Cost of Scottish pound? Officials haven’t a clue

NO work has been done to estimate the extra costs to businesses of setting up a separate currency, the Scottish Government has confirmed.

Officials said they have not attempted to estimate the impact of ‘transaction costs’ on Scottish companies.

This is despite Nicola Sturgeon last month launching a high-profile economic prospectus for independence, which set out that the pound would be replaced by a separate currency ‘as soon as practicable’ if Scotland were to break away from the Union and become independent.

The Government confirmed that ‘no modelling of increased currency transaction costs due to an independent Scotland having a different currency’ was commissioned in the period from May 2021 to the end of October 2022. It also confirmed that there was no internal discussion of the issue by officials in emails or saved documents.

Sam Taylor, founder and chief executive of These Islands, who made a freedom of information request about the cost of a new currency, said: ‘Increased transaction costs for businesses and consumers are an unavoidable consequence of the SNP’s plan for independence and a new Scottish currency.

‘Nicola Sturgeon has long promised that her series of papers on independence would address the difficult questions about what it would actually mean for the lives of ordinary people.

‘With the Scottish Government having published its economic prospectus without even discussing, let alone modelling, this fundamental issue shows those promises to have been entirely empty.’

Miss Sturgeon repeatedly warned of the negative impact of a new Scottish currency during the 2014 referendum campaign, and said keeping the pound in a currency union would be ‘in Scotland’s best interests’.

In an attempt to back up the SNP’s case for a currency union, she argued at the time that businesses in the rest of the UK would face £500million a year of additional costs associated with changing currency in order to export goods into Scotland.

A Scottish Government document published during the 2014 campaign set out that ‘a separate Scottish currency has the potential to lead to transaction costs for UK businesses of approximately £500million a year’.

The SNP Government has never provided a figure for the potential transaction costs which Scottish businesses would face as a result of having a different currency.

Donald Cameron, Scottish Conservative constitutional affairs spokesman, said: ‘Almost every expert has predicted that a Scottish currency... would be an economic disaster and lead to severe austerity and prolonged economic stagnation.

‘But the SNP have commissioned no modelling nor, by their own admission, even discussed it.’

A Scottish Government spokesman said: ‘The powers of independence would enable the Scottish Government to replicate the success of many neighbouring countries which are more prosperous, productive and fairer than the UK.

‘Scotland would continue to use sterling until it is judged that conditions are suitable to move to a Scottish pound.’