Tuesday 21 May 2013

Presbyterianism cracking at the seams - the cost of compromise

This post is an addendum to yesterday's post about the General Assembly's decision concerning the ordination of ministers in civil partnerships.

It has been suggested elsewhere, something I forgot to mention in this original post. The structure of the proposal, which the General Assembly agreed, sits very uncomfortably with Presbyterianism. Matters of doctrine are intended to be able to be matters for the General Assembly to determine from time to time, within certain constraints. As a caveat to this, there is an acceptance that ordained ministers may personally dissent on matters which "do not enter into the substance of faith". But acting openly contrary to doctrine adopted and declared by the General Assembly is another thing altogether. The premise of presbyterianism is that once decisions on doctrine have been made, that church courts are to abide by them, even if those composing them disagree with the principles of the relevant doctrine.

What the Church of Scotland has adopted is a proposal which runs counter to the very idea of presbyterian governance as opposed simply to a principle of far looser congregationalism. It is, quite simply, not the same thing "not to have a doctrine" on same-sex relationships, and to have a doctrine with which congregations can disagree and are specifically empowered to act without consequence in direct contravention thereto. Leaving aside the practical differences between the liberal 2A proposal and the traditionalist compromise (2D) this was the essential theological divide between those two propositions. 2A said that the Church should not have a doctrine proclaiming "God's word" to be against same-sex relationships, whereas 2D said that the church SHOULD have such a doctrine but that certain congregations should be able to ignore it. This forms part of the very legitimate dissatisfaction liberals have with this proposal: the symbolic message, even if these proposals go to plan, and congregations can appoint gay clergy free from fear of reproach of Presbytery or higher courts, is that same sex relationships are assumed by the Church to be wrong.

In pushing through 2D, what the so-called traditionalist wing of the Church of Scotland have done, far from protecting the historical institutions and norms of the Kirk, is to erode part of the defining features of presbyterian governance and the relationship between its hierarchy of courts and the determination of doctrine. The average parishioner, and dare I say it, the average clergyman these days, probably does not care much for formal structures and is more concerned about the substantive debates that take place, across yet within most denominations, about theological issues. Yet one is minded of the history and premises behind the Kirk's form of governance and why it exists as a distinct denomination, and why other Presbyterian churches have emulated that approach. The traditionalist motion has, even if unintentionally, attacked presbyterianism, and undermined what "doctrine" actually means in that context.

Dr Thomas Chalmers was the leader of the evangelicals who left the Church of Scotland to form the Free Church in 1843 over what he saw as a "vitiated establishment". He believed at that time that presbyterian establishment had been undermined by the state intervening to let landlords appoint ministers contrary to the wishes of their congregations. There is perhaps an amusing irony that the Church of Scotland has come full circle, and on a question of who may ordain whom to serve in particular congregations, but with the sides reversed! For today it is the evangelicals, not the moderates, who are showing less integrity for the essence of a presbyterian polity. It is they who seek a fudged compromise to preserve a conservative 'establishment'. Meanwhile it is the liberals who articulated the most constitutionally honest option, which would have preserved the fundamentals of presbyterian polity, and which would have more honestly reflected the reality of the Church of Scotland's organised polity. The body of the Kirk, in reality, no longer considers homosexual relationships to be doctrinally unacceptable. That formal position was already becoming untenable given the fundamental disagreement between "traditionalists" and "revisionists". At best, it could only intellectually be considered a matter that some considered immoral and others did not, but which was in no sense susbtantially considered to be at the heart of the substance of faith held across the Kirk's spectrum.

The Kirk's new status quo, propagated by self-described traditionalists, manages to protect neither the intellectual integrity of doctrine, nor the unique governance of the Church of Scotland. If Dr Chalmers had been of this age, he may yet have still been against an open interpretation of scripture that made no assumptions about the morality of same-sex relationships. Yet he would surely also have been deeply disturbed at what the Church has had to become to avoid repeating a split like the one he led himself. This agnostic, brought up in the Church of Scotland (by very liberal ministers for parents), would respectfully suggest that presbyterianism may have over-reached its elastic limit with this compromise.

Monday 20 May 2013

Church of Scotland - Religious progress one fudge at a time

The General Assembly crawled to consensus
Today, the Church of Scotland at the General Assembly received a report from the Theological Commission concerning the ordination of ministers who are in civil partnerships. That report offered two, greatly divergent options.

There was the "revisionist" proposal (2A), which would have (subject to ratification by a majority of Presbyteries, and then the General Assembly of 2014) enabled ministers who were in civil partnerships to be ordained and to serve as ministers, but to permit individual congregations formally to opt-out of calling ministers to their charge in such relationships on the grounds of their "active" sexuality, and to excuse other ministers in the same Presbytery from taking positive steps to sustain the call. Put simply, it would have ended both the doctrinal and the practical impediment to the ordination of those in legally recognised same-sex relationships.

The "traditional" option (2B), would re-affirm the Church's historical doctrine holding homosexual relationships to be contrary to scripture and thus, by extension, formally to make it a disciplinary matter and a bar to ordination as a minister, for those in civil partnerships.

In addition to this, two further alternatives were put forward. A hyper-liberal position (2C), later withdrawn, would have effectively dropped the requirement for same-sex couples to be in a civil partnership. There was the suggestion that this would have created an inconsistency with the Church's more general teachings and requirements placed upon heterosexual ministers, for whom it is a disciplinary matter to have a sexual relationship with someone outside of marriage. A final alternative (2D) proposed that the doctrinal opposition to same-sex relationships be retained, but that individual congregations would be permitted to opt-in to recruiting ministers in same-sex couples without facing disciplinary action from Presbytery.

That final motion was proposed by members of the traditionalist wing of the Church of Scotland, no doubt mindful of the potential of a strongly liberal vote to split the Kirk, and perhaps fearing that the 2B proposal was unlikely to succeed at all. In the end, 2D was adopted comprehensively by the General Assembly, with the 2B proposal losing comprehensively at the first ballot, and 2D trumping 2A fairly comfortably on the second. It certainly seems to be the case that some liberals crowded around the 2D proposal as a consensus option.

The Kirk formally remains critical of same-sex relationships, and has pursued what many will see as a classic fudge, the like of which the Kirk has become all too familiar with. Moreover, the 2D proposal will facilitate ordination and calling of ministers in civil partnerships at least a year later than planned. Because the motion was submitted so late, there is not yet a legal framework onto which to map the proposal to make it compatible with church and civil law (especially employment law and Art 8 ECHR); that has been left to the Legal Questions Committee to address at the next General Assembly in 2014. There will then be the need to pass that proposal, if approved, by a majority of Presbyteries in 2014-15, and the General Assembly to approve it again in 2015, under the terms of the Barrier Act. It is a piece of Church legislation that safeguards against unintended and radical departures from established doctrine, worship, discipline and governance.

Had 2A have passed, it would have meant its set of proposals were in force after the 2014. Many liberal Christians will rightly be critical of what has been decided, in that it fudges questions of doctrine instead of unambiguously promulgating a message of equality and inclusivity, and because 2D represents a delay. It is even possible that at the next General Assembly, the whole principles of the debate will be re-opened and disputed, even if the Legal Questions Committee report is tightly drafted. However, it is at least arguable that 2D is more likely to be approved by conservative Presbyteries, especially in the Highlands and Islands, given that the motion was on the initiative of the more evangelical wing. As a proposal it was specifically designed to prevent a split in the Church, and if it succeeds, it will achieve many of the practical aims of long-time liberal campaigners.

There remain considerable problems with the new compromise, including potential fault-lines in linked charges where one congregation seeks to opt-out of default Kirk doctrine and another does not. Moreover, it creates a conservative assumption that congregations will not seek to depart from the traditionalist perspective.

The Kirk is, in many respects, still far behind the rest of Scottish society on questions of sexuality, including equal marriage. It faces a constant dilemma of trying to accommodate its position as a "national" church with views at least as divergent as in any other denomination around the globe. Though it has a habit for innovative solutions to its internal conflicts, from the "spiritual independence" of the Church of Scotland Act 1921 to the theological commission itself, it does suggest a compromise that all will accept, but none will be especially pleased about. In much the same way as equal rights campaigners considered civil partnerships themselves progress, but an inadequate and awkward half-way house, so too that is what the Church of Scotland has done today. Hard though it is for liberals to accept, sometimes social progress in our institutions come not by great strides forward, but one fudge after another.

Wednesday 1 May 2013

The million groat question - why the currency matters

"The referendum isn't about party politics"

"Don't want one of your bastard English pounds!"
A common refrain from both campaign teams in the independence referendum. Usually as soon as it's inconvenient for Better Together to get tarred by the record in government and policies of the three main Westminster parties, and by Yes Scotland whenever they're tarred by the SNP's record at Holyrood or their policies. Of course, it's not illegitimate for them to do this for the most part. A good referendum which debates this issue properly would try to dissociate it as much as possible from party-politics, albeit that's probably politically not viable in the quite hostile environment of Scottish politics. When the UK had the referendum on the EEC, there were multiple campaign groups and the issue was dealt with on its own merits rather than through the prism of inter-party disputes (albeit it did expose intra-party ones!). Moreover, there will be good arguments for independence and for the union on all regular sides of political divides: left versus right, liberal versus authoritarian, progressive versus conservative.

Where this is not true, however, is in respect of questions of transition and the mechanics of setting up an independent Scotland. These issues ought not, in the long-run, to affect Scotland's ability to be prosperous and broadly to hold its own in the global market and community. But they are important in making sure we set-up an independent Scotland on the strongest footing possible. A good referendum is one which pits the strongest arguments for a reformed British state against the strongest, most thought through vision for setting up an independent Scotland.

The sovereign state has become a far more complex beast than when self-determination first came in-vogue in the aftermath of WWI, and even since the fall of the Soviet Union. States do exist in a global market, where wealth flows more freely and where decisions are made by reference to multi-national organisations. I don't wish to dwell too much on the latter (perhaps for another post) but understanding economics in a global perspective is critical to articulating a coherent vision for an independent Scotland.

SNP matter more than YesScotland with this question

The SNP have said (at least since the Eurozone crisis) that their intention with the currency is to retain the use of the pound (£), the GBP, and to be part of a currency union with the rest of the UK. Note, of course, that there is no pre-existing provision in UK or international law that provides "independence events" (call it a secession, a separation, whatever) lead to currency being shared in such an arrangement. There is a heavily entrenched norm that sovereign states have the right to issue currency, and to delegate that power to bodies as they see fit (whether domestically by a central bank or to an international organisation as with the Euro). In practice, currency is issued by sovereign states or quasi-sovereign states as the forbearance of a sovereign state. It will, therefore, have to be something that is negotiated if it is to exist. But who negotiates? In whose interest do they act?

There seems to be an implicit understanding that the Scottish Government, or some related delegation, will represent Scotland in any domestic negotiations, and that some sort of UK Government derived delegation will represent the interests of rUK. This means that the fate of the currency from 2016, in the event of a yes vote, depends on these two groups agreeing something. As such, it really doesn't especially matter what YesScotland thinks about the currency. Any long-term decisions about whether we join the Euro, the pound, or another currency union, or have our own currency, would ultimately fall to future political debate, and there is nothing wrong with those on either side disagreeing with one another about what those long-term trends should be, whether within the UK or in an independent Scotland.

Our central bank could issue these
if we keep BoE notes in reserve

But with an independence event, the situation is different. When currency is issued based on the exercise of a sovereign right, and you are looking to create a new sovereign state, there has to be an explicit statement about what happens to that sovereign power. The interim arrangements matter, therefore the opinions of the respective prospective negotiators matters, in facilitating the situation on Day 1 of our brave new world.

The UK Government came out last week and said that they did not believe a currency union would be an especially viable proposition, and that it may be contrary to the interests of rUK to agree to sharing this sovereignty, at least without stringent fiscal controls. They are perhaps weary of the effect that fiscal divergence within a currency union, of which the Euro is far from the first example. You can agree or disagree about whether their fears are founded, and whether they have ulterior motives to unsettle the Yes campaign by being deliberately unconstructive, but the message here is that they are not prepared to share sovereign power in this way with an independent Scotland. And the Scottish Government/SNP/Scotland can't make them do that, either.

So even if a currency union is the SNP's preference, they can't just shout about the benefits of such a union (such as Scottish oil, drinks and renewable energy exports being positive to the balance of payments). They have to accept that such an arrangement is contingent on an agreement being reached, and to acknowledge that, in the absence of such an agreement, there has to be a contingency plan to facilitate an independence settlement, which does not depend upon Scotland being able to agree something substantial with the UK.

The alternatives to currency union

There are a number of options here, and they all need carefully considered.

1. Using the pound unilaterally

This isn't unprecedented: many countries use the US Dollar and the Euro unilaterally, for ease of trade with regional and/or global partners and because a local currency would be too weak and vulnerable to speculation. The drawbacks are that we would have zero control over monetary policy, which would be set by the rUK central bank, the Bank of England, and we would lack our own lender of last resort. This significantly limits the fiscal options that we can pursue in an independent Scotland, as we could not compensate with other "economic levers" (to borrow part of the SNP's popular narrative).

As a very superficial aside, such a situation would not protect "Scottish banknotes", as the right to issue those notes would depend upon rUK law surrounding the relationship between the Bank of England and those having the right to print currency. RBS, HBOS and Clydesdale might well continue their arrangements of depositing Bank of England notes in lieu of the notes they print for circulation in Scotland, but such an agreement is out of the hands of any independent Scotland's government.

2. Peg the Groat

Another option is to have our own currency, but to peg it to the pound, making it exchangeable at par. Some currencies already do this: for instance the Isle Of Man holds a large amount of Bank of England notes with its own central bank (as an indirect form of "reserve"), and issues the same amount of Manx notes. Note that this option also gives Scotland no real control over its monetary policy, thus by extension constrains its fiscal policy, as it has to maintain its reserve to notes ratio. The premise that we maintain something, perhaps called the (Scots) pound, freely exchangeable at par value with the currency used by the rUK part of the British isles, assumes that we constrain significant aspects of fiscal and monetary freedom, the very powers that are at the core of a lot of the "prosperity" arguments made by those in favour of independence. Denmark sort-of pegs its currency to the Euro, within a defined range, and relies on a mixed set of deposits in its central bank, that allow it to fluctuate minimally where circumstances require. This has the benefit of stability for economic planning, and encourages its economy to stay reasonably convergent with the Eurozone as a whole, but at the expense of full fiscal and monetary freedom.

3. Float the Groat

The final option is that we have our own currency and make no interim commitment to peg it to the pound. We would therefore have full control over our monetary and fiscal policy. The down-side to this is that currencies which float may prove a practical inhibitor to trade with the rest of the UK, as the volume of transactions might decrease a little.

In both the second and the third options, there would have to be some sort of transitional period facilitating the introduction of a new currency side-by-side. Some sort of fiscal controls would also have to be put in place during that period, in Scotland, to ensure that there isn't any capital flight. This, to my mind, is exactly what the period between the referendum and independence day should be for. Shadow institutions, including a central bank that holds deposits, whether of Bank of England notes, or another reserve (Scotland would be negotiating a pro-rata share of UK assets including value equal to reserves of (e.g.) gold kept in the Bank of England as security against the issue of GBP).

Since a division of assets will have to be agreed anyway in advance of independence, it seems to me to make more sense to sort-out the structural issues with the currency at that point, and to make sure that as few issues as possible require consent from a (reluctant) rUK negotiating team. It is clear they do not want a currency union, and all that having a currency union means is that if we change our mind later down the line we have to facilitate a transition to a different currency anyway. The Czechs and Slovaks found within a solitary month that their currency union was not viable, and had to decouple from one another as a result. You will probably find that the UK, if it didn't want to share a currency union, would seek to reduce the physical amount of reserves in the Bank of England, to prevent the value of the pound suddenly jumping as Bank of England notes fell out of circulation in Scotland. By presenting the issue as a question of simple asset division, it is less likely that rUK would object to Scotland claiming "its share" to set up its own currency.

Why you should give a damn

The bigger point here is that the SNP have tangled themselves up in knots over this issue. Their government is likely to be negotiating on Scotland's behalf in trying to settle these issues. We should be concerned that their attitude towards this is not to make clear their plan and their contingencies, and to spell out what "keeping the pound" actually means and what the alternatives would mean, rather to fall into the trap of lazy politicking about Better Together talking Scotland down. They have form for this type of siege mentality overriding what is in essence sensible policy.

Perhaps most importantly, their policy of currency union undermines some of the strongest economic arguments for independence. Far from giving us the fiscal levers to make our own decisions, a currency union shackles us to, if anything, more stringent fiscal demands than some proposals like DevoMax, where at least there would be in-built fiscal transfer mechanisms to cope with disparities. In a currency union in particular where one party would almost certainly court significantly disproportionate influence, the terms of the fiscal pact they'd have to agree would not be even that enjoyed by stable and strong Eurozone countries. And actually, a currency union expends more political capital than many of the practical alternatives. It probably makes sense to look to peg a new currency to the pound for a couple of years, to satisfy the markets that an independent Scotland would be fiscally trustworthy and therefore to facilitate a favourable environment in which bonds could be issued internationally. But we don't need a currency union to do that. We don't need a currency union to have a freely exchangeable currency at par to the rest of the Union. We can do this ourselves.

Stop being a fearty, Eck! Use all the fiscal levers.
We can do this ourselves. It's the most compelling message the independence camp has to articulate if it is to win. And the SNP are undermining it. Their approach to this question is half-baked and half-hearted. They are afraid of arguing the strongest case because they aren't confident enough in their own ability to argue that independence is about a break with the status quo. They want to make it look as similar to our way of life as it is now: all of the benefits but no squaring of the circle of how we get there. There are significant opportunities that accompany the risks of independence. But many won't believe us about the opportunities if we aren't completely transparent about the risks and what steps we plan to take to mitigate them.

The currency question won't stop people like me who have already decided they're voting yes from continuing to do so. What it will do, though, is cement perceptions that the case for independence is inadequately thought through, especially for neutrals and pro-union voices and particularly for those who have come to associate independence and the Yes campaign with "the SNP". This is one of a handful of situations where what the SNP believe matters for an independent Scotland is actually relevant to the wider debate. By having a half-hearted answer to this question, it creates a semblance of a regime which is a shambles. And for a party whose raison-d'etre is Scottish independence, not to have discussed these issues in detail and to have this information ready for the public is negligent. It suggests they don't know what they're talking about, and I don't trust them to play Scotland's hand at its strongest. Whether we like it or not, competence will play a part in swaying people's views in the referendum. Salmond's party's bluster on this can take them only so far.