Should an independent Scotland adopt its own currency?

The currency issue was a major talking point ahead of the referendum. Deputy Scottish Labour leader Anas Sarwar and credit union worker Alison Dowling deliver a giant mock-up of a pound coin with Alex Salmond's face on it to Bute House in August 2014. Picture: SWNS
The currency issue was a major talking point ahead of the referendum. Deputy Scottish Labour leader Anas Sarwar and credit union worker Alison Dowling deliver a giant mock-up of a pound coin with Alex Salmond's face on it to Bute House in August 2014. Picture: SWNS
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The debate on what currency an independent Scotland could use might seem like it should be consigned to history along with the other minutiae of the 2014 referendum.

While the likehilood of a new vote on the country’s constitutional future in the short to medium term seems small, the currency issue again reared its head this week.

Former SNP MP George Kerevan claimed his sources suggest the party’s Growth Commission will recommend a ‘Scottish Pound’ be established in the event of independence.

Mr Kerevan said the plan includes recommendations that the exchange rate and reserve trading of this new new currency would be effectively tied to Sterling.

Concerns raised over currency are still viewed by veterans of the Yes campaign as being responsible for some of the most damaging polling for the independence movement.

Alistair Darling’s memorable questioning of Alex Salmond on the issue during their first televised debate has been cited, not unreasonably, as a turning point in the 2014 campaign.

Mr Kerevan, who lost his East Lothian seat at the snap election in June, believes the former First Minister’s plan of keeping the UK pound was fatal to the independence cause.

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So what’s changed? The short answer is Brexit.

As confirmed by grim statistics in a report by the international Organisation for Economic Co-operation and Development (OECD), the increasing prospect of a ‘no deal’ could mean new lows for the pound.

The currency which the Yes campaign sought to embrace in 2014 as plummeted to near-parity with the Euro since the shock vote to leave the EU in June of last year.

A further slump as a result of the UK and the EU note reaching an agreement before April 2019 could become a reality, according to OECD and other independent analysis.

Despite the plunge, a return to the days when the official SNP line was that the pound was a ‘millstone’ around Scotland’s neck seems unlikely.

Then, Alex Salmond urged an independent Scotland to embrace the Euro, but a damaged pound if and when the question is asked of the Scottish electorate could make a new Scottish currency, even one pegged to Sterling, a much easier sell.

The commission, headed by former MSP Andrew Wilson, is not due to report for several months, and Nicola Sturgeon’s party is decidedly cagey on potential outcomes.

A spokesman gave little away in a statement to The Scotsman. “The SNP has established a Growth Commission which, as well as making recommendations for measures to boost Scotland’s economy, will consider the most appropriate monetary policy arrangements to underpin a programme for sustainable growth in an independent Scotland,” he said.

“The SNP looks forward to receiving the Growth Commission’s report which will be published in due course.”

The Scottish Conservatives dimissed the prospect of a new currency.

A party spokesman said: “After making such a mess of the currency argument in 2014, you can understand why the SNP might want to do this.

“But the Nationalists have to realise this - it’s not just their currency argument that’s dead in the water, it’s their whole case for separation.”

The Scottish Greens, meanwhile, have long advocated creating a new currency.

Maggie Chapman, the Scottish Greens’ co-convener said: “Greens believe that independence is the best way to create an economy that works for all our citizens and allows us to make a positive contribution to the world.

“This means having our own currency, a currency that isn’t tied to sterling or any other currency.

“A Scottish currency would allow us to develop the smart and creative economy we need, based on the skills of our people and the enormous potential of Scotland as a country.”

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