Scotland is currently going through growing pains once again in its history, this time to establish independence although interestingly Alex Salmond (First Minister of Scotland) wants out of the UK and for Scotland to govern itself as it pleases.  However, he is happy for Threadneedle Street to govern its money. Strange? I thought so.

Will the Scots bring back coins like the merk, groat or bawbee? Stirling University Professor of Economics, David Bell wrote in the Scotsman on Friday that it makes sense for Scotland to keep  the pound. He stated that jobless figures north of the border mirror the UK as a whole, and therefore it makes sense to keep the currency. This matters, as its easier to design a monetary policy for the whole of the UK as it now stands.

The Scots could always join the Euro although again they would have no control on policy.  Alternatively, they could adopt their own currency to avoid the unstable hyper-growth which happened to Ireland’s economy when it joined the Euro.  As the Irish did not have control of interest rates to act as a breaking mechanism it ‘overheated’.

Also, the Bank of England is part owned by Scotland (8.4%) as it’s a UK asset and the English are hardly in a hurry for the Scots to run off with this amount right now.

If Scotland was an employee should it stay with its company and work with the current system or take a leap into the unknown? It would do well to remember carpe diem, and take a leap into the new, but potentially rewarding, unknown.

In my opinion, If Scotland wants to aim to be more Scandinavian and less like the eurozone then it must gets its own currency underway and go for it ‘all or nothing’.

Alex Salmond, Bank of england, David Bell, eurozone, First Minister; First Minister of Scotland, monetary policy, Professor of Economics, the Euro

Recently, there has been much scaremongering regarding the prospect of a W-shaped recession. In my opinion, people have got carried away, as it’s not all doom and gloom from where I’m standing.

The trouble stems from the Bank of England’s downward revision of their projected growth figures for 2011 from 3.5% down to 2.5% as well as Mervyn King’s ominous description of the recovery as “choppy”. Judging by the newspaper headlines last week, you could have been forgiven for thinking that our fragile confidence was about to be destroyed.

Do not be misled though as I would prefer to look at all this as the bottle being half full rather than half empty. The Bank of England is forecasting 0.7% growth for the last two quarters of 2010 and growth in excess of 2% next year. The Office for Budget Responsibility is also forecasting growth around the same level. Last year, we would have revelled at the economy growing at all, so 2.5% is still very encouraging.
Certainly, with regard to taxation, activity is increasing.

So far the focus has been on Indirect Tax and Transfer Pricing; understandably so, given HMRC’s desire to tighten the rules. Perhaps more encouragingly there has been some increase in corporate tax hiring. So far this has been limited but given the more general nature of this area, it’s an excellent barometer.

There is still little movement at the senior end of the market currently as senior tax professionals are choosing to stay put as present. However, with a bit of economic growth and some more confidence, they will become more inclined to move on and then we’ll see demand return.

My view is that the recovery is going to be slow and possibly “choppy” but it’s still a recovery and that’s definitely cause for positivity.

Bank of england, Corporate Tax hring, HMRC, Indirect tax, Mervyn King, recession, Tax, Transfer pricing