Politics muddies the waters of Scotland and the pound

It's simple, until it's not.

Simon Wren-Lewis digests the Treasury's report on the relationship an independent Scotland would have with sterling and the Bank of England (rUK is his shorthand for the UK excluding Scotland):

The real problem for Scotland is that, in forming a sterling currency union, it will be dealing with a government that thinks like Germany. What is worse, although Germany can sometimes be persuaded to go against its austerity instincts for the sake of European unity, after an independence vote rUK is unlikely to let its heart strings be pulled in a similar way! The problem for Scotland is that the rUK can provide something that in fact costs it very little, but the absence of which would cost Scotland a great deal, so rUK will be able to ask for a high price. Unless the new Scottish government is prepared to pay for a Bank of England LOLR role with some of its oil revenues, it may find it has nothing to bargain with. If no agreement can be found, the Treasury paper is quite right to conclude that using sterling unilaterally would not be attractive for Scotland. So rather than accept damaging fiscal restrictions, the new Scottish government may end up with its own currency after all.

George Osborne is right to present the Treasury's analysis as a stumbling block for the SNP, in other words; but he's slightly disingenuous in pretending that he has nothing to do with that fact.

As Wren-Lewis points out, politics muddies all waters. Normally, the study of Optimal Currency Areas is relatively simple: the more alike two countries are, the greater the benefits of having a shared currency, and the lesser the disbenefits. That's why the euro is such a startlingly bad idea on paper – there's basically no possible group of countries less economically, socially and politically coherent than the eurozone. And in in nations like rUK and Scotland, which are pretty damn similar, the whole deal comes down to one basic question: is the loss of flexibility of monetary policy a worthwhile cost to pay for those benefits?

But that assumes that there is any way a currency union between rUK and Scotland could actually exist as a union. It's a political, not an economic question: what possible scenarios can we imagine in which the Bank of England would view the Scottish economy as anything other than entirely subordinate to the interests of rUK's? And, moreover, what possible scenarios can we imagine in which an actually existing rUK government – as short-termist, economically-illiterate and vindictive as they tend to be – would allow that to happen?

It may just be the case that the rUK would be better off if the Bank of England carried its policy equitably, allowing the rUK to take a hit to ensure the continued strength of Scotland, which would be on of its biggest, if not the biggest, trading partner. But it's nigh-on impossible to imagine a rUK government letting the Bank of England incorporate that rationalisation into its mandate.

Compared to questions of fair allocation of public debt, North Sea Oil and monarchs (Scotland can have em, frankly), the question of Scottish monetary policy might seem boringly technical. But it's one of the most intractable problems standing in the way of Alex Salmond's dream.

Floating away. Photograph: Wikimedia Commons

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Getty
Show Hide image

Brexit would jeopardise the rights of working women

Europe isn’t perfect, but without it millions of women and millions of trade unionists would be at risk of Tory deregulation. 

One of the most important arguments in favour of staying in the EU is the protections that membership affords working people.

Whether it’s equal rights for part-time workers, the agency workers directive or limits on the length of the working week, we all owe the European Union and its Social Charter – campaigned for by a generation of trade unionists from across the continent – a great deal.

Outside of Europe British workers would find themselves worse off both in terms of their pay packets and the rights that they rely on. Add to that the reality that outside the EU risks being a place with lower public spending thanks to a troubled economy and rising privatisation of our public services, you can understand why the vast majority of British trade unions are recommending that their members vote to remain.

And for working women, the choice is starker still, because women have that much more to lose when rights and protections are stripped from the workplace.

Just think what EU law guarantees for all working people through the social charter, and how losing these rights (and putting the Brexit bunch in charge) would impact on things we’ve all come to rely on like maternity pay and guaranteed holiday pay.

Think about how much harder the struggle for equal pay will be if it’s not underpinned by EU law.

Think about how a Boris Johnson led Tory government – outside of Europe, on the fringes of global influence and under increasing pressure from UKIP to withdraw even further from the modern world – would attack your working conditions.

The Tory right – fresh from dragging our country out of Europe and away from regulations that help keep us safe at work aren’t going to stop there. Their next port of call will be other sources of what they deem “red tape” – like equal rights legislation that helps ensure women have all the same opportunities afforded to their male colleagues.

That’s something that matters to me as a trade unionist and as a woman.

It’s something that matters to me as Assistant General Secretary of a union with more than a million female members – UNISON, the biggest membership organisation for women in the country.

It matters to me as President of the TUC – when most trade unionists are women and when we have the first female TUC General Secretary in Frances O’Grady.

But most of all it matters to me because of the stories of all of the women I’ve met and am proud to represent who benefit every single day from Europe-wide protection of their rights.

What we face is the risk of losing those rights to a cynical and desperate campaign based around false promises and rhetoric from the Brexiteers. What we need in this campaign is some straightforward honesty. So here’s my position in a single sentence: Europe isn’t perfect, but without it millions of women and millions of trade unionists would be at risk.

I won’t stand for that. Neither should you. And neither should they either.

Liz Snape is Assistant General Secretary of UNISON and President of the TUC