Alex Salmond addresses a Business for Scotland event earlier today in Aberdeen. Photograph: Getty Images.
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Salmond didn't even come close to rebutting Osborne's currency threat

The Scottish First Minister offered no persuasive argument for Scotland entering a currency union with the rest of the UK.

If Alex Salmond's speech today was intended to be a "deconstruction" of Westminster's warning (delivered by the triumvirate of George Osborne, Ed Balls and Danny Alexander) that the UK would not form a currency union with an independent Scotland, it didn't go to plan. His opening gambit was to suggest, as Nicola Sturgeon did last week, that Osborne and others are simply bluffing. After a vote in favour of independence, "enlightened self-interest" would lead the Treasury to agree to share the pound. But all of the public - and private - statements by the unionist side suggest that this is no bluff: they really are not prepared to risk the health of the UK economy by placing it in an unstable currency union with a country with a decidedly poor fiscal outlook and a banking sector 12 times its GDP. 

In a tacit admission of as much, Salmond went on to make two other main arguments against denying Scotland the pound. The first was that it would impose transaction costs of around £500m per year (dubbed "the George tax" by Salmond) on UK businesses: "I am publishing today an estimate of the transactions cost he would potentially impose on businesses in the rest of the UK. They run to many hundreds of millions of pounds. My submission is that this charge – let us call it the George tax – would be impossible to sell to English business."

The problem with this argument is that it simply isn't true. The figure of £500m (less than 0.0005 per cent of the UK's GDP) is too small for it to outweigh the negative costs of a currency union between England and Scotland. But in any case, as Alistair Darling noted after the speech, Salmond's championing of the pound merely reinforces the case for the status quo. He said: "Alex Salmond was arguing against about a problem of his own making - the problem of transaction costs for business due to changing currency. Avoiding extra costs to business and not placing jobs at risk are powerful reasons why we should vote to remain in the UK and keep the pound."

As a last resort, Salmond again brandished the threat to default on Scotland's share of the UK's national debt if the government vetoes a currency union. "If there is no legal basis for Scotland having a share of the public asset of the Bank of England then there is equally no legal basis for Scotland accepting a share of the public liability of the national debt," he claimed. But any default would, as he surely knows, would render Scotland an economic pariah, destroying its creditworthiness at a single stroke and preventing it from raising the funds it needs on the international money markets. 

With arguments as weak as these, Salmond was forced to fall back on essentially political points: Westminster is bullying Scotland and Labour is dancing to the Tories' tunes. "The sight of the Labour Shadow Chancellor reading from a script prepared by George Osborne" was, he declared, "too much to bear for many Labour supporters in Scotland". With no opinion polls published since Osborne delivered his threat, it is impossible to know whether he is right about the mood of this crucial swing group. But today, Panglossian as ever, he unambiguously failed on his own terms. 

George Eaton is political editor of the New Statesman.

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Building peace in a dangerous world needs resources, not just goodwill

Conflict resolution is only the first step.

Thursday 21 September is the UN-designated International Day of Peace. At noon on this day, which has been celebrated for the last 25 years, the UN general secretary will ring the Peace Bell on the UN headquarters in New York and people of good will around the world will take part in events to mark the occasion. At the same time, spending on every conceivable type of weaponry will continue at record levels.

The first couple of decades after the end of the Cold War saw a steady reduction in conflict, but lately that trend seems to have been reversed. There are currently around 40 active armed conflicts around the world with violence and suffering at record levels. According to the 2017 Global Peace Index worldwide military spending last year amounted to a staggering $1.7 trillion and a further trillion dollars worth of economic growth was lost as a result. This compares with around 10 billion dollars spent on long term peace building.

To mark World Peace Day, International Alert, a London-based non-government agency which specialises in peace building, is this week publishing Redressing the Balance, a report contrasting the trivial amounts spent on reconciliation and the avoidance of war with the enormous and ever growing global military expenditure.  Using data from the Institute for Economics and Peace, the report’s author, Phil Vernon, argues that money spent on avoiding and mitigating the consequences of conflict is not only morally right, but cost-effective – "every dollar invested in peace building reduces the cost of conflict".

According to Vernon, "the international community has a tendency to focus on peacemaking and peacekeeping at the expense of long term peace building."  There are currently 100,000 soldiers, police and other observers serving 16 UN operations on four continents. He says what’s needed instead of just peace keeping is a much greater sustained investment, involving individuals and agencies at all levels, to address the causes of violence and to give all parties a stake in the future. Above all, although funding and expertise can come from outside, constructing a durable peace will only work if there is local ownership of the process.

The picture is not wholly depressing. Even in the direst conflicts there are examples where the international community has help to fund and train local agencies with the result that local disputes can often be settled without escalating into full blown conflicts. In countries as diverse as East Timor, Sierra Leone, Rwanda and Nepal long term commitment by the international community working with local people has helped build durable institutions in the wake of vicious civil wars. Nearer to home, there has long been recognition that peace in Ireland can only be sustained by addressing long-standing grievances, building resilient institutions and ensuring that all communities have a stake in the outcome.

At a micro level, too, there is evidence that funding and training local agencies can contribute to longer term stability. In the eastern Congo, for example, various non-government organisations have worked with local leaders, men and women from different ethnic groups to settle disputes over land ownership which have helped fuel 40 years of mayhem. In the Central African Republic training and support to local Muslim and Christian leaders has helped reduce tensions. In north east Nigeria several agencies are helping to reintegrate the hundreds of traumatised girls and young women who have escaped the clutches of Boko Haram only to find themselves rejected by their communities.

Peace building, says Vernon, is the poor cousin of other approaches to conflict resolution. In future, he concludes, it must become a core component of future international interventions. "This means a major re-think by donor governments and multilateral organisations of how they measure success… with a greater focus placed on anticipation, prevention and the long term." Or, to quote the young Pakistani winner of the Nobel Peace Prize, Malala Yousufzai: "If you want to avoid war, then instead of sending guns, send books. Instead of tanks, send pens. Instead of soldiers, send teachers."

Redressing the Balance by Phil Vernon is published on September 21.   Chris Mullin is the chairman of International Alert.