The Courier & Advertiser (Perth and Perthshire Edition)
Scots ‘will use pound for a decade’ after break-up
SNP report claims that the country can supercharge economic growth with £9bn in taxes – but independence-backing tax expert ridicules plan to stick with sterling
Scotland will continue using the pound for at least a decade after independence under an SNP blueprint proposing major spending cuts in the aftermath of a Yes vote.
The hotly-anticipated report lays bare the challenges of a breakaway but says the country can supercharge economic growth to increase the annual tax take by £9 billion within a few years.
In the most significant proindependence publication since the 2014 white paper, the Growth Commission claims Scotland could triple annual GDP growth in 10 years through measures such as tax breaks to attract skilled migrants, encouraging more Scots into work and increasing productivity.
Andrew Wilson, the former SNP MSP and the report’s author, said sticking with the pound in at least the short term would offer “stability and certainty”.
“We think the government should be focused on getting the economy growing, setting up the new country, getting the public finances stable and in order from where we inherit them, rather than on setting up a new currency,” he told the BBC.
But the SNP plan was slated by independence-supporting tax expert Richard Murphy, a professor of international political economy at London’s City University.
He said retaining sterling without having any control over the setting of interest rates and other monetary policies means an independent Scotland would “remain enslaved by the pound and tied to the apron strings of London”.
Prof Murphy also blew a hole in the SNP’s reliance on independence as a way of escaping Brexit by saying the currency proposal means “all negative impacts of Brexit will be imported directly into the Scottish economy”.
St Andrews professor Andrew Hughes Hallett, who sat on the Growth Commission, suggested it is not a given Scotland would opt for its own currency.
He told The Courier that after a transition period “then we may make the decision to go to our own currency. Or not, whichever is most advantageous.”
The currency plan in the 354-page document said Scottish ministers must only establish a new currency if six tough tests are met, which include having sufficient financial reserves, a credible central bank and if the Scots economy becomes “significantly out of phase” with the UK cycle, the Growth Commission report says.
On the SNP’s new currency plan, Scottish Conservative leader Ruth Davidson said: “I’m not entirely sure that is enough for the people of Scotland to want to gamble their mortgage on, their pensions on, their wages on and their future on.”
The report, which is largely silent on how or whether an independent Scotland would attempt to get back into the EU, said Scotland would sign up to the euro currency “only if and when such a decision is in the best interests of both Scotland and the EU”.
The Scottish Government would complete a comprehensive review of UK spending within two years of a Yes vote, with the aim of saving £1bn, the analysis adds.
The review would “identify savings from costs that need not be replicated” but would not include defence, which would be reviewed separately.