Lamont teams up with Treasury to reel in Salmond

It has been an unfortunate week for Alex Salmond, who was reprimanded by both the Scottish Labour Party and the Treasury in the space of 24 hours.

E-mail-sign-up Donate

 

.

It has been an unfortunate week for Alex Salmond, who was reprimanded by both the Scottish Labour Party and the Treasury in the space of 24 hours.

After an especially savage grilling by leader of the Scottish Labour party Johann Lamont, Salmond claimed that it would be “entirely reasonable” for a separate Scotland to have the same influence that the UK Treasury does over the Bank of England’s monetary policy committee (MPC).

Watch the exchange at yesterday’s First Minister’s Questions:

The Scotsman reports:

Pressed by Ms Lamont to provide “details of that agreement” that would allow an independent Scotland influence over the Bank of England, Mr Salmond insisted it would be “entirely reasonable” for a separate Scotland to have the same influence the UK Treasury has over the MPC and that there was “nothing unusual about that” arrangement.

He told the Scottish Labour leader he had spoken to Sir Mervyn King, Governor of the Bank of England, in February, but he did not say what he had discussed with him.

He told MSPs that, in the event of Scotland becoming independent, it would “expect to be part of the appointments process” if it continued to use the pound.

But a spokesman for Mr Salmond was later unable to give examples of similar arrangements of other nations that share a currency having representatives on the body that sets interest rates.

 


See also:

Cameron heads north, Salmond heads south and Mervyn’s living in the future 16 Feb 2012

A separate Scotland will be worse off if it keeps the pound 10 Feb 2012

Swinney on Scotland currency – more questions than he answers? 2 Feb 2012


 

Unfortunately for Salmond, the treasury were quick to rebuke his claims in a statement released yesterday:

“In that scenario, [an independent Scotland] would have no say over its own monetary policy as set by the Bank of England.”

Left Foot Forward have already reported on how an independent Scotland would be worse off keeping the pound:

The most crucial part to understand about sterlingisation is that a separate Scotland, without a currency board, will have no control whatsoever over monetary and exchange rate policy. Salmond has been mistakenly pushing the argument that goes along the lines of:

‘The Bank of England has had independent control over monetary policy since 1998 and therefore will continue to take Scotland into account.’

Not so. The Bank of England is currently obliged to regard the effects its decisions will have on Scotland. Without Scotland being part of the UK and with no currency board, this will not apply. In other words, decisions that have an impact on Scotland will be taken in another country that is focused on stabilising the national economy, not the Scottish one.

Instead of actually attaining independence, a separate Scotland will ironically tie itself to the rest of the UK through the importation of the effects of monetary policies conducted by the Bank of England.

Why is Salmond so desperate to push for an independent Scotland, or as he calls it “a sterling zone”, which would allow the Bank of England to disregard Scotland when creating monetary policy?

 


Sign-up to our weekly email • Donate to Left Foot Forward

Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today. 

62 Responses to “Lamont teams up with Treasury to reel in Salmond”

  1. Anonymous

    De-Nile.

  2. Anonymous

    Ah yes, keep ignoring the Gerrymandering. It suites you do it, of course.

    Tory.

  3. Anonymous

    Tories like you in the SNP, Totalitarian Social Darwinists who view deviance from your party line as mental illness, are just that even if you won’t admit it to yourself.

  4. Anonymous

    So, why are you calling for that again?

  5. Spammo Twatbury

    Gerrymandering? Do you even know what the word means? Evidently not, as it appears you have trouble reading facts you dislike. What’s the story in Balamory? Vote Labour, get Tory.

  6. Anonymous

    Yes, I do know precisely what it means. Of course you have to deny it.

    And when you pretend to be Labour but are Tory, yes, that’s exactly what you’re setting people up for. Strange you’d boast about it, but hey.

    It all adds up to what you’re planning…which would be highly unfortunate for the populace as a whole.

  7. Robert Ryan

    if you missed Johann Lamont absolutely take Alex Salmond apart here it is again: http://t.co/V9jdJeDC #ScottishLabour #sp4 #fmqs #SNPfail

  8. Darren Hughes

    Johann Lamont and Alex Salmond clash on the economics of Scottish independence http://t.co/aYQ8e8kj

  9. James Mills

    Left Foot Forward's take on FMQs this week. http://t.co/7N8dwoYW

  10. Anonymous

    The bank of England does not take Scotland into account any more than it does the West Country or the North of England..or Wales…or anywhere else other than the London area.
    On the question of ‘shaky history’ ….the Scottish referendum is not about ‘secession’, it is about the dissolution of the Treaty of 1707; the Acts of Union in the Englsih and Scottish parliaments of 1706-7 are not relevant in the slightest since they were both no more than enabling legislation to dissolve themselves in favour of a parlaimentary union. This is not an aspect that is widely understood, but neither the Treaty nor the Acts are particularly complicated, so it is worth reading them.
    Hard to see how it would be necessary to pay for using Sterling; it is currently a shared currency across the UK and ijn any case that’s not generally how shared currency arrangements work. Remember that – despite the name – the Bank of England is, really, the bank of the UK. In the event of dissolution, if Scotland were to inherit a share of the UK debt it would also inherit a commensurate share of the UK assets, not simply those that happen to be located in Scotland. Naturally there would be a good deal of horse-trading; there are very few defence assets that the reamining UK coukld afford to dispense with and very few that would be desirable for Scotland, so debt/asset share is not simply a matter of crude arithmetic….Scotland would not want Trident, nor a share of the massive range of government buildings in England so that would be reflected in the share of debt. Equally, the remaining UK would probaly have very little interest in having a share of the assets of the Scottish court system (or Scotland in having a share of the asets of the CPS). I doubt that dissoultion will come to pass, but there’s no point in ignoring the possibility or in being hostile about it if it does. A dog-in-the-manger attitude won’t help anybody. In the end of the day, if Westminsterr and Holyrood failed to sort it all out in a resaonably equitable manner voluntarily, the EU and the US would pressure them into doing so.

  11. Anonymous

    The possible arrangement of an independent Scotland with the Bank of England is less cut-and-dried.
    Because an independent Scotland could credibly threaten to leave sterling, it might be able to negotiate for a seat on the Bank of England’s Monetary Policy Committee. Scotland could be officially represented on the MPC, much as the Federal Reserve Bank of New York has a permanent seat on the Federal Open Market Committee of the United States’ Federal Reserve System.

    It is true that none of the seats on the MPC is currently regional, but that could be changed. The Bank of England has an incentive to agree to give Scotland a seat: it retains more seigniorage and more importance.

    if Scotland remains on sterling. Should the Bank of England refuse Scotland a seat, that snub would not bode well for a sterling victory over the euro in a Scottish popular referendum.

    It is true that there is no obvious precedent for giving an independent Scotland a seat on the MPC. Panama, after all, has been on the US dollar standard for more than a century without a seat at the table of the US Federal Open Market Committee. But Scotland is a much larger share of the sterling area, GDP-wise, than Panama is of the dollar area. And Scotland has historically been part of the UK, whereas Panama has never been part of the US

    Sterling should remain the currency of Scotland for the foreseeable future, because we’re part of a single financial area – and that’s true for both Scottish and UK governments. The iissue of the Bank of England being the lender of last resort is a bit of a red herring, since any government has ultimately to go to the markets to cover national debt.

  12. Anonymous

    “This is laughable, johann lamont gives the first minister a grilling”

    I agree effen hilirious. the writer is obviously viewing through Lamont tinted glasses.
    The only advice I could give is, should have went tae spec savers.

    Anyone who like Lamont takes a British Nationalist stance and supports a strong imperialist British state and the retention of Trident and opposes the Scottish peoples right to self determination by spreading lies and fear has no right to title of Left wing let alone Socialist.

    So who exactly is in the no camp along with the right wing labour party,

    well we have the Tories who labour are now in coilition with in some councils even though the tory vote was negligible.

    We have the Liberal sleep with anyone party [sounding like labour’s sleep with anyone to keep the SNP out policy]

    We have UKIP [ Nutter Tories on speed and ex-BNP members]

    We have the actual BNP with the one eyed Fuhrer

    We have the Ulster Unionist parties [Tories with N.I accents] and various dubious organisations like the UDA.

    And of course we have our very own Scottish Orange Order who Glasgow Labour council leader Gordon Matheson has been doing deals with to save both labour in Glasgow and the Union [we are not really supposed to call it Union as the no but more of the same camp has banned its usage in Scotland]

    Not exactly the most progressive bunch of bedfellows you could have.

    Labour party members should start to ask why are their leadership is happy to support a position that is supported by some of the most vile reactionary organisations in the UK and the only possible conclusion they could come to is because their own leadership is reactionary and supporting a reactionary position on Scottish self determination with a view to a future peerage

    More a case of the same old smelly right foot dressed up in worn out faded reddish socks

Leave a Reply