An independent Scotland and COVID19

[stockton]

You clearly don't understand how the City works, or macroeconomics.

You could, of course, be wrong.

[Charlottesquare]

I say the City creates wealth. You say it doesn't. That seems pretty incompatible to me.

OK. Take me for example. I pay tax from time to time.
What I could have done was put my investments in ISAs. That would have ensured that I would pay less tax and that a few people in the City would pay a little more tax for running those ISAs.
As far as I can see that tax from the City would have been extracted from my wealth.

If you run that argument all UK economic activity arises from the wealth of individuals which is nonsense; car makers do nothing, supermarkets, all business just pick your pocket if you run withyour argument.

All UK economic activity (ignoring external countries for ease) is mere flows of goods, services and labour with money going the other direction and profits added to costs re amounts that flow. To boil it to its simplest, I charge my labour to my employer at more than the sum of my costs (Housing/heat/clothes/food/travel etc) , he does likewise to his customers and so it flows round and round. The business running the ISA is no different from any other business charging a value added sum to its costs.

[stockton]

The business running the ISA is no different from any other business charging a value added sum to its costs.

Not at all. The business running the ISA is different in that it is essentially useless and only exists because of some rather peculiar official regulations which ensure that I cannot set up my own ISA unaided.
At the same time it ensures that the apparent source of tax is shifted from one part of the UK to another.

[Charlottesquare]

The business running the ISA is no different from any other business charging a value added sum to its costs.

Not at all. The business running the ISA is different in that it is essentially useless and only exists because of some rather peculiar official regulations which ensure that I cannot set up my own ISA unaided.
At the same time it ensures that the apparent source of tax is shifted from one part of the UK to another.

Auditors are accordingly useless because they too rely on official regulations (peculiar or other), your financial advisers, window cleaners, black cab taxi drivers, lawyers, people holding themselves out as doctors, all exist via legislation - so there is nothing intrinsic within the role of those providing ISA management services it is merely your particular distaste for the value they add.

[TahiPanasDua]

One result of the Covid pandemic is the realization that Scotland, Wales and Northern Ireland really are devolved nations.

There is an interesting article in the Scottish edition of The Times today. The following is a brief summary.

It refers to Boris being the prime minister of the UK but in practice during much of the current crisis he is only the prime minister of England. His decisions on the NHS, policing and leaving your home do not apply, for example, to Scotland.

Both Boris and Nicola Sturgeon have until now shown a united front but only where it suited both. Now that convergence has shattered and it is possible it may grow with implications for a future beyond the virus.

Arguably, the Welsh have shown the biggest push back. Apparently, day trippers from England have been warned that they face a criminal record if they cross the border. Also, at a Downing Street press briefing, a Welsh reporter pointed out to Dominic Raab that he was standing in front of the union flag issuing edicts that applied only to England.

Devolution has shown itself to be a fact not an abstract theory. This has come as a surprise even to many Scots.

The article says that lessons for the future include the need for Tory ministers to be clear on when they are acting for the UK and when they are acting for England. It also suggests they should drop the lazy and arrogant use of the word "national" which begs the question: " Which nation?"

Readers may be forgiven for thinking that I am a Scottish nationalist. I am not.

TP2.

[stockton]

The business running the ISA is different in that it is essentially useless and only exists because of some rather peculiar official regulations which ensure that I cannot set up my own ISA unaided.
At the same time it ensures that the apparent source of tax is shifted from one part of the UK to another.

Auditors are accordingly useless because they too rely on official regulations (peculiar or other), your financial advisers, window cleaners, black cab taxi drivers, lawyers, people holding themselves out as doctors, all exist via legislation - so there is nothing intrinsic within the role of those providing ISA management services it is merely your particular distaste for the value they add.

As far as I am aware the word "and" does not imply any particular relationship between the two elements at either side of the word; you appear to have invented a relationship that is not there.
The case of an ISA is useful reference precisely because it illustrates the way in which regulation distorts perceptions without having to enter into a discussion about whether a useful service is being provided.

[Charlottesquare]

The business running the ISA is different in that it is essentially useless and only exists because of some rather peculiar official regulations which ensure that I cannot set up my own ISA unaided.
At the same time it ensures that the apparent source of tax is shifted from one part of the UK to another.

Auditors are accordingly useless because they too rely on official regulations (peculiar or other), your financial advisers, window cleaners, black cab taxi drivers, lawyers, people holding themselves out as doctors, all exist via legislation - so there is nothing intrinsic within the role of those providing ISA management services it is merely your particular distaste for the value they add.

As far as I am aware the word "and" does not imply any particular relationship between the two elements at either side of the word; you appear to have invented a relationship that is not there.
The case of an ISA is useful reference precisely because it illustrates the way in which regulation distorts perceptions without having to enter into a discussion about whether a useful service is being provided.

I am now leaving you alone with your bee in your bonnet.

[stockton]

Deleted.

[Dod101]

Returning to the topic, it is all very well for the three (partially) devolved administrations to go their own way but they I am sure are getting much more out of Westminster than they are putting in, the furlough scheme being a case in point which, as far as I know is applied UK wide.

The fact is that Scotland would have been totally bombed out had it been independent. Furthermore, even if the government ministers in London are at times not very impressive, they are a lot better than the government ministers in Scotland who are mostly hopeless.

Dod

[dspp]

Returning to the topic, it is all very well for the three (partially) devolved administrations to go their own way but they I am sure are getting much more out of Westminster than they are putting in, the furlough scheme being a case in point which, as far as I know is applied UK wide.

The fact is that Scotland would have been totally bombed out had it been independent. Furthermore, even if the government ministers in London are at times not very impressive, they are a lot better than the government ministers in Scotland who are mostly hopeless.

Dod

Thank you for your opinion on this Dod re politicians. Some of us hold contrary opinions.

Regarding London-centric economic issues, one aspect that does not get much airtime is the way the FS sector massively distorts UK employment opportunities. The classic example is that a very large number of the STEM graduates enter the City. In the short term that may well increase UK GDP. In the longer term it skews away from (say) manufacturing. That in turn means that (say) well paid blue collar manufacturing jobs are thin on the ground (for the less able, or those who have had less opportunities), leaving the less able/opportune to either be unemployed in sink cities, or to become lower paid servant class in London. I find the relative trajectories of UK, France, Germany to be interesting in this respect, and I'm not sure there is an obvious 'best' way. But nevertheless it seems to me that City = good vs City = bad is a tad simplistic, and that in turn has implications for independence movements in Wales, NI, Scotland.

regards, dspp

[dealtn]

Auditors are accordingly useless because they too rely on official regulations (peculiar or other), your financial advisers, window cleaners, black cab taxi drivers, lawyers, people holding themselves out as doctors, all exist via legislation - so there is nothing intrinsic within the role of those providing ISA management services it is merely your particular distaste for the value they add.

As far as I am aware the word "and" does not imply any particular relationship between the two elements at either side of the word; you appear to have invented a relationship that is not there.
The case of an ISA is useful reference precisely because it illustrates the way in which regulation distorts perceptions without having to enter into a discussion about whether a useful service is being provided.

I am now leaving you alone with your bee in your bonnet.

Don't feed a troll!

[NeilW]

An eye watering (projected) Scottish deficit of 27% for 2020-21...that's some plan that's going to be needed

The plan should be for Scotland to run its own currency, float it against the GBP and ensure everybody who wants a job has one - paid at a fixed rate in that currency. While issuing volumetric tax bills against property in Scotland in that currency.

Then everybody has to get that currency - which they can only get from those who were previously unemployed or engaged in the Scottish public sector.

All you need then is an account for everybody and the ability to do matched exchange (possibly on a peer-to-peer basis) with other currencies. Then let the market sort it out by leveraging off that core.

What you don't do is introduce a new currency like Zimbabwe has - with pegs, central banks and other financial nonsense. That way you'll avoid the 700% inflation rates.

Ultimately money is the easiest thing to sort out once you realise a currency is a simple public monopoly and you only have to set one price (the price of an hour of unskilled labour) in that currency for it all to work itself out.

With that the Scottish government can utilise all the spare labour in Scotland - which is essentially the only resource any country has. Then it has to learn to cut its coat to that cloth.

If a new currency is too much for people to get their head around, then there is always the "Tax backed bond" trick which does essentially the same thing while staying on GBP http://www.levyinstitute.org/pubs/pn_12_04.pdf

[NeilW]

The business running the ISA is no different from any other business charging a value added sum to its costs.

In financial terms maybe. In use of physical resources less so.

It's always worth remembering the outcome of the Capital Debates in economics. There is no universal denomination unit of capital. A canning plant is a completely different type of capital to a financial institution.

Which means whether we want more canning and less financing is a political decision, not an economic one. As the last six months has demonstrated - with the country ticking over quite happily with very few of its labour resources fully engaged.

[Dod101]

I think we should vote for NeilW as the Scottish Chancellor should independence come about. IN fact why not for UK Chancellor in the meantime? That will get it sorted.

Dod

[dspp]

The business running the ISA is no different from any other business charging a value added sum to its costs.

In financial terms maybe. In use of physical resources less so.

It's always worth remembering the outcome of the Capital Debates in economics. There is no universal denomination unit of capital. A canning plant is a completely different type of capital to a financial institution.

Which means whether we want more canning and less financing is a political decision, not an economic one. As the last six months has demonstrated - with the country ticking over quite happily with very few of its labour resources fully engaged.

ticking over quite happily = running up enormous debts

regards, dspp

[dealtn]

ticking over quite happily = running up enormous debts

regards, dspp

Not sure Scotland runs up any debts

[Dod101]

ticking over quite happily = running up enormous debts

regards, dspp

Not sure Scotland runs up any debts

Scotland is allowed only modest independent borrowing and part of the reason is surely that it gets enough money anyway, from the Barnett formula and through furlough and probably other benefits from Westminster. I would not trust the Scottish lot with anything if I could help it. They cannot even build two ferries for CalMac without going miles over budget with the ferries themselves and for good measure nationalising one of our few remaining shipyards which is of course loss making.

Nicola has got good presentation and realised long ago that all she had to do was let Westminster come up with a few initiatives, wait for the inevitable flaws and then modify what was proposed and look clever.

Dod

[scrumpyjack]

ticking over quite happily = running up enormous debts

regards, dspp

Not sure Scotland runs up any debts

It depends what share of the UK national debt is allocated to Scotland if we divorce. If it were calculated based on their share of previous state spending etc, it would be vast and a lot more than the 8% or so based on population.

Purely on economic terms, I suspect RUK would soon be much better off without Scotland even if RUK took on all existing National Debt, and that independent Scotland would soon be in dire straits even if starting with no national debt. That would be very sad. I suspect it is lucky for the Union that England does not have a vote on Scottish independence.

[Nimrod103]

I think we should vote for NeilW as the Scottish Chancellor should independence come about. IN fact why not for UK Chancellor in the meantime? That will get it sorted.

Dod

Neil was my selection for Chancellor in my 'Motley Fool Government for the people' back in......well, a long time ago. Certainly 2, maybe 3 crappy Chancellors back.

He has a way of looking at money that makes you realise how contrived the whole thing is.

But, but, Scotland's debts, private and national (as their share of the UK debt) are denominated in British Pounds. Why would creditors accept Scottish Pounds at parity?

[Nimrod103]

But ..but the SNP said in 2014 (paraphrasing) ' No currency union, no share of UK debts'.

Sounds a great idea. rUK can adopt the EngWalPound, leaving Scotland with the Old Pound, and with all the UK debt.
Put like that, the SNP position is an absurdity. Scotland has to accept its share of the debt, the fair basis of which is the Barnett Formula.

It is an interesting fact that none, or very few, of the Scottish leaders espousing independence have children. They are all working to get their names in the history books as Scottish nationalists who broke the UK, and then retired on good state sector pensions, with no need to provide the next generation with jobs or money.