Prudent approach on public finances may not be popular

NICOLA Sturgeon will have read the Growth Commission report with one central question in mind. Is it a package that will help her persuade voters of the economic case for independence?

The report deals with some of the Yes side’s apparent difficulties in the 2014 referendum. Insisting an independent Scotland would share the pound with the rest of the UK was an awkward sell given the rest of the UK was insistent it would not be willing to share.

But at the same time, it was also clear from the referendum polls most voters wanted to keep the pound.

The Commission’s answer to this conundrum is to say that, for the first 10 years of independence at least, Scotland would use the pound unilaterally – and accept that the country’s monetary policy was still being decided in Threadneedle Street.

The Yes side also struggled with the argument that an independent Scotland would have been unable to bail out Scotland’s two big banks during the 2008 financial crisis.

This is met by suggesting it would be little loss if the remaining largely nominal bank headquarters that now exist in Scotland after the financial crash were to move to London. That would mean an independent Scotland would only have its local banks to worry about.

But Ms Sturgeon will have been looking for more than protection from enemy fire. She will also have been looking for the positive economic case for independence. By comparing Scotland with a dozen other, better off small countries, the Commission suggests a key argument could be small is not just beautiful but bountiful too. However, with one exception, there are few arresting examples in the report of steps small countries have taken to make themselves prosperous. Proposals for a National Economic Strategy or a Productivity Commission hardly seem likely set the heather alight.

The one exception is a Come to Scotland campaign to welcome migrants. But while Scotland may be less concerned about immigration than voters in England, this could still prove a difficult prospect to sell. Also there is an acceptance that in its early years an independent Scotland would have to establish financial credibility by being prudent with public finances. That may be a realistic message, but that does not necessarily mean it will be a popular one.