My reply to Murphy’s Agenda piece in The Herald. Bit long for the Herald to print it themselves. Read Murphy’s article here, http://www.heraldscotland.com/comment/columnists/agenda-working-families-would-pay-price-of-obsession-with-leaving-the-union.23684170
Jim Murphy’s Agenda piece in Monday’s Herald adds nothing to the independence debate and seeks only to resurrect old fears and engender new ones. He starts by stating that independence would be disruptive and that, for nationalists, is what ‘makes separation so alluring’. This is both nonsense and insulting. Anyone reading the Scottish Governments proposals can see that they are clearly designed to make the transition to independence with as little disruption as possible and to continue close cooperation with the rUK in those areas where it is beneficial to both countries.
He also makes comparison of this perceived disruption with the 1970s oil crisis, Thatchers 1980s deindustrialisation and the 2008 financial crash. These comparisons border on the ludicrous but allow Murphy to trot out the old and inaccurate story of the UK rescuing Scottish banks. This one has been done to death and most people now know that these banks are British banks whose ownership was largely outside Scotland as was their business. Their toxic debts and investment banking operations were largely acquired through takeovers of English banks. The crisis arose under Westminster banking rules and Bank of England supervision.
The UK did not perform an act of altruism for Scottish banks, it rescued its own banking system. Mr Murphy says it was able to this because the UK has broad shoulders. The UKs broad shoulders are as illusory as those on Joan Collins jacket from Dynasty. The truth is the UK has a credit card which it is rapidly maxing out and a printing press in the back room.
He follows this by insulting the intelligence of the Scottish electorate once again by informing us ‘that a vote to leave the UK is irreversible’. I think people can work out what independence means. Mr Murphy could perhaps provide us with some examples of countries that having made the move to independence have wished to reverse that decision. He’ll have a long search.
We then come to the nub of his argument that independence would increase interest rates and like the other financial upheavals he mentioned would impact mostly on the poor and the lower middle classes. We can agree that financial shocks affect the poorest in society more than others. It was ever thus.
We have a Conservative run government that is punishing the poor and the most vulnerable with their welfare cuts and policies that do nothing to encourage economic expansion and job creation for our unemployed. 80% of UK jobs created are in the London area. The financial elite who are largely responsible for our current position carry on as if nothing has happened, still paying themselves huge bonuses. As food banks proliferate across the country do Mr Murphy and his MP colleagues rage with anger? No they turn up at the openings to take a photo opportunity.
Not long ago Better Together were shoving leaflets through our doors lauding the UKs AAA credit rating and George Osborne was staking his political reputation on it. Since then the AAA rating has been downgraded by two of the three main credit rating agencies. In an independent Scotland we were told this would trigger the equivalent of Armaggedon but in fact it has made little difference to interest rates at all.
Mr Murphy tells us ‘the expert evidence tells us that interest rates would be higher’. In fact economists have varying opinions on the impact of the different currency options available to an iScotland, all of which are viable. The rating agency Standard and Poors has proclaimed that an independent Scotland, even without oil revenue, would attract its highest assessment.
The UK is one of the most indebted countries in the world. What is little discussed in our media is the devastating effect on the credit rating of the rUK of an increase of £130bn of debt coupled with a simultaneous 10% shrinkage of the economy. An economy it relies upon to both service and reduce that debt. Despite austerity UK debt continues to expand at around £10bn per month. That is the scenario the rUK faces if there is no agreement on currency union and Scotland does not agree to service any of the UKs debt. This situation would be further aggravated by the loss of Scotland’s exports which would virtually double the rUKs already chronic balance of payments deficit.
If Mr Murphy truly believes in the situation he has outlined, if he truly wants to help the poor and the lower paid both in Scotland and the UK as a whole there is something he can do. Instead of scaremongering along with the rest of the Better Together naysayers he would be better employed encouraging his shadow chancellor Ed Balls and Mr Balls new best friend George Osborne, to embrace a currency union post independence and in the event of a Labour victory in the rUK general election of 2015 to drop his plans to continue the austerity regime of the Tories.