And is an excellent reason to leave the failing UK
Leah Gunn Barrett
The letter below was published in the December 30th edition of The Scotsman. In it, I respond to Jill Stephenson, a member of the Scotland in Union group of letter writers. She appears regularly in the unionist papers letters pages. A retired professor of modern German history, she should stick to history and steer clear of economics, a subject about which she knows very little.
Jill Stephenson (Scotsman letters page, December 29th, 2023) again displays her economic ignorance.
First, why shouldn’t Scotland benefit from pandemic financial support as it’s still part of the UK, financial largesse being the chief advantage according to Ms Stephenson?
Second, Scotland doesn’t have a central bank. It relies on the Bank of England, owned by the UK government. Its job is to create money to enhance the nation’s wellbeing, which it has generally failed to do. In 2020, the Treasury instructed it to create £400 billion to support people through the pandemic which it did by tapping a computer keyboard. None of this new money added to the UK’s debt, because a central bank can’t owe money to itself.
Third, Ms Stephenson doesn’t understand what the national debt is. It’s comprised of government bonds and national savings held by citizens, pension funds, life assurance companies and foreign governments, who save with the government because it’s the safest place to put their money. They know the government, as a sovereign currency issuer, can always create the money to repay. It will never go broke.
These savings increase our wealth and ensure the smooth operation of the banking system, pensions, and foreign exchange markets. If all government bonds/debt were repaid, banks would fail because they wouldn’t have the money to function.
The only constraints on government spending are inflation, resulting from too much money chasing too few goods, and bumping up against the productive limits of the economy. We are nowhere near either at the moment.
Because the UK government has managed its budget like a household’s when there’s no need to do so, it has chosen not to use the power of its sovereign currency to improve people’s lives, but to pander to the parasitic City of London.
Scotland’s future prosperity depends on creating the institutions and policies to harness our resource wealth and develop the human potential of all Scots, an excellent reason to leave the failing UK.
Talking-up Scotland 'Albatraz' 
Oh I do love it when somebody rubs the Historywoman’s nose in her own words. It’s a toss-up on twitter to decide whether she or Effie Deans is the most repulsive poster.
LikeLiked by 5 people
As an independent nation, are there safeguards in law or in a constitution that could guard against Edinburgh’s or Glasgow’s financial centres from becoming mini London?
LikeLiked by 2 people
At this point in time in the UK there is no formal written Constitution and such safeguards as exist are the “powers” (I use the word loosely) of the Financial Conduct Authority (FCA) to regulate inter alia markets and the “casino banking” of the City of London. It was the lack of effective regulation which brought about the financial crash of 2007-8 and Tory deference to the ‘market’ has resulted in lessons not being learnt.
An independent Scotland must have an effective Constitution to define the limits of politicians’ powers and provide a framework for legislation to enforce the Constitution’s aims. Likewise, post-Indy, we must create an effective institution and laws to regulate the economy, covering central and commercial banking, investments, stock markets etc in order to avoid making the UK’s mistakes which have benefitted the better off to the cost of the poorer.
Coinneach
LikeLiked by 4 people
Scotlands currency exchange was closed down by Margaret Thatcher early 80,s everything moved from Scotland to London our Scottish banks moved there too and then they weresold to the highest bidder.
I live in Dundee , we used to have Clydesdale banks , Linen banks , Dundee Savings banks etc etc , all gone.
Once scotland is independent they will come back
LikeLiked by 5 people
Lets get our sovereign Country FREE OF FOREIGN INTERFERENCE
LikeLiked by 3 people
Its worthwhile reading Richard Murphy website report on national debt once you read it everything makes sense and the trickery of british politics is very clear.
Government debt is your savings and everyone elses savings in uk banks plus other forms of savings such as future pension funds , the government can print money but it cannot owe itself money and nearly half of what the current conservative government includes in its so called national debt is actually money that it says it owes itself.
What is particularly annoying is that when banks in the uk are about to go bust after mispending on stock exchange gambling and property speculation through the city of london the government via its bank of england which is just the treasury its not an actual bank , gives these banks free money whichbis then counted as national debt as well and to put the icing on the cake for these private wayward banks the government then gives them interest payments each year on the free money they have already been given.
Its like yer mum and dad saying here take this £100 seeing as you blew all your own money in the bookies and by the way you dont have to pay it back and furthermore please take this other £10 its the 10% interest on the free £100 we already gave you.
LikeLiked by 1 person
Well said TGC. I too follow Richard Murphy, and while not pretending to understand completely all of his advice, he makes good points about the lack of understanding of the U.K financial wellbeing by the two major political parties at Westminster.
Now whether this is deliberate, or just plain stupid I don’t know, but by staying with their mantra, we are condemning future Scots to a bleak future. Independence is the answer, but when?
LikeLike
Indeed well responded to Stephenson, but she’s repeating the same macro-economy claptrap London politicians have been peddling for many years, most famously the ‘good Grantham housewife’ and her household budget.
Seconded on reading Richard Murphy’s blog, where he had a follow up piece on the national debt… https://www.taxresearch.org.uk/Blog/2023/12/31/tackling-the-nonsense-talked-about-the-national-debt-and-its-cost/
Another who doesn’t pull his punches is one of Richard’s buddies, Danny Blanchflower – As guest on a recent Welsh Youtube channel, he wasted no time in predicting disastrous consequence for the UK populace on foot of incompetent economic decisions made by government in order to deliberately create a recession, the only winners, the banks…
Chilling to consider it won’t matter a damn who’s in government, Labour are wedded to the same economic ideology which brought you the 49 day shelf-life Lettuce….
LikeLiked by 1 person
Westminster is deciding how £50Billion – half – of Scottish revenues are spent. Not in Scotlands interest but the interest of the rest of the UK. Borrowing and spending more in the rest of the UK. Scotland has to make repayments on the debt.
Scotland raises £87Billion. Spends £54Billion. Westminster decides and spends the rest of Scottish revenues. £106Billion claim by Westminster.
Westminster UK raises £731Billion in taxes . Spends £1090Billion.
The rest of the UK raises less and spends more pro rata. Scotland has to make debt repayments on monies not borrowed or spent in Scotland.
Scotland £30+Billion grant. £24Billion Benefits/Pensions. Westminster spends the rest on illegal wars, tax fraud, Trident, nuclear decommissioning, HS2, Hickley Point etc, with no business case. Brexit costing £Billions in lost revenue. All totally poor, bad decisions affecting Scotland negatively.
Westminster spent £270Billion on funding Covid over two years. Much of it was wasted. £Billions. Spreading Covid. Westminster poor, bad Covid, lack of planning, to concentrate on Brexit. Another poor, bad decision of total mismanagement.
Election in May? To get rid of the Tories and vote for Independence. Independence supporters get out and vote for Independence Parties.
UK whole accounts. 2020/21. Published 2022. Last accounts. Scottish Gov accounts. On internet. Or Google.
LikeLike
WEll Said
LikeLike