Westminster appears set to attribute blame for sterling's crisis on Scotland
Scottish News: News in Scotland - Tuesday
Scottish independence: Westminster warns Scotland could endanger sterling
In another sign that Westminster is politically intervening in Scotland's referendum the treasury has issued a warning that an independent Scotland could endanger sterling. The development comes a week after another rating agency, Fitch, downgraded the UK economy and the incoming Bank of England Governor, Mark Carney, described Britain as a "crisis economy". In recent years the Scottish government has maintained a surplus while the rest of the UK has seen public debt more than double, heading for £1.5tn. Since the financial crisis began UK debt has climbed by circa £600bn which is equal to thirty times the Scottish parliament's annual budget. Last week a leading Scottish economist called on the Scottish government to reverse its sterling policy in light of the current dangers faced by the pound and avoid Scotland becoming exposed to the "high likelihood of a potentially catastrophic crisis in the not-too-distant future". Reports now indicate that the UK treasury are may soon state that they will not participate in a sterling zone with Scotland post-independence. Early last year Scottish Times urged the Scottish government to consider independent currency possibilities including the option of a parallel currency.
Danny Alexander challenged over Vitol donation
Speaking in advance of the publication by the Treasury of an anti-independence paper on currency policy, the SNP have challenged the Chief Secretary to the Treasury, Danny Alexander, over the £500,000 donation to the ‘no’ campaign by the president of Vitol, Ian Taylor. Last December, the Daily Telegraph newspaper reported that Vitol was “in talks” with HMRC “over a tax-avoidance bill”, “to settle a claim for millions of pounds in taxes its senior staff avoided through an offshore pay scheme”. The Telegraph reported that Vitol “is thought to have operated an ‘employee benefit trust’ (EBT) for more than a decade” - with Mr Taylor admitting to the Sunday Times that something would have to be paid. SNP Westminster leader Mr Angus Robertson MP said: “With the Treasury due to step into the independence debate once again, it is time for Mr Alexander to set out where he stands on Mr Taylor’s donation. If he supports it, he will effectively be condoning the very tax avoidance practices that he purports to condemn”.
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Scottish independence: Greens criticise ‘phoney war’ on currency
The Scottish Greens are accusing UK Chancellor George Osborne and SNP Finance Secretary John Swinney of waging a phoney war with their suggestions that a sterling zone is either impossible or inevitable. Scottish Greens have urged the Scottish government to keep an open mind about moving towards an independent currency. The Scottish government's currency paper, published today, endorses the idea of a sterling zone but agrees the need for flexibility should circumstances change. Patrick Harvie MSP, co-convener of the Scottish Greens, said: "Osborne's economic credibility is in tatters and now he's attempting to wage a phoney war by suggesting we're doomed unless we stick with the existing arrangements - arrangements which fail to reflect our needs and aspirations. If Scotland votes for full control of our own affairs it is reasonable to expect our economic priorities to diverge from the rest of the UK, so we would be wise to keep our currency options open".
Academics call on the Scottish government to increase tax for the rich
Leading academics have called for wealthy Scots living in large homes to pay more council tax, in an attempt to ease the impact of the 'bedroom tax' on thousands of vulnerable households. The group, which provides expertise in housing and social work, told the Scottish government that the system needs a shake-up to resolve inequalities. The academics claim the policy will have far-reaching financial and social consequences, saying it could leave 100,000 families in Scotland £40 to £80 worse off a month in benefits if they are deemed to have a spare bedroom in their council or housing association home. Their letter, published in today's Herald, states: "We suggest that this be paid for by a modest increase in the top rates of council tax, and that the Scottish Government work with local authorities to deliver this". Shelter Scotland director Graeme Brown said: "This response further illustrates the depth of anxiety felt across the housing sector about the drastic impact the bedroom tax is set to have on some of Scotland's most vulnerable people”.
UK crisis: government begins mass sell-off of citizen’s assets
Trade unions have vowed to try and block the looming privatisation of Royal Mail triggered by the government's plans to sell the state's £3bn stake in the uranium enrichment company Urenco. Ministers now see several assets ripe for multi billion pound sell offs as stock markets show pre-crash peaks, with certain investors ready to make commitments after increasing their wealth during the years of turmoil in the eurozone. The Student Loans Company is also going under the hammer, with a deal expected by next April. Other assets regarded as ready for privatisation include Companies House, the Land Registry, the Met Office and Ordnance Survey. With failing austerity and increasing UK debt, the government see selling off the country's assets as another way to try and reduce the skyrocketing UK deficit. "The British public are overwhelmingly against privatisation," Frances O'Grady told the annual conference of the Communication Workers Union. "our Royal Mail is not for sale."
German defence minister warns against UK exit from the EU
Britain's standing as a leading military power with the ability to influence events beyond its own borders will be jeopardised if the country leaves the EU, the German minister of defence has warned. Thomas de Maizière insisted the defence implications for Britain, Europe and Nato would be profound, saying this was an aspect of the argument David Cameron has not recognised. Under pressure from Eurosceptics in his own party, and with Ukip support growing, Cameron has promised an in-out referendum on membership of the EU if the Conservatives win the next election. Germany and France have said the UK cannot cherry pick its membership, and De Maizière has made it clear that Berlin needs strong UK support within the EU to counter French hopes of weakening Nato at the expense of Brussels.
Barroso's 'false debate' conundrum
The public will no longer accept more austerity warns José Manuel Barroso, the unelected president of the European commission in an echo of warnings by the IMF given to Britain last week. Mr Barroso argues that the merits of austerity versus more public spending was a false choice and that the true answer was to combine the two adding that public spending cuts alone would not provide the solution. However, Mr Barroso's view appears to be open to the charge of being a false choice too as all governments pursuing austerity such as the UK are also borrowing and printing money meaning there is stimulus in those economies at the same time as cuts. The combined approach appears to be failing whereas nations such as Iceland, where the public refused to take responsibility for the private debts incurred by banks now have a growing healthy economy.
North Korea demands recognition as a nuclear state
North Korea has demanded today that it be recognised as a nuclear weapons’ state, rejecting a US condition that it agree to give up its nuclear arms programme before talks can begin. After weeks of tension on the Korean peninsula, the North has begun dialogue in response to calls for talks from both the US and South Korea. However the North's Rodong Sinmun has stated that “if the DPRK sits at a table with the US, it has to be a dialogue between nuclear weapons states, not one side forcing the other to dismantle nuclear weapons," the newspaper said. North Korea has a record of using its self-declared nuclear strength in order to secure concessions from the US and South Korea – but both the US and the South have said in recent days that this cycle must cease.
Japan summons Chinese ambassador over territorial dispute
Japan has summoned the Chinese ambassador in protest after a flotilla of Chinese government ships entered territorial waters near a disputed island chain. The Chinese boats drove out 10 boats carrying about 80 Japanese activists from the nationalist Ganbare Nippon ("Stand Firm Japan") group, which sailed into waters around the islets early today (Tuesday). Japanese and Chinese patrol ships have been playing a cat-and-mouse game near the Japanese-controlled East China Sea islands, where China is seeking to assert its claim to sovereignty by sending ships into the disputed waters. The waters around the islets are rich fishing grounds with potentially huge oil and gas reserves. The territorial dispute has escalated in recent months to the point where China and Japan have scrambled fighter jets while patrol ships shadow each other, raising fears that an unintended collision could lead to a broader clash.
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