Tom Peterkin: Get ready, it's indyref Groundhog Day again

Nicola Sturgeon must hope Growth Commission paper rises to the economic challenge, writes Tom Peterkin.

Like fading music hall artists who are missing the limelight, the ghosts of a referendum past have been dusting down their old acts in recent days.

First up, there was Alex Salmond making one of his innumerable curtain calls at an SNP branch meeting in Morningside where he declared he was ready to get stuck into indyref2. Next up was an old foe.

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Admittedly the lure of the greasepaint has not proved as seductive for Alistair (now Lord) Darling as it has been for Mr Salmond. Nevertheless the former Better Together leader was spirited back on stage to defend the Union at an event organised by the Policy Exchange think tank.

Supporters of Scottish independence march in Glasgow (Picture: John Devlin)
Supporters of Scottish independence march in Glasgow (Picture: John Devlin)

As they rattled sabres, there were other suggestions that history has begun to repeat itself.

Adding to the feeling of Groundhog Day was an attack on the BBC by the SNP, which harked back to the summer of 2014 when complaints about bias and demonstrations against the Corporation were thick on the ground.

Meanwhile just as he did before the 2014 referendum, the governor of the Bank of England Mark Carney gave his thoughts on an independent Scotland sharing the pound in a currency union with the rest of the UK.

Yes, a currency union was economically possible, said Mr Carney, before adding that there were “political ramifications” to the shared sovereignty that would be required for it to work.

With the 2014 battle scars yet to heal, it all sounded so familiar. That feeling of deja vue is only going to intensify as this week progresses, culminating with the publication tomorrow of the SNP’s latest economic blueprint for Scottish independence. It may not run to the 650-pages of the Scottish Government’s independence White Paper, but at 354-pages it promises to be a substantial document.

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Compiled by the SNP’s Growth Commission and chaired by the economist and former SNP MSP Andrew Wilson, the document will attempt to address some of the weaknesses of the White Paper.

Chief among these will be the question of what currency would be used by an independent Scotland – the issue that was the Yes side’s Achilles Heel last time round. Mr Wilson and co are expected to change tack from 2014’s shared Sterling prospectus to recommending a separate Scottish currency following a transition away from the pound.

Some much needed clarity is needed on the issue as far as the SNP is concerned. The underlying confusion over the future currency arrangements came to surface yet again this week thanks to the Economy Secretary Keith Brown.

Quizzed by MSPs on Holyrood’s Economy Committee, Mr Brown basically said he didn’t know what Scotland’s currency would be in the future before admitting he was not an expert in such matters.

As in 2014, the currency is emerging as the defining issue. But alongside the similarities between then and now, there are some crucial differences. The 2018 reprisal of the Salmond and Darling shows and other associated theatrical spats are, at this stage, merely part of a phoney war. The major hostilities have yet to start and will only do so if Nicola Sturgeon decides to fire the starting gun on indyref2. The other glaring difference between then and now is, of course, Brexit. It is EU withdrawal which is cited by Ms Sturgeon as the reason for her pointing the SNP towards the indyref route.

The reception that the Growth Commission document receives will do much to inform the SNP leader when and if she should demand a second vote. In Mr Wilson, Ms Sturgeon has chosen someone with “business friendly” credentials to make the case that the “optimism” of independence can trump the “despair” of Brexit.

No doubt Mr Wilson will do his very best to make that case, but one assumes he can’t simply gloss over the decline of the North Sea industry, low economic growth or Scotland’s £13.3 billion public spending deficit. Therefore he faces an enormous challenge. The prospect of indyref2 may energise the SNP’s core support. But businesses dislike uncertainty and responding to the uncertainty of Brexit with the uncertainty of another indyref will have limited appeal. Furthermore, no matter how elegant Mr Wilson’s currency solution happens to be, interfering with the status quo brings economic and practical challenges. Yesterday, for example, Professor Ronald MacDonald of Glasgow University warned that an independent Scotland would have to find £300 billion to set up its own currency.

Professor MacDonald, a veteran of the Better Together campaign and a macroeconomic expert in his university’s Adam Smith Business School, argued tens of billions in foreign exchange reserves would have to be raised to protect the new currency from economic shocks and speculators.

Ms Sturgeon also faces the not inconsiderable political challenge of actually staging a referendum. Theresa May is sticking doggedly to her “now is not the time” line. Indeed, Lord Darling ventured to say that he did not foresee indyref2 in his lifetime. Moreover the sea-change in public opinion, hoped for by Ms Sturgeon, that would see voters turned off by Brexit and turned on to independence has yet to materialise.

Ms Sturgeon must be hoping that Mr Wilson’s economic vision will act as a catalyst to take voters on that journey. Otherwise the SNP will have trouble moving the independence debate on from the battles it fought and lost in the past.