“A devolved government will always act with one hand behind its back. On that hand there are several vital digits, the most important of which is currency.”
“Control of its own currency is a country’s most potent economic weapon. It allows government to control the money supply, interest rates and exchange rates, all of which can have a profound and relatively rapid impact on our economic growth and economic competitiveness. A country without its own currency is a country not only without a steering wheel, but also without brakes and an accelerator.”
So wrote Mike Russell, Scotland’s (SNP) Education Secretary, before he came to office. He’s probably right, of course. That’s the problem.
Alex Salmond’s own Special Adviser, on the other hand, said the SNP had “always recognised the benefits of Euro membership” in 2009. Mr Salmond himself put enough on record that even he cannot deny he was once in favour of euro membership.
In other words, the SNP has supported a separate Scottish currency (“a country’s most important weapon”), the benefits of Euro membership (which they just happened to mention at the time when Sterling was weakest against the Euro), and now, within a decade, they have moved on to a currency union with the rest of the UK.
Meanwhile, Jason O’Mahony wrote this, nominally with reference to Europe but actually with reference to just about anything. The currency argument shows, more than anything, that the SNP hasn’t quite gotten used to the idea that, in chess, the other side gets to move too. The SNP tends to forget that, if Scotland were independent, the remaining UK will be independent too. In such an event all the “benefits” of independence would apply to Scotland, but also to the remaining UK. What is more, as it is Scotland which would have opted to leave the UK unilaterally, it would have walked away from the “shared assets”.
That means the SNP can talk up the benefits of a post-independence “currency union” all it likes, but if the remaining UK opts not to have such a union, that’s that. The terms of any “independence” are not for Scotland alone, or even mainly, to decide. This has been demonstrated during the past week – and those voting in September are unlikely to forget it.
What is more alarming still is that the SNP has changed its position so frequently. Once it was Republican and for its own currency; then it was vague and for the Euro; now it is Monarchist and clearly pro-Sterling (to the extent not just of pegging a new currency to Sterling, but actually forming a Currency Union). It quoted Ireland and Iceland at their height and opposed Sterling at its lowest; now it forgets about Ireland and supports the rising Sterling. Every time it has simply swum with the tide rather than developing a long-term plan. Even the case for “independence” comes back in SNP PR to the “bedroom tax” – a highly short-term issue which in any case Northern Ireland will avoid even while remaining in the UK.
This was, of course, all before Mr Barroso suggested it would be “difficult if not impossible” for an independent Scotland to join the EU. I was astonished at his phrasing, and to be frank I simply don’t believe him; but it is yet another example of how “independence” means the independence of others as much as the independence of self. The SNP accuses others of talking up “uncertainty” – but that’s what a yes vote entails.
None of that is to say there isn’t a case for “independence” (I’m quite sure there is), merely that the SNP’s is ridiculously inconsistent, alarmingly short-term and frankly bizarre. Why not just offer a Scottish Republic with its own currency?!
“Better Together” will no doubt point out simply that if Scotland wants to exert influence on the Sterling Zone’s monetary policy and remove any “transaction costs” when trading with the rest of the UK, it would surely be better to, well, stay in the UK.
For all that, others argue this has nothing to do with the economy and everything to do with identity. Out of interest Mr Russell, Scotland’s Education Secretary, was born in England; and Michael Gove, effectively England’s Education Secretary, was born in Scotland.