Scots have become so bored with the never ending SNP campaign to leave the UK that they would be forgiven for treating yesterday’s Growth Commission report as more background noise.
That would be a mistake. This is a report which acknowledges some very uncomfortable truths.
Since we voted No in 2014, Scotland’s public finances have deteriorated as revenues from North Sea oil have all but dried up. The response to this from the SNP until now had been to deny the official figures.
The Growth Commission report just might mark the start of the SNP collectively removing their heads from the sand. Independence was presented as a way to end cuts to public services. This new independence model sets out financial plans that extend, rather than end, austerity.
Scotland’s far larger deficit is no longer disputed. The SNP now offer New Zealand as an example of how a country with a deficit might get back onto a more stable footing. Their choice of country is accidentally revealing.
New Zealand’s sizeable deficit was caused in large part by the costs of rebuilding after the Canterbury earthquake. If the supporters of independence choose to compare its financial impact to a devastating earthquake, it should give us all pause for thought.
On currency, we are reminded of when Alex Salmond couldn’t answer a simple question Alistair Darling put to him in a 2014 TV debate: given the UK won’t enter into the currency union he was proposing, what was plan B?
The report explains why he was so reticent to reveal the real answer.
The currency union which the SNP believe is best for Scotland is dead. In its place for a period of months or years, we’d use the pound informally – a situation known as sterlingisation. Scotland would become the only advanced economy in the world without a currency of our own.
Operating without a currency we control means we would be required to build up large reserves of foreign currency, self-insuring against future crises. Public services, already deprived of UK funding, would be further bled to accumulate these funds.
The financial markets would likely decide how long this could be tolerated rather than a Scottish government. Then, after that upheaval, the SNP suggest we would switch to a new untested currency with all the costs and barriers to trade that brings.
l Blair McDougall was chief executive of the Better Together campaign against Scottish independence