Thursday, 11 September 2014

I largely agree with Nigel Farage on the Scottish Referendum

It is a matter of sadness for me that Farage arranged for me and others to be banned from UKIP by the cabal for reasons of personal spite. I have never had any policy differences with Nigel Farage and agree with much of his piece in today's DT.

His main point that leading Scotland out of the UK only to join the EU is illogical. I agree as I know does Del Young who has put this point to me many times.

Farage's understanding of the role of a central bank is a somewhat naive commonly held view. In the last banking crisis it was the UK government that had to guarantee UK bank deposits not the BoE. The BoE is in fact a very small bank compared with commercial banks. Its power lies in its ability to supply liquidity at the short end of the market, less than 14 days and hence help banks balance their books on the central banks balance sheet. Unlike other central banks eg the Bundesbank it does not hold the countries reserves on its balance sheet. It manages them but ownership is vested in HMT hence the lender of last resort goes to HMG.

It is also not as 'independent' as the Bundesbank or the Fed. The BoE has a very political appointee, Carney as governor who seems very much under the thumb of HMT.

Alex Salmond is quite right to assert Scotland owns part of the BoE balance sheet so there is no problem there. The size of the Scottish banking sector vis a vis the Scottish economy was only a problem because Jonah Brown waived the competetion  rules for political reasons to let Lloyds take over HBOS anddiscouraged scrutiny of RBS. If banking rules are properly applied there will be no problem.

As AS pointed out Lloyds is already registered in London. If the rUK did not ensure tax from both banks was paid fairly in Scotland as well as England then the EU would have carte blanche to takeover the City and Amazon and the like would have a field day.

As for BP what happens in Scotland will be small potatoes to what is currrently happening to them in US courts. The reason is the same, failure to apply correct safety rules.

In the UK rules have been too easily bent and waived. It has led many of our problems in recent years. Alex Salmond will clean that up in Scotland if he is given the chance.


mike bridgeman said...

I read that article and I agree with you.
I hope he gets a better ride and a few listen to him this time on his visit.

Eric Edmond said...

He should keep out of Scotland. His man Coburn, Scottish UKI MEP made a complete idiot of himself on TV on referendum night. He is I am afraid all to typical of the lessr intellects Farage likes to surround himself with a bit like pretty girls like to have plain friends.