Scotland's own currency if independent would be 'worth 20 per cent less than sterling', claims economist

Scots could face lower incomes and more expensive holidays should an independent Scotland use a separate currency to the pound, an economist has said.

In an article for The Times, Tony Mackay who advises the World Bank, the Asian Development Bank and the European Commission, claimed a new Scottish currency would be worth between 18 and 22 per cent less than pound sterling.

He also warned that a hard border, if one was created following Scottish independence, would hurt the Scottish export industry and lead to businesses losing out on profits.

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An independent Scotland using its own currency would lead to lower incomes, an economist has said.An independent Scotland using its own currency would lead to lower incomes, an economist has said.
An independent Scotland using its own currency would lead to lower incomes, an economist has said.
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Mr Mackay said: “The bottom line is that average incomes in Scotland would be lower. Many people would be unaffected, but those working in export industries and the public sector would be. Foreign holidays, including trips to England, would be more expensive.”

His analysis, based on Brexit forecasts and the experience so far of exporters post-Brexit, estimates that exports to England could drop by 15 per cent.

Mr Mackay said: “There would be a similar fall in company profits in Scotland. Many businesses would try to diversify and find alternative overseas markets, but that could also be time-consuming and costly.”

He said a hard border “would undoubtedly reduce trade, as industries such as fish processing and whisky have already found out with the new EU border”.

"There could be restrictions or quotas on the export and import of specific products and services,” he said.

The SNP’s current strategy for a post-independent Scotland would see the newly independent country continue to use sterling during a transitionary period before switching to a new Scottish currency.

This would be alongside free trade with the rest of the UK following a free trade agreement and a pledge to rejoin the European Union as soon as possible after independence.

Responding to the claims from Mr Mackay, SNP depute leader Keith Brown said there was no reason why an independent Scotland couldn't succeed.

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He said: “Denmark’s national income per head is around 20 per cent higher than the UK’s and Norway’s is around 40 per cent.

"With Scotland’s abundant resources, the full powers of independence and as part of the European single market there is no reason we cannot emulate the success of similar-sized countries.”

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