Scottish parliament does not have the legal right to hold its own referendum on independence.
Since then, debate has focused on what the legal consequences would be if Alex Salmond pushed on and held one anyway: would it be regarded as “consultative”? Would the UK government challenge it in the courts? If so, would that look like London bullying Edinburgh?
Today, Jim Wallace, the former deputy first minister and Lib Dem leader in Scotland, has intervened in that debate, using some pretty strong language to try and head off the possibility of Salmond simply going ahead and holding his own referendum. In the most striking passage, Wallace says that to do so would be not just illegal, but undemocratic: Read more