https://sil2.e-infinitum.com/ en https://sil2.e-infinitum.com/what-financial-impact-scotland-independence <span class="field field--name-title field--type-string field--label-hidden">What is the financial impact on Scotland of independence?</span> <div class="field field--name-field-related-questions field--type-entity-reference field--label-above"> <div class="field__label">Question Answered</div> <div class='field__items'> <div class="field__item"><a href="/taxonomy/term/18" hreflang="en">Who will pay for Scottish independence?</a></div> </div> </div> <span class="field field--name-uid field--type-entity-reference field--label-hidden"><span lang="" about="/user/18" typeof="schema:Person" property="schema:name" datatype="">Stephen Richard</span></span> <span class="field field--name-created field--type-created field--label-hidden">Thu, 10/28/2021 - 12:14</span> <div class="field field--name-field-author-or-creator field--type-string field--label-above"> <div class="field__label">Author or Creator</div> <div class="field__item">Common Weal</div> </div> <div class="clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item"><p><span><span>W</span></span><span><span><em>hat is the financial impact on Scotland of independence?</em></span></span></p> <p><span><span>There are three aspects to this – the initial debts inherited, the cost of the work to become independent and the ongoing financial position of Scotland after independence. The last of these is not part of the process of establishing a new country and so has not been considered here.</span></span></p> <p><span><span><em>So what is the debt aspect of this?</em></span></span></p> <p><span><span>As was discussed under negotiations above, that is not something we can know until negotiations are complete, but there isn't really a scenario where Scotland's debt liability is any higher than it already is inside the UK and there are a number of scenarios where it could be less – and even significantly less. As we have seen through two periods of very large scale 'quantitative easing' right across Europe and indeed the wider world, debt size in comparison to the size of the economy when you are in charge of your own currency is not a major concern. The issue is the cost of servicing it which will not be higher than it currently is for Scotland.</span></span></p> <p><span><span><em>But these questions reveal a lot of set-up costs do they not?</em></span></span></p> <p><span><span>Yes, but this should be put into perspective. If you add up all of the above costs then the total comes to about £25 billion and this is not particularly large when we think about the bank bailout or the emergency Covid measures. And it is dominated by two major costs – the cost of setting up a Foreign Currency Reserve and cost of setting up a Scottish Defence Force. The first of these is a cost but it is also an asset (this is real money you can spend and invest) and the second would be spent over a decade and much of it would come from annual spending on defence which would actually be less than what we are spending at the moment as part of the UK. These are all one-off costs and in the end are no more than a small proportion of how much Scotland's share of the bank bailout cost.</span></span></p> <p><span><span><em>So that is how much the national debt would rise by to become independent?</em></span></span></p> <p><span><span>No, that is the total cost of the set-up and doesn't include Scotland's likely share of the UK's assets. About £15 billion of the £25 billion total would come to Scotland as a share of assets (or would be subtracted from debt). The additional cost to Scotland which would be borrowed is only £10 billion which, as a one-off, really isn't that substantial.</span></span></p> <p><span><span><em>How would we pay for it?</em></span></span></p> <p><span><span>To go back to the beginning, the National Commission would be given bond-issuing powers so would use this to borrow the money as it does its work. At the end this would be consolidated and added to the national debt.</span></span></p> <p><span><span><em>What do we get for our money?</em></span></span></p> <p><span><span>Well, our own country – and a giant economic stimulus. An awful lot of the money it would cost to set Scotland up as an independent country would be spent on goods, services and wages inside Scotland would would help to boost Scotland's economy.</span></span></p></div> <div class="field field--name-field-keywords field--type-entity-reference field--label-above"> <div class="field__label">Keywords</div> <div class='field__items'> <div class="field__item"><a href="/taxonomy/term/269" hreflang="en">Cost of independence</a></div> <div class="field__item"><a href="/taxonomy/term/430" hreflang="en">Public Debt</a></div> <div class="field__item"><a href="/taxonomy/term/427" hreflang="en">Government bonds</a></div> </div> </div> Thu, 28 Oct 2021 11:14:09 +0000 Stephen Richard 43 at https://sil2.e-infinitum.com https://sil2.e-infinitum.com/claiming-scotlands-assets-discussion-paper-division-assets-and-debts-independent-scotland <span class="field field--name-title field--type-string field--label-hidden">Claiming Scotland’s Assets: A discussion paper on the division of assets and debts to an independent Scotland</span> <div class="field field--name-field-author-or-creator field--type-string field--label-above"> <div class="field__label">Primary Author or Creator</div> <div class="field__item">Craig Dalzell</div> </div> <span class="field field--name-uid field--type-entity-reference field--label-hidden"><span lang="" about="/user/18" typeof="schema:Person" property="schema:name" datatype="">Stephen Richard</span></span> <span class="field field--name-created field--type-created field--label-hidden">Sun, 09/12/2021 - 20:49</span> <div class="field field--name-field-additional-author-s-creato field--type-string field--label-above"> <div class="field__label">Additional Author(s) / Creators</div> <div class="field__item">Common Weal</div> </div> <div class="field field--name-field-alternative-published-date field--type-string field--label-above"> <div class="field__label">Alternative Published Date</div> <div class="field__item">September 2016</div> </div> <div class="field field--name-field-category field--type-entity-reference field--label-above"> <div class="field__label">Category</div> <div class='field__items'> <div class="field__item"><a href="/taxonomy/term/143" hreflang="en">Independence</a></div> </div> </div> <div class="field field--name-field-type field--type-string field--label-above"> <div class="field__label">Type of Resource</div> <div class="field__item">Policy Paper</div> </div> <div class="clearfix text-formatted field field--name-body field--type-text-with-summary field--label-above"> <div class="field__label">Fast Facts</div> <div class="field__item"><p>This paper explores the historical precedents covering how debts and assets are split when states dissolve or become independent and applies those models to the case of Scottish independence.</p> <p>In particular, the paper rejects the 2014 independence campaign’s “subtractive” approach whereby Scotland adopts a “share” of the UK’s liabilities less the value of an assets withheld by the remaining UK in favour of a “zero option” approach whereby the rUK is allowed to maintain its claim as the continuing state to the former UK and to adopt all mobile assets and liabilities. In such a case, Scotland may choose to “mortgage” the value of a proportion of UK debt against any mobile assets it successfully negotiates from the UK.</p></div> </div> <div class="clearfix text-formatted field field--name-field-precis field--type-text-long field--label-above"> <div class="field__label">More details</div> <div class="field__item"><p>―  This paper seeks to re-open this discussion, taking as its starting point the historical precedents, as they shall show that not only is this simple model one which has rarely been used in practice, it is not necessarily one which would work to Scotland’s benefit.</p> <p>―  The manner in which states separate is crucial for determining asset division. In particular, the rUK’s likely desire to maintain “successor” or “continuing” status to the former UK will likely be largely determined by its willingness to guarantee the debts of the former state.</p> <p>―  The assumption that the baseline for division should be on population can and should be challenged. Many state separations have negotiated settlements which place weight on territoriality as well as the historical contributions and beneficiaries of the former unions.</p> <p>―  It may be that Scotland has been a historical net contributor to the UK thus may have already more than paid its “share” of the national debt.</p> <p>―  The previous independence campaign discussed the possibility of a subtractive model of asset separation whereby the value of any assets withheld from Scotland by rUK (for example, currency and foreign reserves) would be subtracted from debt liabilities accepted. This report recommends instead an additive model whereby Scotland begins with the assumption of accepting no debt but will accept debt up to the value of assets transferred. It may be that Scotland actually requires less from this transfer than the subtractive model would suggest.</p> <p>―  For the additive model to be actionable, an up-to-date register of assets will be essential. With the last UK Government register of assets in 2007, the Scottish Government must press the UK Government to commission a new register or conduct a Scottish audit in the near future.</p> <p>―  Additionally, the prospect of Scotland issuing its own bonds and buying what is required is explored (‘the zero option’). This model may have significant advantages with regard to being able to denote the debt in Scotland’s own independent currency thus maintaining full control over debt management and significantly reducing the chances of a default.</p> <p>―  The precedents and models outlined would likely all accrue varying levels of financial benefit to Scotland if utilised properly. A lack of up to date data makes precise figures impossible, but a conservative illustration of each model in the Scottish context would suggest a £800m per year financial gain from the subtractive model with refinancing; a £1.7 billion reduction in debt interest payments from the additive model without refinancing; a saving of over £2 billion per year from the zero option; and, in the case of historical net contribution, a possible financial contribution from rUK to Scotland.</p></div> </div> <div class="field field--name-field-resource-url field--type-link field--label-above"> <div class="field__label">Resource Address (URL)</div> <div class='field__items'> <div class="field__item"><a href="https://commonweal.scot/wp-content/uploads/2016/09/Claiming-Scotlands-Assets.pdf">https://commonweal.scot/wp-content/uploads/2016/09/Claiming-Scotlands-Assets.pdf</a></div> </div> </div> <div class="field field--name-field-keywords field--type-entity-reference field--label-above"> <div class="field__label">Keywords</div> <div class='field__items'> <div class="field__item"><a href="/taxonomy/term/405" hreflang="en">Independence negotiation</a></div> <div class="field__item"><a href="/taxonomy/term/490" hreflang="en">UK debts</a></div> <div class="field__item"><a href="/taxonomy/term/184" hreflang="en">UK assets</a></div> <div class="field__item"><a href="/taxonomy/term/427" hreflang="en">Government bonds</a></div> <div class="field__item"><a href="/taxonomy/term/158" hreflang="en">Currency</a></div> </div> </div> <div class="field field--name-field-related-questions field--type-entity-reference field--label-above"> <div class="field__label">Related Questions</div> <div class='field__items'> <div class="field__item"><a href="/taxonomy/term/63" hreflang="en">Can Scotland survive independence?</a></div> <div class="field__item"><a href="/taxonomy/term/1" hreflang="en">Does England subsidise Scotland?</a></div> <div class="field__item"><a href="/taxonomy/term/11" hreflang="en">Does Scotland have a deficit?</a></div> </div> </div> <div id="field-language-display"> <fieldset class="js-form-item js-form-type-item form-type-item js-form-item- form-item- form-group"> <label>Language</label> English </fieldset> </div> Sun, 12 Sep 2021 19:49:42 +0000 Stephen Richard 367 at https://sil2.e-infinitum.com