Just been listening to a radio debate on the Referendum. One commentator remarked ‘how can Scotland be independent with a shared currency – Westminster would be controlling our currency – how is that Independent?’
Some times we ‘adults’ must not take things too literally. In a democracy the will of the majority must be respected, right. So here’s the thing. A couple have 3 kids. At 8pm they are told to go to bed. They get in a huddle, a count is taken and all 3 declare that they have decided to stay up and watch telly! Mum and dad have just been outvoted. In a very undemocratic manner 3 little bottoms get smacked and sent to bed. Point?
So back to the shared currency. First of all the base rate is controlled by the Bank of England – look up the name, this is the bank of the United Kingdom. Just as Scotland Yard doesn’t actually belong to Scotland – it’s just a name.
The base rate has been 0.5% now for years and will most likely remain so for some time to come. On the other hand, mortgages are around 4%? Now lets say you have a mortgage with RBS. If the Bank of England doubles the base rate, your mortgage does not go up to 8% it goes up to 4.5%. Now if the Bank of England do something really silly with the base rate, who comes off worst? England, because Scotland has a stronger economy! In this sense, we are all in it together.
Now if Scotland go ahead with Independence and run with the pound, at least for the time being, by the time the Bank of England consider raising the base rate, Scotland will have had time to review the work-ability of the pound – and who knows, they may decide to launch their own currency, the WEEBOBBY?
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