With the referendum so close, this week on the Kiran Trivedi blog, I ask what’ll happen to your money if Scotland goes independent and you live in Scotland.
Money is a Major Consideration for Scottish Independence
Although people don’t often tend to think about it a lot, when you’re looking to protect your personal finances, the currency your money is actually paid to you in is vital. That is because certain currencies have different values in comparison to each other, thus those whose wages are paid in pound sterling, for example, pay more for their everyday items, than those paid in the Euro. Because the pound has a higher value.
This is why I’ve no doubt, Kiran Trivedi readers, that you’ve heard so many arguments about currency in the recent debates over Scottish independence. Independence won’t affect the pound too much. It may suffer slightly on the world stage, due to fears over the UK’s economic strength, but it’s always been a strong currency. The real question would be whether Scotland would be allowed to keep it.
Would Scotland Be Allowed to Keep the Pound?
One of the real issues raised in debate is whether Scotland would be allowed to keep the pound. Whist Alex Salmond – leader of the yes campaign, has said that they will, Alistair Darling, leader of the opposing Better Together campaign, has said that they won’t.
Losing the pound would be disastrous, as not only is it a desirable currency, but it would cost the collective taxpayer north of the border millions to convert to a B currency. A B currency would not only be worth less than the pound, but has been shown to be incompatible with the EU lately anyway, thus less desirable for the people of Scotland.
Could Scotland Keep The Pound Even Without Permission?
From here, we’re lead to ask, Kiran Trivedi readers, whether Scotland could just defy the British and keep the pound anyway, without permission. There is precedence for this. Countries including El Salvador, Panama and Ecuador use the US dollar without permission.
But look at their quality of life – hardly desirable for the people of Scotland, which as a member state of the UK is part of a first world country. The problem with keeping a currency without permission, is that you have no control over that currency. That means that If England needs to raise its benchmark interest rate, for example, they would, and taxpayers north of the border would have to like it or lump it.
Scottish Independence Could Effect Personal Finances North of the Border
That’s not to say I’m against Scottish independence, Kiran Trivedi readers. I actually think there are some quite effective arguments in favour i.e. moving capital away from London, but currency is definitely an issue to contend with. If Scotland does go independent, it really could affect your personal finances if you live north of the border.
Kiran Trivedi 