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Showing posts with label Fiscal Commission. Show all posts
Showing posts with label Fiscal Commission. Show all posts

Sunday, 16 March 2014

A Marr interview with Alex Salmond, marred by simplistic questions – and a gaffe …

Marr, after trying to damn the YES campaign with faint praise on the polls, jumps in with the simplistic Better Together yah-boo mantra - Plan B!

He gets it partially right with "they're so hostile to Scottish independence that it's not bluff and bluster - they just determined to spike your guns" It may well be bluff and bluster (if it's not it's profound economic stupidity, allied to a craven fear of UKIP and their own badly-riven party and doubtful LibDem allies) but it most certainly is driven by hostility to independence and a desire to spike guns. He also observes that  there isn't good will on both sides. Again, Marr is half right - there is goodwill, albeit sorely tested on the Scottish Government side and a total absence of it on the UK side.

Marr's next point is that because "no one can say what's going to happen after a YES vote - if that's what happens - and therefore,  Scots are going to be left in the situation where they don't know what currency they will be using afterwards. Do you think it's sensible to have a Plan B ..." etc. He asks what's wrong with having a pound Scots or - and this is the mandatory Better Together sneer - "a groat, or whatever it would be called?"

Marr ignores completely the answer he got on his first outing with 'Plan B', and dutifully plays the BT broken record soundbyte. He gets a weary but patient repetition of the FM's first answer on the range of viable currency options, and a reiteration that 'Plan A' - a currency union - is in the best interests of both parties. The FM also reprises the requirement of the Edinburgh Agreement for politicians on both sides to act in the best interests of Scotland and rUK after the referendum.

It all falls on deaf - or uncomprehending - ears. "So why not a Scottish currency?" Any interviewer with any claims to professionalism would have had the Fiscal Commission report in front of him, or at least a key summary - but not Marr. Why bother when you can ignore detailed answers and repeat simplistic questions?

Marr conjures up Barroso. He claims that Barroso was "absolutely adamant in private and in the studio that it would not happen." In fact  Barroso said no such thing, since he is unable to speak for all the countries of the EU, and indeed he has been challenged by other heavyweight EU figures on what he did say. He then makes the extraordinary statement that Barroso "has no particular dog in this fight." No 'dog' except the Catalonian people's burning desire for a referendum on their independence.

The FM is too polite - or circumspect - to invoke Catalonia, but he does detail the reality of Barroso's current status and what his ambitions viv-a-vis NATO might be.

Marr then astonishingly offers his own opinion on Scotland's EU membership. "I think it will be quite hard to get back in, I have to say - but let's move on ..."

Let's not, Andrew- you don't get away with that so easily ...

FM: "This is what the Andrew Marr analysis says, as opposed to ... “

Marr: "Having talked to Mr. Barosso of the European Commission ...

FM: "As opposed, Andrew, to the weight of evidence that's been presented to the Scottish Parliament and its committees at the present moment. Is that the individual expression - or the BBC ‘s”

Marr blusters frantically, aware that he's in deep merde. "I've got no views on this, nor has the BBC.."

I'll leave the immigration bit - Marr was similarly simplistic on this topic.

A sad, sad performance from a once incisive political editor - in days gone bye. Long gone bye ...

Monday, 17 February 2014

The eminent group of advisers who opted for the pound sterling in a currency union with rUK after a YES vote

Fiscal Commission Working Group
(Membership drawn from the First Minister’s Council of Economic Advisers.

Crawford Beveridge CBE (Chair)

– a technology industry veteran with more than 35 years of experience.

Worked as an Executive at Sun Microsystems for over 15 years.  

1991: He left Sun Microsystems to become Chief Executive of Scottish Enterprise. He returned to Sun Microsystems in April 2000 as Executive Vice President of People and Places and Chief Human Resources Officer. He is -

Non-Executive Chairman of the Board of Autodesk,

Chairman of Scottish Equity Partners Ltd

Non-exec board  member of eSilicon and Iomart Group PLC.

Awarded a C.B.E. in the New Years Honours list in 1995.

Professor Andrew Hughes Hallett

Professor of Economics at University of St Andrews.

Professor of Economics and Public Policy at George Mason University in the US

Visiting Professor at Harvard University

Professor Hughes Hallett specialises in international economic policy and has acted as a consultant to the
World Bank, the IMF, the Federal Reserve Board, the UN, the OECD, the European Commission and central banks around the world.

Professor Sir James Mirrlees

Professor Emeritus at Cambridge University and
distinguished professor-at-large at the Chinese University of Hong Kong.

In 1996 Sir James was awarded the Nobel Prize for his work on economic models and equations about situations where information is asymmetrical or incomplete. In 2010, he led the Mirrlees Review of taxation which examined the principles and characteristics of good tax system for open developed economies in the 21st century.

Professor Frances Ruane

Director of Ireland's Economic and Social Research Institute and Honorary Professor of Economics at Trinity College, Dublin. She has published widely in the area of international economics and industrial development.

Professor Joseph Stiglitz

Professor of Economics at Columbia University.

Won the Nobel Prize in Economics in 2001 and was a member of the US Council of Economic Advisers (CEA) from 1993-95, serving as CEA Chair from 1995-97.

Chief Economist and Senior Vice-President of the World Bank from 1997-2000.

In 2009, appointed by the President of the UN General Assembly as Chair of the Commission of Experts on Reform of the International Financial and Monetary System.

EXTRACT from REPORT AND CONCLUSIONS – (all highlighting, italicisation, colour and typographical emphasis is mine,and was not present in the original report format)

Monetary Policy

3.25  The choice of currency is a key determinant of the overall macroeconomic framework.

3.26  Analysis shows that it would be in Scotland’s interests to retain Sterling immediately post-independence. It is also the case that, post independence, this would benefit the rest of the UK given the scale of integrated markets, including in areas such as financial services.

3.27  Scotland’s economy is strong enough and sufficiently aligned with the rest of the UK that a separate currency would not be necessary. Retaining a common currency would promote the single market and help facilitate trade and investment to and from the rest of the UK and elsewhere.

3.28  There would be a number of ways to implement monetary policy within a formal monetary union, including options around the institutional arrangements for central banking.

3.29  The preferred model would be for Scotland to enter a formal monetary union with the rest of the UK with the Bank of England (the Bank) operating as central bank for the common monetary area (the ‘Sterling Zone’).

3.30  Ownership and governance of the Bank could be undertaken on an agreed shared basis, reflecting Scotland’s current implicit and historical share of the existing Bank’s assets as a UK institution.

This arrangement would be subject to negotiation with the UK Government. However a practical arrangement with shareholder rights allocated on a per capita or GDP
weighted basis would seem appropriate.

3.31  Monetary policy would be set in the Sterling Zone according to economic conditions in both Scotland and the UK –in the same way as is currently the case.

3.32  The Bank would remain operationally independent to set monetary policy.

3.33  This would involve little change in the day-to-day operations of the Bank or in its discharge of monetary policy. The common payments and settlements system would continue, as would the efficient use of inter-bank money markets as the principal means of providing liquidity. The Bank’s balance sheet could remain unified, albeit indemnified by two fiscal authorities.

3.34  As part of this arrangement, the framework proposes that the Scottish Government should seek input into the appointment process to key positions within the Bank (for example the Monetary Policy Committee (MPC) and Financial Policy Committee (FPC)) and an input into its remit and objectives. A representative from the Scottish Treasury could also attend MPC meetings in a capacity similar to the existing HM Treasury representative (i.e. in a nonvoting capacity and to ensure that monetary policymakers were fully informed of developments in Scottish Government economic and fiscal policy).

3.35  Related to this, and as an explicit shareholder of the Bank, the Scottish Government and Scottish Parliament should seek a role in providing oversight of the Bank and its activities.

3.36  This would create an appropriate system of accountability and representation for both governments.

3.37  Matters of collective decision making on governance and accountability could be addressed within an overarching agreement on the functioning of the Sterling Zone.

A shared institutional arrangement, such as a ‘Macroeconomic Governance Committee’, could be established to oversee matters which require coordinated input and/or agreement from the respective governments.

This practical arrangement could cover not just monetary policy, but also issues of shared interest in fiscal sustainability and financial stability. Such an arrangement would also provide a forum for knowledge transfer and the sharing of key information

Thursday, 10 October 2013

Civilised debate in politics – something Scottish Labour is a stranger to …

John Swinney’s letter to the Herald

4th October 2013

Independent Scotland could make early investment into an oil fund
Friday 4 October 2013

I NOTE with interest your article about the Fiscal Commission Working Group's paper on the options for establishing a stabilisation fund and a savings fund in an independent Scotland ("Swinney backs call for oil fund", The Herald, October 3).

The advice on the establishment of a stabilisation fund puts to rest any fears around oil price fluctuations impacting on future Scottish budgets.

There is an unanswerable case for using a proportion of Scotland's oil wealth to establish a long-term savings fund. As the working group has highlighted, of the world's top 20 oil producers only the UK and Iraq do not operate some form of recognised sovereign wealth fund. With more than half the wholesale value of North Sea oil and gas still to be extracted, there is an overwhelming case for the government of an independent Scotland to establish a long-term savings fund.

A key question which the Fiscal Commission's report addresses is the point at which Scotland could start to make investments into a savings fund. It has been widely assumed that Scotland would have to run an absolute fiscal surplus before investing in a savings fund, and this has been reflected in the Scottish Government's early thinking on the subject. However, the commission is clear that there is a compelling case for starting to make early investments into an oil fund whilst in deficit so long as it is manageable and debt is on a downward path.

As with most advanced economies, Scotland is running a fiscal deficit, albeit a smaller deficit than the UK as a whole. However, Scotland's fiscal position is likely to strengthen as the economy recovers. Based on the model outlined by the working group, Scotland could consider investing modest sums into a long-term savings fund without an offsetting change to public spending or taxation potentially as early as 2017-18.

In the long run, the economic levers available under independence will enable us to grow the economy more quickly, boost tax revenues and ensure that, in time, a greater proportion of Scotland's oil and gas wealth is invested for the future.

John Swinney,

Finance Secretary,

Scottish Parliament, Holyrood, Edinburgh.