Research Director writes for Conservative Home - Scotland could use sterling, without a central bank

The Research Director of the Adam Smith Institute, Sam Bowman, wrote an op-ed for Conservative Home. He argued that if Scotland were to become independent, it should keep using the pound, with or without permission from Westminster.

In practical terms, there’s virtually nothing stopping any country in the world from using any other country’s currency as its own. Indeed, some countries already do this – notably, the ‘dollarized’ economies of Panama, Ecuador and El Salvador.

So Scotland could keep using the pound with or without a currency union. The difference would be that a ‘currency union’ would force the Bank of England to consider Scottish interests when making decisions about things like setting interest rates, and – crucially – acting as a lender of last resort to Scottish banks, lending to them when they were illiquid.

Read the op-ed here.

Sam Bowman's comments on the currency union are featured in City AM

The Research Director of the Adam Smith Institute, Sam Bowman, was quoted in a City Am article discussing a potential currency union between Scotland and the rest of the UK.

However, there seems little doubt that an independent Scotland would be within its rights to declare sterling sole legal tender and borrowing it on the financial markets to hold in reserve.

"Everyone says Mr Salmond needs a Plan B if the UK does not agree to a currency union with Scotland. But unilateral adoption should be Plan A, making Scotland’s economy more stable and secure. The UK’s obstinacy would be Scotland’s opportunity," said Sam Bowman, research director of the Adam Smith Institute on Wednesday.

Read the article here.

Sam Bowman's comments on an independent Scotland's use of the pound are featured on The Guardian's live blog

The Adam Smith Institute's Research Director, Sam Bowman, was quoted on The Guardian live blog, arguing that an independent Scotland should unilaterally adopt the pound, with or without the permission of the rest of the UK.

During the debate Salmond refused to name a ‘Plan B’ currency for Scotland if the chancellor continues to oppose a currency union. Sam Bowman, research director of the Adam Smith Institute, has a couple of ideas.

An independent Scotland could flourish either by using the pound sterling without the permission of the rUK* (or by setting up a “ScotPound” pegged to sterling through a currency board, which would achieve a similar end).

(1) Because Scottish banks would not have access to a currency-printing lender of last resort, they would have to make their own provisions for illiquidity, and would necessarily act more prudently.

Scotland actually had this system of ‘free banking’ during the 18th and 19th centuries, during which time its economy boomed relative to England’s and its banks were remarkably secure. And Panama, which uses the US Dollar in this way, has the seventh most stable financial system in the world.

(2) Everyone says Mr Salmond needs a Plan B if the rUK does not agree to a currency union with Scotland. But unilateral adoption should be Plan A, making Scotland’s economy more stable and secure. The UK’s obstinacy would be Scotland’s opportunity.

Read The Guardian's live blog here.

Charlotte Bowyer argues that Bitcoin could become integral to UK commerce in the City AM Forum

The Adam Smith Institute's Head of Digital Policy, Charlotte Bowyer, argues that Bitcoin could become an integral part of UK commerce as the chancellor embraces the digital currency:

As the chancellor embraces Bitcoin, could it soon be integral to commerce in the UK?

Charlotte Bowyer, digital policy researcher at the Adam Smith Institute, says Yes.

Given the right conditions, digital currencies could revolutionise payments processing and become an integral part of UK commerce.

Paying online with Bitcoin could become a serious alternative to using Visa or PayPal – if they don’t adopt the technology themselves...

Read both sides of the debate here.

Press Release: An independent Scotland should keep the pound without rUK's permission

Commenting on Alex Salmond's refusal to name a 'Plan B' currency for Scotland if the Chancellor were to continue to oppose a currency union, Research Director of the Adam Smith Institute, Sam Bowman, said:  “An independent Scotland could flourish either by using the pound sterling without the permission of the rUK (or by setting up a “ScotPound” pegged to sterling through a currency board, which would achieve a similar end). This ‘sterlingization’ would emulate a number of Latin American countries that use the US Dollar without an official agreement with the US government. Because Scottish banks would not have access to a currency-printing lender of last resort, they would have to make their own provisions for illiquidity, and would necessarily act more prudently.

“Scotland actually had this system of ‘free banking’ during the 18th and 19th centuries, during which time its economy boomed relative to England’s and its banks were remarkably secure. And Panama, which uses the US Dollar in this way, has the seventh most stable financial system in the world.

“Everyone says Mr Salmond needs a Plan B if the rUK does not agree to a currency union with Scotland. But unilateral adoption should be Plan A, making Scotland's economy more stable and secure. The UK’s obstinacy would be Scotland’s opportunity.”

For further comments or to arrange an interview, contact Kate Andrews, Communications Manager, at kate@adamsmith.org / 07584 778207.

The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

ASI Fellow is quoted in The Telegraph on Bitcoin's recent decrease in value and volume

Adam Smith Institute Fellow Preston Byrne was quoted in The Telegraph, discussing the historically high price of Bitcoin and its recent decrease in value and volume.

Preston Byrne, a fellow of the Adam Smith Institute and a commercial lawyer specialising in securitisation and cryptocurrency in the City of London, says that speculative investment in the currency has pushed up its price...

...Mr Byrne suggests that while lower than a year ago, historically elevated prices and equivalently high fees have been enough to put off many new buyers. As such, daily transaction volumes have slumped, falling to levels typical for 2012 - when Bitcoin was relatively unknown.

Read the full article here.

New 'Incentive to Invest?' report is featured in The Times Educational Supplement

The Adam Smith Institute's new education report "Incentive to Invest: how education affects economic growth" was featured in The Times Educational Supplement journal.

Increase private education to boost GDP, study says:

Sending more children to private schools would add billions to the British economy, according to research released this week. GDP per capita int he UK could have been more than 5,000 higher in 2007 if access to private education had been opened up using taxpayer-funded vouchers, the report claims. This is because greater competition between private schools promotes better quality education, thus improving the economy, it argues. In the UK, 7 per cent of students attend private schools. But the study by right-wing think thank the Adam Smith Institute claims that if between 1960 and 2007 the attendance level had matched that of the Netherlands, where two-thirds of students are independently educated, the UK's annual growth rate would have been nearly 1 percentage point higher.

The report, “Incentive to Invest: How education affects economic growth”, reveals that Britain could add billions of pounds to its long-term economic growth by increasing access to private education.

Read the report here.

ASI's Head of Digital Policy is quoted in City AM, defending Uber from allegations of tax avoidance

The Adam Smith Institute's Head of Digital Policy, Charlotte Bowyer, was quoted in City AM, defending the Uber app from a Labour MP's accusation of tax avoidance.

The Adam Smith Institute's head of digital policy, Charlotte Bowyer, said:

'The anti-Uber establishment's previous attempts to quash the company have all failed, so their new tactic is to play the tax card. This is a sign of an increasingly desperate industry. Allegations of tax avoidance sound serious but are unlikely to stick: it is not unheard of - or illegal - for companies operating in the UK to pay tax elsewhere.

'Hodge falsely claims that Uber has negatively impacted the taxi and private drivers of London. In fact, Uber's innovative service has created a new segment of both casual taxi users and part-time drivers, growing the private transportation market and creating new opportunities for the drivers of London.'

Read the article here.

Kate Andrews debates the use of 'sobriety tags' to monitor offenders on Sky News

The ASI's Communications Manager, Kate Andrews, debates the Deputy Political Director of the Centre for Social Justice on Sky News over the legitimacy of tagging offenders with electronic alcohol monitors. She argues that the Mayor of London's plan to pilot this form of policing in four major London boroughs is an infringement on minor offender's civil liberties and sets a dangerous precedent that could allow the government to police consumption in a free society.