Currency union case is ‘weak’, say STUC

Scottish independence: The case for a formal currency union between an independent Scotland and the rest of the UK is “weak”, Scotland’s biggest trade union body has said.

STUC general secretary Grahame Smith. Picture: Michael Gillen

The Scottish Trades Union Congress (STUC) said it was disappointed that the Scottish Government had been “reticent” in setting out the consequences of alternative currency options.

The trade union body has refused to take sides in the referendum and its latest report on the key issues criticises both sides in the debate for “overblown” claims and counter claims.

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All three of the pro-union parties have repeatedly ruled out a formal currency union with the rest of the UK in the event of a Yes vote, a stance dismissed by the Nationalists as political posturing.

In its A Just Scotland report, the trade union said: “The STUC remains of the view that the Scottish Government’s case for a formal currency union with rUK post-independence is weak.

“It is also disappointing that the Scottish Government has been so reticent in discussing the implications of other currency options.

“The STUC is concerned about Scottish Government statements that it will refuse to accept a share of the stock of UK debt if currency union isn’t negotiated.”

The report argues the question of how tax might be used for redistributive policies has been “largely absent” from the debate on both sides.

It says: “Both sides have relied upon their own exaggerated predictions on fiscal balance, rather than the use of additional revenue raising to justify their respective positions.

“This is nothing other than a repeat of existing orthodoxies and a tacit admission that neither side believes, or is willing to argue, that there must be an alternative approach to taxation if redistribution is to be achieved.”

Both the Yes and No camps also “have little to say” on employment rights such as pay, better quality jobs and employment regulation, the report adds.

It concludes that the absence of agreements with the EU and UK over the fate of cross-border pensions “remains for some a substantial disincentive to choose independence”.

Grahame Smith, STUC General Secretary, said: “We have spent much of the last two years urging both sides of the debate to recognise and to bring forward arguments to address the fundamental inequalities of wealth and income in society. We have been successful to a degree.

“But this report concludes that neither of the mainstream referendum campaign groups, nor the respective governments, has been willing to consistently challenge the orthodoxies which have led to the prevailing conditions.”

A Yes Scotland spokesman said: “Creating a more socially just Scotland is one of the main reasons more and more people will be voting Yes next week. We agree with the STUC that Scotland is wealthy enough to be a fairer nation and with a Yes we can make sure that Scotland’s vast wealth works better for all the people who live here.

“The STUC’s approach to this referendum has been exemplary, engaging its members and focusing on the issues of greatest importance. After a Yes, trade union members will play a very big role in building the better Scotland that we all know can be achieved. Only with a Yes will we get the vital new job-creating powers and the ability to fully protect our NHS - two issues that we know are of vital importance to trade union members and people across Scotland.”