The Scottish Pound

We are still hearing a lot of nonsense about a possibly independent Scotland and its currency.

'Walking out of the UK means walking out of the UK pound' George Osborne is reported to have said. I haven't read what he actually said, because I can't be bothered, but he should take care that reportage of his speeches does not come out as utter drivel or loose thinking.

Of course Scotland can keep the pound: it just keeps printing out its Scottish pound notes and fixes their rate at 1:1 to the British £. At present the Bank of England holds £1 for every Scottish £ printed. Also it stands by Scottish Banks as lender of last resort. It is these two things which would change, unless we had a currency union.

As to allowing a currency union in return for Scotland permitting our nuclear weapons at Faslane, the suggestion is risible. Why would we want our nukes in a foreign country? Put them in Portsmouth which already has the skilled workforce and traditions to cope.

Scotland would be very unwise either to seek a currency union or simply to adopt the UK£ as its currency because it would result in it being overvalued and causing a recession, such as we see in Southern Europe today, which has had a vastly overvalued currency (the €) for years, caused by political will rather than economic sense. Thousands of Scottish jobs would be lost.

Let's adopt a simple policy. If they go, they go. They can adopt the Japanese yen as their currency for all I care but they get no help when the plan fails.