SNP conference: George Kerevan attacks Growth Commission report

Andrew Wilson's Growth Commission criticised
Andrew Wilson's Growth Commission criticised
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The SNP’s new independence blueprint would leave Scotland “at the mercy of the banks” and put the poor at risk, a leading party figure has warned.

Economist and former MP George Kerevan was applauded at the SNP conference when he attacked Andrew Wilson’s Growth Commission.

Mr Kerevan said Mr Wilson’s plan was “too conservative” and argued that his currency proposals would not allow Scotland to grow its productivity.

Speaking at a fringe meeting at the SNP conference, Mr Kerevan criticised the Commission’s proposal to keep using the pound without shared control over the Bank of England after independence.

Mr Wilson’s 354-page document said Scotland should retain the pound for around a decade to give time to get the Scottish economy in order.

It said that Scotland should only establish its own currency once six stringent economic tests had been met.

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At the event hosted by the Institute of Economic Affairs, Mr Kerevan said Scotland’s lack of its own currency would deprive the nation of the mechanisms to influence the economy.
Under the arrangement to keep the pound, Scotland would not have the ability to alter monetary policy through levers such as interest rate levels.
Mr Kerevan argued that other small countries like New Zealand and the Scandinavian nations had devalued their currencies to prosper.
“Andrew rules out a Scottish currency, he thereby rules out the very mechanism that Scandinavian countries and New Zealand used in order to boost their productivity and realign their cost structure,” Mr Kerevan said.
“What the Scandinavian countries did in the 90s and what New Zealand did in the 90s and the last decade was to devalue the currency.
“What I’m saying is you can’t do what Scandinavia did. You can’t do what New Zealand did if you don’t have your own currency.
“If we don’t have our own currency, we are at the mercy of the banks. And it is the banks and the banking system in this UK - this warped banking system - that is one of the real causes of our under performance and our under investment and therefore our low productivity.”
Mr Kerevan’s analysis was greeted with applause from members at the event.
Mr Kerevan said the document was “a little bit too conservative” for his taste, adding that he would like a strategy that would pursue growth more vigorously.
Arguing that Mr Wilson’s approach could take up to 15 years to pay down the deficit, Mr Kerevan said: “My disagreement with Andrew is that I think we need to grow the economy more vigorously and solve the problem that way.
“Andrew thinks when we get growth we should split it between paying down the deficit and a little bit extra on public expenditure.”
Mr Kerevan said he had concerns that a “too conservative” strategy devised to win over people to independence did not do enough for the poor.
“But you don’t do that (win over No voters) if you start risking people at the other end - the poor, the unemployed, the people stuck in dead-end jobs, the companies desperate for investment capital, if you don’t provide something for them from independence then what is independence for?” Mr Kerevan said.

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