ARE we talking about the wrong thing when we are discussing the currency in a future independent Scotland?
In 1971, the country changed over to the decimal system for our currency and I doubt if anyone today in Scotland would consider using any other system. In that respect we will with 99.99% accuracy be using the decimal system, we also don’t need to call it anything different to what it’s called today.
Forty-eight years after decimalisation people in this country still refer to the shilling or the old penny as if they were still in circulation. So effectively we will have 100 pence to the pound, which is the end of that part of the debate. What the units and sub units are eventually called can be open for debate but do we need to go further?
The real question should be about what we link our currency to. For argument’s sake, I will refer to it as the Scottish pound, as that is which we all know and most likely it will be called. Obviously, on day one it will be linked directly to the value of the UK’s pound. That will be the only source to compare it with at the time, and as the market determines the value of any currency, and as no country has the Scottish pound, then it should be in some demand. More so as we have a strong economy, we export £4.7 billion of whisky alone not to mention over £32.4bn total exports in 2017, and another £48.9bn of exports to the rest of the UK. That’s £86bn in anyone’s language.
In that respect I would assume that all the leading markets (including England) will want to get hold of the Scottish pound.
As the Scottish economy is by all intents and purposes strong and vibrant.
Presently there are only a few currencies worldwide worth considering, and even less ways you can link your currency. The most obvious being the gold standard. The two most stable currencies are the American dollar and the euro and we most likely will link to one of those two. If, as expected, the rest of the UK faces financial problems with Brexit and Scottish independence, then it’s in our best interests not to link it to the UK pound and link directly to either the dollar or the euro.
Certainly within a short time the Scottish pound will find its own level no matter what it’s called, or what currency it’s linked to. The main influence for a stable Scottish pound will be how the people of Scotland react to it and if they believe that it is strong and stable, otherwise you can have rampant inflation. As the people of Scotland are pushing for indyref2, I don’t see any why the Scottish pound should suffer on independence, it’s more likely to get stronger.
Those of us old enough to remember the change over to the decimal system will remember that it went very smoothly and without any problems, the same when most of Europe changed over to the euro, and other countries have changed their currency, notably most of the old Empire/Commonwealth who used the pre-decimal currencies system.
In each case, the people were informed of the date of the change and on that day everything changed, you just bought whatever you needed as usual paid in the old currency and received the new currency in exchange or went directly to the bank and handed over your old money and got the new. As for people living near international borders, they tend to accept money in two currencies and I’ve seen shops in tourist areas accepting several different currencies.
In that respect I would just call our currency the Scottish pound and have done with it, then get on with setting up a national bank which can assist in deciding which currency is best to link it to.
Alexander Potts
Kilmarnock
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