More from Leah.

Dear Editor,

Let me explain to David Smith why Scotland must leave the UK to have a chance at a thriving economy. As long as we remain, we’re captive to the Bank of England and UK economic policy that has landed us in this hole. We can’t set our own economic policy, interest rates, control our resources, nor keep all the tax generated in Scotland which currently goes to London.  

So yes, David, we need our own currency and central bank just like any other normal grown-up country. A government that issues its own currency from its central bank and only borrows in that currency can never go broke, nor can it be held hostage to the money markets. If the money markets attack a Scottish pound, the government can repurchase its debt through the quantitative easing process to reduce pressure on the exchange rate. It can also set its own interest rate to stimulate the economy and control its tax system. 

If we stay in the UK, none of that will be possible. The Bank of England would control interest rates and the money supply. Scotland would have to borrow in a foreign currency – sterling – and would have no ability to generate funds to make payments. It would be no more than an English region.  

An independent Scotland will have ample foreign reserves. People will trade sterling for the Scottish currency because the government will require tax to be paid in that currency. To pay the tax, individuals and businesses will need Scottish pounds. The transfer from sterling into Scottish pounds will instantly create billions in foreign reserves, enabling Scotland to be a strong and stable independent state. 

It’s not that hard, David. 

Leah Gunn Barrett 

AND

Ian Murray pretends that Labour will act differently from the Tories once in government, and magically solve the UK’s economic woes. But reversing the carnage will take more than Rachel Reeves meeting with mortgage brokers to hear how people are suffering under the Bank of England’s high interest rates.^[1] 

The trouble is that she and Starmer are committed to the Bank’s devastating interest rate hikes (that aren’t working), Tory austerity and the war on public sector workers. As a former Bank of England junior staffer, Reeves recently said we must respect economic institutions, not criticise them for screwing people and plunging the economy into recession. 

Labour pretends there is no money to invest in health, education or clean water, to name just a few of the essentials people need. And Wes Streeting is warning that Labour won’t make promises it can’t keep, so it can’t make the investments needed to improve people’s lives.^[2]

Then what is Labour for? Why does it seek power if it can’t improve peoples’ lives? In 1942 John Maynard Keynes said that ‘anything we can actually do, we can afford.’^[3] The post-war Attlee Labour government followed Keynes’ advice, pushing through massive public sector investments in health, education, transport, housing and energy that resulted in full employment, good wages, vastly improved public services, no inflation and rising GDP while enabling the UK to pay off its international debts. The Nordic nations took note, copied the Keynesian model and kept it, which explains their current social stability and economic prosperity.

The UK is failing. At best, Labour will manage the decline. This begs the question – why does Scotland remain anchored to an anachronism? 

---

^[1] https://www.mortgagesolutions.co.uk/news/2023/07/10/labour-party-to-host-emergency-mortgage-summit-with-brokers-‒-report/

^[2] https://www.theguardian.com/politics/2023/jul/09/labour-promises-tory-mismanagement-public-finances#:~:text=Labour%20won%27t%20make%20promises%20it%20can%27t%20keep,-Wes%20Streeting&text=Friday%20in%20my%20constituency,the%20state%20of%20our%20country.

^[3] https://jwmason.org/slackwire/keynes-quote-of-day-2/

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