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The Killer Blow

Scotland not only can become independent in economic terms, but the direction of UK travel post-Brexit means that it must.

Thursday, November 2, 2023
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Richard Murphy’s recent appearance on  BBC Scotland’s ‘Debate Night’ (first of the links at page end) reminded us to feature some of his informative and encouraging work. 

A supporter of independence, he has also been critical of some of the economic arguments that have been made in favor of it.

Murphy's research has focused on a number of areas, including:

  • The potential economic benefits of Scottish independence, such as the ability to set its own tax and spending policies.
  • The potential economic risks of Scottish independence, such as the loss of access to the UK's common currency, the pound sterling.
  • The economic implications of different currency arrangements for an independent Scotland, such as using the pound sterling, adopting a new currency, or joining the euro.

Murphy's work has been cited by both supporters and opponents of independence, and been used to support a range of different economic arguments.

In general, Murphy's work suggests that Scottish independence could have both positive and negative economic consequences depending on one's viewpoint. Potential benefits include the ability to set its own tax and spending policies, which could lead to higher levels of public spending and lower levels of taxation. However, there are also potential risks, such as the loss of access to the pound sterling, which could lead to higher interest rates and inflation. (As an aside, we refer readers to our article on German economist Richard Werner, here: Off-Topic Scotland | The Cost of Cognitive Dissonance (offtopicscotland.com) )

Here are some of the key points from Murphy's work:

  • An independent Scotland could have a strong economy, but it would need to make some difficult choices about its currency, tax, and spending policies.
  • The loss of access to the pound sterling would be a major economic challenge for an independent Scotland, but it could be overcome with careful planning.
  • Scotland would be able to set its own tax and spending policies, which could lead to higher levels of public spending and lower levels of taxation.
  • An independent Scotland would have to negotiate new trade deals with the UK and other countries.

Won’t Be Fooled Again?

Many readers will remember the set-piece clashes between then First Minister Alex Salmond and Alastair Darling, ex-UK Chancellor and chair of Better Together, in August 2014. According to some onlookers such as Iain MacWhirter, these ‘debates’ damaged the Yes campaign because Salmond was perceived by many viewers as being not sufficiently clear on the question of currency. 

With the benefit of hindsight it is clear to see that the currency question was always going to make or break the Yes campaign. Indeed, the stage had been set by Chancellor George Osborne some six months previously:

‘On the evidence of the first TV debate the Unionist strategy seemed to be going to plan. Better Together had elected to turn the referendum into what was essentially a single issue campaign based on the future of Scotland’s currency. The policy was unveiled by the Chancellor George Osborne on the eve of St. Valentine’s Day 2014. Osborne came to Scotland on a day trip to deliver, before an invited audience, a blunt threat to the Scots: “The pound isn’t an asset to be divided up between two countries after a break-up like a CD collection”, he said. “If Scotland walks away from the UK, it walks away from the UK Pound”. The Tory Chancellor then walked away himself, refusing to give any television interviews, visibly angering STV’s political editor Bernard Ponsonby, who pursued him all the way to his people carrier, firing questions. It was the key moment of the entire campaign. The previous two years since the signing of the Edinburgh Agreement, in which Alex Salmond and David Cameron had agreed on the referendum ground rules, had all been shadow boxing. This was the killer blow.’

Iain MacWhirter, Disunited Kingdom, pp.35/35

(31) Scotland's Referendum 2014 - STV News on George Osbourne Speech 12/02/2014 - YouTube

The currency question is so important that independence supporters must remain aware of the legitimate concerns felt by many. That their concern can be easily exploited by characters such as Darling and Osborne is all the more reason to ensure that fearmongering is debunked as soon as it starts. Any hesitation in dealing with it is viewed as weakness. With that in mind, we hope readers will dip into the following links - they may be useful in the future as and when this issue reappears in the mainstream debate.

Debate Night: As good as it gets (taxresearch.org.uk)

(277) English economist Professor Richard Murphy explains why GERS figures are total nonsense - YouTube

(277) Richard Murphy: Today's economic chaos proves Scotland needs to leave the UK - YouTube

(277) Will Scotland be better off independent from the UK? - YouTube

(277) Your questions on GERS answered LIVE by top economics expert - YouTube

(277) SCOTONOMICS: Ep 36 LIVE with Richard Murphy - YouTube

(277) Richard Murphy at Holyrood, Finance and Constitution Committee - YouTube

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