Holyrood power balance may force SNP into answering indyref currency questions - Martyn McLaughlin

Whether they are welcomed into government to bolster the independence cause and burnish the SNP’s chequered environment record, or merely left loitering in the porch of power, one of the most intriguing narratives in Holyrood’s sixth term will be how the Scottish Greens exert their influence.

Parliamentary arithmetic allowed the party to deliver on a series of key pledges in recent years, with its endorsement of the SNP government ensuring extra money for public sector workers and public transport. The numbers game is in play yet again. This time, the rules have changed.

The SNP can expect to come under even greater pressure over its climate targets, oil and gas economics, NATO, and other areas where a centrist orthodoxy prevails. The most intriguing biting point, however, will be the impact the Greens have on the push for independence.

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A great deal has been made about the similarities between the party and SNP when it comes to the conditions for seeking a new referendum - after all, together, they form a decisive pro-independence majority.

But they are united only in their opposition to Westminster’s intransigence. Look closer, and familiar differences remain when it comes to the nuts and bolts of Scotland’s constitutional future. If they can resolve them while waging a common fight against Boris Johnson’s administration, the groundwork will be laid for a revitalised Yes campaign. Allow them to fester, however, and the independence movement will be caught in a familiar rut.

Nowhere is this tension more evident than the question of an independent Scotland’s currency, an issue which reared its head during a BBC Scotland leaders’ debate in the run up to the election.

First Minister Nicola Sturgeon said that an independent Scotland would continue to use the pound “for as long as necessary,” with a new currency adopted “when the economic conditions, the fiscal conditions, the issues around trading and stability, were right to do that.” Asked how long that process would take, she stressed it was “not absolutely fixed.”

To put it charitably, this is not an entirely representative summary of her own party’s stance. One of the most significant decisions taken by the SNP since the 2014 referendum was its decision two years ago to endorse a separate Scottish currency.

Difficult questions about the currency of an independent Scotland remain. Picture: Jeff J Mitchell/Getty

This was, in part, a recognition that the Yes campaign’s arguments on currency were central to its loss. Having long maintained that a formal currency union with the rest of the UK was viable, it had little room for manoeuvre when the Treasury said otherwise.

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But the SNP’s about face was also sparked by grassroots discontent with the sustainable growth commission’s 2018 report, which proposed that Scotland would retain the pound for a lengthy transition period after independence.

The SNP has tried to ride both horses ever since, and while it backs a Scottish currency, the party’s leadership suffered a painful defeat over its tentative approach at its 2019 conference, with delegates backing a fast-track plan to adopt a new currency “as soon as practicable” after independence.

Six stringent fiscal tests set out by the growth commission remain in place, which include establishing the international and market credibility of a new central bank. But these are not conditions which will be met overnight, and the party’s footsoldiers have let Ms Sturgeon know that her patience is not contagious.

The language employed since then is sufficiently ambiguous to muddy the message on when Scotland would transition from the pound. It could best be summarised as ‘Take your time and hurry up’.

Whichever way you cut it, that is damaging, and it throws up some fundamental problems for the Yes camp: how, for example, could an independent Scotland join the EU if it is still in a currency union with the rest of the post-Brexit UK?

If it is irksome for the SNP’s leadership that many on the left of the party regard a lengthy transition period of a decade or more as unconscionable, the fact the Scottish Greens share that view is even more problematic.

It believes the move to a new currency should form part of the transition process immediately after a Yes vote, warning that any lengthy delay would inhibit Scotland’s prospects of joining the EU and hinder plans for a fairer, net zero economy.

The Greens’ position on this was largely similar in the lead up to the 2014 referendum. The key difference now, the SNP is reliant on the Greens’ support in Holyrood. With that comes the need for compromise.

With the pandemic recovery at the forefront of everyone’s minds, the Greens will not push on the currency issue any time soon. Be in no doubt, however, that when the government seeks - and gains - Holyrood’s approval for its referendum bill, tough questions will be asked.

There is an optimistic line of thought that this could work in the SNP’s favour by forcing it to bring some much needed clarity to the currency issue. If, and it is a big if, the Greens can force the SNP to commit to a definitive timeframe for the adoption of a new currency, it would make for a more digestible campaign line.

The reality, though, is that Ms Sturgeon would never make such a concrete commitment in the knowledge that no one can predict the future of the economy. That indefinite wait would be seized upon by the Greens as a barrier to an independent Scotland’s progress.

Both parties know they need to tread carefully around currency. If disagreement hardens into dissent, a new Yes campaign would be hamstrung by one of the central issues in the independence debate from the get go.

Equally, that risk ought to force the SNP’s hand so that it provides some long overdue answers. Some in the party think it is now on firmer footing when it comes to the currency question. Before long, they may find themselves disabused of such notions by critical friends.

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