After the Currency Union debate the #IndyRef is dead, so long live the SNP…

Lots of remarkable happenings in the last week or so in Scotland’s #IndyRef debate. Some of it needs taking with salt. For instance, whilst Barroso is correct to say that an independent Scotland will have to apply for membership of the EU, it’s hard to see what grounds anyone in the EU would have for saying no.

It’s also true to say that the No campaign has hardly set the world alight. There have been precious few inspiring reasons given for staying in the Union, more just an unremitting focus on all the deficits. It’s in the nature of such Yes/No arguments that the No team always gets the dirty end of the stick (just ask successive Irish governments?) but, speaking from the Irish experience, they generally know what to do with it.

I have to say that Alex Salmond’s done a great job in a fight he was never likely to win. Not because there’s not huge value in an independent Scotland, but that people generally don’t like uncertainty and to shut uncertainty out, they will choose No, even if their bolder selves would prefer a yes.

With all the other red herrings set aside, the reason Salmond is likely to lose in September is not the polls, its his government’s over simplification of the currency problem that will kill the Yes campaign dead. And I say this despite a decent rally in the Survation poll, which saw Yes go up 6% and no down 5%.

The problem is that the hard analysis of the currency union is that it guts the idea of Scotland being actually independent in any meaningful way. As part of a stepping stone strategy it still leaves an ‘independent’ Scotland teathered to English fiscal policy, and with all the hard yards left to do.

Martin Kettle (2k comments and counting) probably nails it better than most commentators:

It is often said, by admirer and critic alike, that Salmond is a man who plays a long game. If that is the case, then what is the long game that has such a reflexive and prominent place for such low-level sneering? To read some commentators, you may think that Salmond has simply tapped in to the Scottish public’s view. Maybe that feeling of being talked down to and told off, even bullied, is the feeling that most Scots share this week. Salmond has captured their mood before. So he may do it again.

But a rather more persuasive explanation for the inadequacy of the SNP’s engagement with serious issues this week is that it may suspect the game is up. The party has read the steadiness in the polls and realised it is not going to win a referendum that Salmond neither wanted nor expected until his shock landslide in 2011 forced him to hold it.

In that case, the long game may simply be an SNP core vote strategy, designed not to persuade but to maximise the anti-English, anti-British, anti-Tory, anti-neoliberal vote that the nationalists have successfully corralled in the past – and await another day.

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  • The issue on currency is ultimately one of sovereignty. If you have currency union you have to give up sovereignty. Same argument with the Euro. You only have to look at the Republic of Ireland to see how sovereignty is compromised, and there will be more to come. So the Scots Indy argument that an independent Scotland can keep the pound is not wrong, but they can either be Sovereign or have absolutely no control over their currency and live within the nation’s means (no more Barnet!), with Bonds based on future ability to pay? If an Indy Scotland were then to apply to the EU, and all new members MUST join EURO, then why did they even bother to become independent only to cede fiscal (and the rest) sovereignty to Berlin/Brussels?

  • JH

    I think if you’re an Irish person (or N Irish or, perhaps especially, a northern Unionist) you need to add significant handicaps to your margins of error in working out how this is going to go.

    If you’re working out what you think the final outcome will be I’d add about 20% ambiguity for illusory correlation; you should assume that even at your best efforts your perception will be coloured by our own situation.

    Then I’d add at least another 10% for that classic Irish trait of benign pessimism.

    We live in a time when three companies have plans to send large numbers of people to Mars within 30 years.

    When self-made billionaire entrepreneurs want to break California into six states and secede from the US.

    When we carry access to all the World’s information in our pockets.

    This is just a referendum on a relatively small constitutional change in a tiny part of the world – it’s close and there are months to go.

    Lighten up. 🙂

  • RG Cuan

    The referendum is far from dead, as everybody in Scotland, and indeed Westminster, knows very well.

    Membership of the EU is a non-issue. Of course an independent Scotland will be accepted as a full member, no processes exist to deny Scots this right.

    As for the currency union, Osborne’s ploy last week didn’t work and the latest poll clearly shows that. Scots aren’t taking very well to London’s threats. It’s true that fiscal sovereignty will be compromised but it already is anyway. Social, cultural and moral sovereignty are what’s up for grabs and it looks like a growing number of people in Alba want to take it.

  • DC

    I thought currency union was being ruled out by the Treasury?

  • Morpheus

    Wouldn’t it be hilarious if Salmond took off the gloves and said “Oi George, Scotland has been a vital part of the UK for centuries and the currency is as much ours as it is yours so we are going to use it with or without your blessing. With you blessing and we take some of the UK debt. Without your blessing….”

  • DC

    It’s about time England played hard ball with Scotland – talk about wanting independence fine – but then expecting negotiations that give Scots Nats a soft landing.

    Yeah, don’t think so. Do one!

    England has been too tolerant on many fronts for many decades but as ever it’s when dirty old lucre is on the table the real rulers of the country come out, the money men and women come out and enter the corridors of power and slap the British government all over the place and into taking hard headed action.

  • JH


    Hmm that’s interesting. If they take a hardline position now they’ll lose the referendum for sure but possibly be better positioned in the negotiations.

    …assuming that in the event of a ‘yes’ more than half of what’s in the remaining UK’s interests isn’t also in the emergent Scotland’s. In that case it’d be conceding the referendum to end up with the same hand in negotiations.

  • Morpheus

    It’s not really a United Kingdom at all is it DC? It’s England’s Kingdom and the rest of us will do what we are God dam told right?

  • Mick Fealty


    My argument is simple. SNP wins, but the IndyRef is lost. Why? We know from Irish referendums that Nos increase alongside the uncertainty of the outcome.

    As for a currency union, there are multiple problems. Not least this:

    ‘….the post-independence travel would be towards making the currency union less effective: smaller fiscal risk-sharing; less certainty about the handling of crisis situations; and, not least, less certainty over where the accountability of the BoE would lie.’

    If there’s a yes vote, then the Treasury HAS to take the gloves off to protect the pound from that increased uncertainty. Far from talking tough rUK will have to act tough. And I suspect that the price they would have to ask would be something the Scottish Government cannot afford.

    If you look back at the Scotland’s Future document you’ll see what the problem is, and why Alec is pushing this as a solution (even though it isn’t one). The Banking Sector makes up nearly a quarter of Scotland’s total GDP.

    The current UK provides a cash reserve for that banking sector to cover it for any gambling debts it runs up (and these are tougher now in the wake of the financial crisis. Salmond’s theoretical currency union would provide this, but only at the price of permanently shackling a free Scottish economy to the rUK.

    The ECB would likely force a draining of Scotland’s banking sector, and pegging a Scottish pound to Sterling would mean something similar happening by default. If you want to peg Scotland’s financial sector you need rUK cash to hold it together.

  • megatron

    It is an oversimplification to say that the currency debate means that there will be no real independence anyway.

    What countries all over the world have found is that if you want prosperity you need to compromise and participate in different unions – some of which mean surrendering some decision making.

    Independence is the freedom to walk away. In that very real sense, the fact that the referendum is taking place (and can basically take place anytime in the future at the scots choosing) means that independence is already won.

    In contrast the catalans (for example) dont have independence.

  • Mick Fealty

    You like the sound of a compromise in a union with just one other country (the one you want to break free from) whose economy is ten times greater than your own?

  • megatron

    what I mean is that the population of scotland will decide (assuming no) that the best interests of the country is to stay in that union with one other country even if the terms are pretty poor (we can debate that at length either way).

    My point is they already have independence which is the freedom to walk away. They may be poorer by walking away but they can if they want, whenever they want.

  • megatron

    And obviously the size of the country impacts on its bargaining position in relation to all unions – see Ireland, Republic of.

  • Droch_Bhuachaill

    Didn’t the Free State retain monetary union for a (long) time? In fact, wasn’t the majority of our independence periods when we used either a pan-national currency or a currency directly linked to the £?

  • Mick Fealty

    They pegged punt to pound, which is what half the world has done with the dollar. If that arrangement constituted a currency union would mean the Fed copping for the debt of those countries. See the problem?

  • megatron

    I can understand why the yes campaign went for the as little as possible will change strategy. I also agree with Mick that this was not a great idea.

    An alternative strategy (aka the truth) would have been to say we dont know how things will turn out in the future but there are many options and things will almost certainly change many times in the future. This debate is about whether we should try and do things on our own.

    I am not sure if you are implying some sort of economic calamity if Scotland voted yes Mick but I personally believe that was unlikely. Nothing is certain though – a bigger mistake is assuming a no vote brings certaintly when it does not.

  • Droch_Bhuachaill

    I’m afraid I don’t Mick,

    and that’s just because I am an amadán when it comes to finance. I should have stuck to Business Studies instead of Building Construction in school…

  • Kensei


    I remain unconvinced off your credentials in this area. Not that mine are any better either, but I’m much less confident.

    These arguments essentially revolve around what happens in a crisis. If Scotland has control of its own currency, whether pegged or not that means either (1) they can devalue by reducing the peg or (2) the central bank can print money. They have debts denominated in their own currency which means they aren’t at risk of currency fluctuations impacting their debt situation. What does it matter if it is the BoS or the BoE printing currency?

    Secondly, bank debts are private debts. They are guaranteed by government because of systemic risk. But Ireland didn’t have to bail out the banks, and many people argued they shouldn’t. Iceland didn’t. If Scotland doesn’t, England might have to if they remain systematically important to that economy (so if RBS defaults, English banks now have a hole)

    There might be costs involved – higher interest rates, currency appreciation, relationship with England in the event of allowing default. But simply pointing to backstop makes no sense, from my rudimentary understanding of the mechanics. Currency union might be a worse option. It certainly was for the Republic in the Euro.

  • Red Lion

    Why are the LibDems not pushing their ideal of a federal UK at this time?

  • Neil

    You’ll not be the first or last to pronounce the death of iScotland but you’re probably the first to use a 5% bounce in the polls in favour of a yes vote as part of your case. There are plenty of options, and I have yet to see any evidence that Salmond hasn’t played his cards wisely, and slowly. People will get more and more fed up with alternating condescending platitudes and threatening behaviour. They also get weary of the debate which is why I believe Salmond’s leaving the real campaign til late on. The Yes campaign’s barely started and every time project fear open their mouths they increase the yes vote.

    Throw in any likelihood of a (Scottishly) unelected Tory government and a euro referendum for the SE and it’s all to play for. Salmond can choose his timing wisely and I don’t see any failure on his part to do precisely that, every single utterance coming from the Bullingdon boys has done him a favour.

    As one man said on twitter quite recently that they’ll tell you we’re all in it together and you’ll die from cold in your flat next winter with an oil rig in sight of your window. Every piece of nasty party legislation helps too, disabled people dying in their houses, terminally ill cancer patients deemed fit for work, food banks struglling to keep up with demand, bedroom taxes and so on. Why would the Scots want to leave?!

  • IJP


    I think the whole point here, too often missed, is that Scotland would not be “free” to walk away. It would always be highly dependent economically on events in England.

    But then (and this is where I get to the “whole point”), 1 dollar in every 12 borrowed by the United States Federal Reserve is borrowed from the People’s Bank of China – who lend because the United States then uses to the money to protect a consumerist economy buying Chinese goods which helps protect a booming export industry etc etc.

    That is the crux of the financial crisis; but more even than that, it demonstrates the complete and ludicrous folly of the word “independence”. Even the two main global powers are utterly “dependent”!


    My instinct is similar to yours – indeed, I believe it is still conceivable that “Yes” will yet collapse to below 30%.

    Yet on the other hand, I don’t think the SNP will have given up completely.

    Firstly, we all surround ourselves instinctively by people who broadly agree with us. I know quite a few Scottish Nationalists, most of whom think they’re still in it because “everyone I speak to is going to vote ‘yes'”. Of course, everyone they speak to is not a fair cross-section; furthermore, an apparent note of accord (say “Well I certainly agree Scotland should make its own decisions”) is not necessarily the same thing as a “Yes” vote.

    Secondly, it is just about possible they could get close, if only because there is a strident (and in my view frankly appalling) anti-English element in modern Scottish society. This is what Mr Salmond is aiming for with his ranting about “bullying”.

    This is where it does get very interesting for us in NI. Frankly, objectively, the SNP case collapsed this week (they were told no currency union and good luck with the EU) at a rational level. But do people vote rationally when it comes to Nationalism?

    We’re about to find out…

  • Mc Slaggart


    “the reason Salmond is likely to lose in September is not the polls, its his government’s over simplification of the currency problem that will kill the Yes campaign dead. ”

    “The poll’s headline findings suggest that, if anything, the “no” side’s stratagem has not only failed to deliver any immediate boost to the Unionist cause, but has actually backfired.

    The poll puts the “no” vote on 47 points, down five on a poll Survation conducted just a fortnight ago.”

  • Neil
  • IJP

    I wouldn’t get too excited about that latest Survation poll. I’ve seen the tabs and frankly the weighting is bizarre.

  • Neil

    I’ll choose to assume John Curtice, “one of the UK’s leading psephologists” and president of the UK polling council has perused the same information prior to commenting on it. Sorry Ian but I elect to pay more attention to his views than your own, learned as you may or may not be.

    The poor madman that he is seems to think that George Osborne’s decision to rule out a currency union in a speech in Edinburgh last Thursday had “backfired in spectacular fashion”.

    It’s also consistent with the Times/Panelbase survey of 6th Feburary which found support lagging a whole 1% behind the Survation poll after Gideon’s comments. If you get a chance you can perhaps explain where they are going wrong also.

  • Comrade Stalin

    My instinct is that the currency broadside against independence launched from London has taken the spring out of the SNP’s step and Salmond is struggling to respond to it – which surprises me given that he is a pretty shrewd operator and should have seen this coming a mile off. His various responses which appear to appeal to base nationalism rather than a calm consideration of the economics suggest that he was wounded.

    The argument itself looks even shakier than it was before when it is Salmond himself who is arguing that an agreement on the pound is inevitable due to the significant dependencies between Scotland and England – taken to its logical conclusion, that argument must could only mean that it is better to maintain the union. It is becoming less clear what Salmond actually hopes to get out of independence that he would not get from Devo Max other than being able to not spend money on Trident.

    I’d feel much less confident about predicting a Scottish independence vote. The bookies appear to feel the same way. When I checked a week ago most bookies were offering around the 3/1 ballpark; it’s now heading closer to 4/1 – Ladbrokes are now at 7/2.

  • Comrade Stalin


    All I’d say is, the bookies aren’t often wrong.

  • Neil

    When I checked a week ago most bookies were offering around the 3/1 ballpark; it’s now heading closer to 4/1

    As you’ve noted CS, odds change, and it’s no surprise that they dipped after Gideon’s intervention. But the difference between 3/1 and 4/1 is the same as 3/1 and 2/1, and you know what they say about short odds favourites playing away from home 😉 They lose more than they win.

  • Angus McLellan

    Comrade Stalin: You sure about the direction of movement? Paddy Power are offering 11/4 on Yes, first time I’ve ever seen shorter than 3/1, and most look to be unchanged at 3/1-7/2. I surely won’t put any more on – can’t see me getting 9/1 on Yes again.

  • Mick Fealty

    Can I make it clear that I have no more authority to speak on this matter than anyone else. So, to state the bleedin’ obvious, I could be very wrong here.

    Put my arrogance down to long experience of Irish referendums.

    It seems to me people look at the option they believe the Scottish people ‘should’ choose and convince themselves there is no rational reason why they should not do so.

    I thought the same of the proposed tenth amendment of the Irish Constitution, which proposed the legalisation of divorce. Nothing more reasonable you might say.

    What right the state to impose Catholic doctrine on its Protestant, Jewish, Muslim or Hindu citizens?

    My memory of it is that the Catholic Church sat it out until the last Sunday before the Referendum. Until that point the polls were unequivocally 2/3 in favour and 1/3 against.

    Then came a bishops letter the Sunday before condemning anyone voting yes as not acting out of Catholic principles.

    Within days the positions flipped with 63.48% voting no, and a paltry 36.52% going for yes.

    Uncertainty kills any positive proposal for change in a referendum. Look at the latest Seanad abolition referendum? 72 per cent yes in spring, 51.73% no to 48.27% yes in the autumn.

    If there is a silver lining for the SNP, the Scots will not like being ‘forced’ to vote for the Union under such negative influence. I’m not saying it will become as distrusted as the Catholic Church has become in ireland, but there are lessons there.

    But for all the burgeoning popularity of the SNP as a governing party, getting out of the Uk is a damned sight more complicated than it looks.

    Scotland may well have the cash flow to keep it going, but the entrance fee into the community of nations may prove more ruinous than anyone previously considered.

  • Tochais Síoraí

    ‘…. But the difference between 3/1 and 4/1 is the same as 3/1 and 2/1, and you know what they say about short odds favourites playing away from home 😉 They lose more than they win….

    Wrong on both those counts, I’m afraid, Neil. Still, that 7/2 Yes is a bit of value imho – should be a bit skinnier, I reckon. The Yes vote seems solid enough & there are a lot of soft No.’s. Events dear boy and all that could come into play yet.

  • Comrade Stalin

    I’m definitely not a gambling expert despite any suggestions to the contrary (won some nice money on Naomi Long winning her seat at 100:1 odds – a once in a lifetime bet, I suspect) and I’ve not been monitoring the odds closely, but it looked like they were shifting slightly towards yes.

  • Seamuscamp

    “it’s hard to see what grounds anyone in the EU would have for saying no.”

    Might not Spain have some reason?

    The problem with the Salmond approach is that, every time a negative is thrown in his path (currency, pensions, Euro, EU membership, shipbuilding, debt) he argues that the opposition must invitably change its mind. As if there is no risk in independence. But then he was a banker in former days and we all know how averse to risk bankers are.

  • IJP


    I doubt John Curtice had seen the tabs actually. My view is backed by UK Polling Report, also run by one of our leading pollsters. So, you know…

    Here’s the thing: a statement saying “I’ve seen the tabs and the base of the poll is different so don’t pay much attention to it” is not going to get a headline. Whereas “Oh, I hadn’t seen that. Well yes, a 5-point swing does look like a significant backfire” does get you a headline. You’ll report the second but not the first.

    It is clear that the overall polling trend (backed by bookies) is ever so slightly towards “yes” – more so among bookies because more people will be putting money on “yes” as it comes with a bigger reward.

    Don’t forget, the bookies are also cute enough to make sure they don’t lose overall. In a two-way fight, they’ve one side at 3/1 but the other at 1/5. Even if I were a betting man, I’d keep my money in my pocket!

    For what it’s worth, I’m with Mick that the late swing will actually trend towards “no”. I’d say it’ll be around 35% “yes”. But I wouldn’t be confident enough to offer you odds…!

  • WindsorRocker

    So currency union would mean Westminster can control fiscal policy?

    So what is preferable?

    An independent Scotland that will elect permanently left of centre governments but will have to operate under fiscal controls dictated by a more likely right of centre government in rUK


    A devo max Scotland within the union where the left of centre Scottish electorate can swing the balance of power where fiscal policy is decided?

  • IJP

    Obviously the latter, WR.

    Btw, the odds on a “yes” vote have definitely lengthened recently – 3/1 was typical and it’s now 7/2 with most.

  • Comrade Stalin

    IJP, yes that’s what I’d noticed. And I thought the lengthening of the odds coincided with what I would characterize as the SNP reeling from the fallout of the UK government rejecting the possibility of a currency union.

  • Neil

    Obviously it did CS as the bookies will initially base the odds on what they think should have been the effect of Osbourne’s intervention. Accepted wisdom directly after his comments suggested that it was a hammer blow against Salmond, however I see the odds dropping for yes again:

    4/1 is no longer available for yes with most bookies at 3/1, and 2/9 replaces 1/5 with most bookies for no. This is because what people mostly expected Osbourne’s intervention to achieve hasn’t transpired and the bookies will now factor that in.

    Incidentally, surprisingly, the Scottish vote has affected the Westminster result for two years in the past 67 apparently. So the choice is between having no impact in Westminster and having economic policy dictated from there or having a locally elected government and still having economic policy dictated from Westminster. Your preference for WR’s latter is not an option, as the Scots cannot swing the election in England more than 98% of the time.

    for 65 of the last 67 years, Scottish MPs as an entity have had no practical influence over the composition of the UK government. From a high of 72 MPs in 1983, Scotland’s representation will by 2015 have decreased to 52, substantially reducing any future possibility of affecting a change.

    Finally to IJP’s earlier assertion that the premier polling expert in the UK might have been commenting from a position of ignorance (unlike NI’s premier polling expert, IJP), what can I say. You assume he didn’t acquaint himself with the methodology, I assume he did. Maybe your expectations of a slap dash approach by an expert on the subject of his expertise reflects more on you than him. Most people I’d assume, who’s reputation and career rely on accurate statements on a given topic would do due diligence. We’re not all politicians IJP, free to talk nonsense or shoot from the hip. Some people are quite professional and responsible you know.

    I also note, again, that the results of the poll you think we should not get too excited about are consistent with the Times poll on February 6th. Why is their poll also wrong, can you offer your expert analysis for the benefit of those naive pollsters? There is a difference of 1% in support for Yes between the two polls.

  • Charles_Gould


    Not complaining about you here but that blog that says:

    ” the Scottish vote has affected the Westminster result for two years in the past 67 apparently”

    …it takes creative accounting through dishonesty to bad maths.

  • Comrade Stalin


    I never actually saw 4/1. If you see my comment, I said “heading towards 4/1”.

    Looking at oddschecker I’m not seeing any movement in the Yes odds. It’s all in the 7/2, 10/3 ballpark.

  • Comrade Stalin


    Also you seem to be under the impression I’m making some sort of argument for the No campaign. I’m not; I’m observing that the Yes campaign aren’t doing a very good job and that they did not respond effectively to the currency broadside from London.

    It’s hard to have confidence in a campaign which apparently failed to anticipate this kind of jiggery pokery from the Tories.

  • Neil

    I saw 4/1. I don’t see it any more. Yesterday 7/2 was the most common odds offered, today that’s 100/30. The change is slow, but the odds are dropping.

    Not complaining about you here but that blog that says:

    ” the Scottish vote has affected the Westminster result for two years in the past 67 apparently”

    …it takes creative accounting through dishonesty to bad maths.

    Charles, take another look. There were elections in February (where Scottish votes made a difference) and October (when they didn’t), that gives a total of 8 months.

    In October 1964 the Scottish votes counted again, until the next election in March 1966 (where Scottish votes didn’t matter). That gives 15 months.

    That gives a total of 23 months. Or just under 2 years.

  • IJP


    I saw nothing higher than 3/1 two weeks ago. I do now!

    I don’t think the currency thing has gone well for the “Yes” campaign; and it will in fact continue to play poorly. People don’t vote for uncertainty.

    Btw, the odds put the likeliest outcome 41-59. That may not be far off (though I’d still be inclined at this stage to bet on a lower “yes” vote in the end).

    Things can still happen in seven months, though!

  • Kensei

    So Krugman, who I rate on these issues somewhat more than Mick, weighed in suggesting using a shared currency is probably a bad idea:

    He alludes but doesn’t explictly state a Scottish pound would be the best option with independence. But what ever the economics it fails the political economy, which is the key point.

    In other news, Wings Over Scotland busted it’s funding target in about 8 hours:

    This was 50% more than Scottish Labour did in all of last year:

  • Kensei

    Key point for the debate, I mean. I suspect a more honest debate on currency would follow shortly after independence had been secured. Or the first crisis.