Mackay in ‘full retreat’ over new Scots currency plan after Yes vote
● Pound likely to be used for years after independence
The SNP leadership has been accused of a “full retreat” on its new policy to adopt a standalone Scottish currency after independence.
Finance secretary Derek Mackay sought to reassure people in Scotland that the switch would not happen until residents and businesses were prepared, as he addressed MSPS at Holyrood yesterday.
The UK pound would be used in the interim, but this would leave Scotland’s monetary policy in areas such as interest rates in the hands of the Bank of England.
The SNP leadership suffered an embarrassing defeat at the party’s conference on Saturday as delegates voted to fasttrack the proposed transition to a new currency “as soon as is practicable” after a Yes vote, with a decision to be taken on the new currency within five years of independence.
But Mr Mackay told MSPS yesterday: “Our position is clear: until a new currency can be safely and securely established in the interests of the whole economy, the currency of an independent Scotland should continue to be the pound sterling.”
This marks a departure from the 2014 plan to retain the pound in a currency union with the rest of the UK.
But at the weekend, the leadership did see off party activists seeking to ditch the six fiscal tests to be met before the transition to a new currency takes place.
Mr Mackay said one of these is the “financial requirements of Scottish residents and businesses”. Others include bringing down the country’s deficit, as well as building up cash reserves and credibility of the country’s new central bank.
“Our proposals are to keep the pound in the immediate term,” he added.
“An SNP government will take the steps necessary to enable the Scottish Parliament to authorise the preparation of a Scottish currency as soon as practicable after independence.”
Nationalist MSP Bruce Crawford, convener of Holyrood’s finance committee, also sought to play down the impact of the new policy.
He said: “The currency that the people of Scotland will use the day before an independence vote will be the same currency they will use the day after, the day after that and the day after that – that being the pound.”
But Scottish Conservative finance spokesman Murdo Fraser accused the SNP of seeking to backtrack on its new economic plan. He said: “That’s been three days since the vote at his conference and already the cabinet secretary is in full retreat from the position set out at the conference.”
And Labour finance spokesman James Kelly said the new Scottish currency would hit “mortgages, savings and pensions” with costs of 30 per cent to convert into sterling.
He added: “This would have a catastrophic impact on business and the economy.”
“Until a new currency can be safely and securely established … the currency of an independent Scotland should continue to be the pound sterling”
DEREK MACKAY