It seemed that I caused a bit of a stooshie in Scotland yesterday by suggesting that the SNP leadership were Tories who did not like the Union in a tweet that said:
Many have demanded an explanation, so I began to write a Twitter thread for those who want to know. However, it just grew and grew, and so I offer it here instead:
First, let's be clear that the Tweet I posted was very obviously about party leaderships, and not party memberships. Most Labour members are not Torylite for example, even if the leadership is. Nor are SNP members Tory. I know that.
But, party leaderships matter. And just as Labour have shown an extraordinary ability – except in the Corbyn years – to ignore its membership, so too does the current SNP leadership do that. It's important to appreciate I was saying that.
It's also important to appreciate that I am not a party politician. I am a political commentator, thinker and activist who describes the world I see and the changes I would like in it. But I am not a politician, or party loyal.
Some might call that a weakness, but I am not good at the loyalty that party membership seems to demand in current politics. My inclination is to adopt principled positions and argue for them. If that overlaps with others in parties great. But it does not mean I support parties.
If there are those who thought my principled support for Scottish independence meant I was pro-SNP I am sorry to say that is wrong. I have friends in the party. I am delighted to speak to it and have done, often. But as with other pro-independence parties I am a critical friend.
I happen to think the role of critical friend – willing to stand up and say ‘yes, but' is vital in politics. It is all too easy for parties to get carried away with their own agendas and miss the big picture that may be going wrong. This is what I think SNP supporters are doing.
The SNP is the most effective political party in the UK as a whole right now, and obviously so in Scotland. It is getting a lot of things right. It has achievements it can rightly be proud of within the limited role Holyrood is permitted. Nicola Sturgeon is a massive asset.
But – and there has to be a but – I did, of course, have reason for saying what I did. And that reason is that the SNP leadership is as shackled by the fear of appearing left of centre as Labour, or the LibDems.
Like those party leaderships the SNP leaders seem to think its credibility is dependent on saying one thing and then delivering policy that will keep financial markets happy. This is no new thing; it has been going on for some time.
What the SNP under Alex Salmond wanted to prove was that it was competent. The aim was to win trust so that it might govern. And, unfortunately, one of the tools for doing that was to say that it could balance the books.
This was why the Tory created Government Expenditure and Revenue Scotland statement survived under the SNP. For a long time GERS delivered for the SNP. It showed that the books could be balanced. If that was what being managerially competent meant, GERS delivered.
Until it didn't of course, which was in 2014, when questions about a future without oil left the plan for independence look vulnerable. Since then GERS has been a liability. Not only is it technically flawed, but the fact that it continues in use despite that is also a sign of misplaced faith.
GERS should be killed. It is sending out a message that there remains a belief in balanced budgets but that it is not being delivered and despite that nothing is being done to address the issue. That's really not good.
But the problem really does go deeper, because the question as to why this obvious mismanagement is still happening has to be asked. And the answer goes to the heart of the independence debate – and where the SNP is on it.
I take it as read that those who support rather than just vote for the SNP, want an independent Scotland. As someone who believes Scotland has a right to be a nation, as much as I think Ireland and Wales do too, I understand that. I read this as being what the SNP is all about.
And that's my problem, which motivated my comment. Wanting to be independent requires a credible plan to deliver an independent country. And this is what the SNP lacks. It has no apparent route to achieving this aim, politically, as internal disputes show.
Worse though, it has no coherent plan as to what to do if it was achieved. The closest we get to that is still the Sustainable Growth Commission report by Andrew Wilson MP. As far as we can tell this is still leadership policy.
I say ‘as far as we can tell' because a key component in this plan – that Scotland should use sterling after independence – was overthrown by the membership of the SNP in conference resolution in 2019, but the party leadership has ignored that and fights back against it.
And this is where the issue really is. The SNP leadership is pursuing a policy that would destroy the aspirations of the SNP's membership and leave Scotland a poor and even ruined country if independence were to happen, and all because it fears markets.
That plan is to use sterling – without England's consent – after independence. That is because they believe that the money markets would not value a Scottish currency and so lend to an independent Scotland if a new currency was to be launched.
They do however believe that those markets would lend to an independent Scotland, albeit at a higher rate than they would lend to England at, if it borrowed in sterling.
So, the first thing that the SNP leadership think they would do if they won independence would be to say that Scotland is not capable of having, or running, its own currency, and that it must remain dependent on England after all.
Politically that is disastrous. It indicates a lack of faith in Scotland. Why is the SNP doing that when the evidence is that lots of new small(ish) countries have launched new currencies without problem and that almost all countries actually do create their own money?
I am baffled as to why the SNP leadership believe that Scotland cannot do what so many others have done without the help and assistance of England. It seems to be that the excuse is that this is what Ireland did in 1922. And I can summarise how that went: it was a disaster.
Ireland suffered decades of poverty as a result of using the pound. None of the benefits of independence were delivered until this policy was finally abandoned. Scotland has to avoid that fate.
Let me explain why sterlingisation will deliver that disaster. There are quite a lot of reasons. I won't apologise for addressing them.
First, Scotland would have to borrow in sterling. But that means Scottish debt would have to be repaid in English pounds. And those pounds would have to be earned by selling to England to get the currency, which no Scottish bank could create, but which every bank in England can.
Scotland would be immediately in hock to English banks. And Scotland would be desperate for exports to make loan repayments. The efforts of Scottish people would not be used to improve life in Scotland. They would be used to repay the owners of Scottish debt in England.
And the interest rate paid would be higher than is paid on UK government debt now. So the amount of work the people of Scotland would have to do to service this debt owing in English pounds would increase.
Put simply, Scottish effort would be directed towards making the owners of its debt denominated in English pounds richer. And Scotland would be poorer as a result. Using sterling would be like having a new English tax on Scotland from which Scotland got no benefit, at all.
But it's worse than that. If the interest rate due on Scottish government debt was higher than in England so would other interest rates in Scotland be higher. And so the cost of living of those who have to borrow would go up.
And, of course, anyone borrowing would also be repaying in English pounds – meaning that they too would be helping the flood of wealth out of Scotland and into England. Is that what independence is for? The SNP leadership say it is.
It gets worse still though. As the Scottish intertest rate would not be set in Scotland – it would simply be the English interest rate plus a bit – the Scottish government would be unable to use interest rate changes to manage the Scottish economy. It would be rudderless.
And worse, again. If Scotland does not have its own currency it could not do what the UK government has done during the Covid crisis and create new money to tackle the crisis using quantitative easing – which is literally central bank money creation.
The UK government has done more than £400 billion of that over the last 18 months or so – and as a result none (I mean none) of the cost of that crisis need fall on taxpayers. But if Scotland had been independent and using sterling it could not have done QE.
If Scotland could not have used QE then the whole cost of the Covid crisis would have fallen on Scottish taxpayers. They would have had to repay debt due in sterling when no repayment of the new money created in the UK is ever going to be required.
This would have been calamitous for Scotland. But then there is another final problem from using sterling. This is the requirement that the Scottish Growth Commission says is necessary to build foreign exchange reserves before Scotland could ever consider have its own currency.
Andrew Wilson said that whilst using sterling Scotland would not have to just repay foreign debt to England – which he said would be owing on independence, about which I do not agree, at all - but it would also have to build up foreign currency reserves.
In other words, not only would Wilson have Scotland earn currency to repay old debt to England it does not owe, and to repay new debt it need not borrow from England – but he also says Scotland must also run a surplus on its foreign trade to earn yet more foreign currency.
In other words – Scottish people would on this occasion be working hard to earn foreign money but would see no gain from it – and nor would Scottish government services – all to build up a pile of foreign cash in the Scottish central bank.
Let's be clear what the consequence is. Standards of living in Scotland would fall. And Scottish government services would have to be cut to reduce borrowing to the greatest degree possible, because that is what is necessary to build those foreign exchange reserves.
And that double whammy on the wellbeing of people in Scotland would be all about creating reserves so that one day Scotland could move from sterling to have its own currency. But the key point is that even then Wilson and the SNP leadership do not believe in that currency.
Instead what they want to do is ‘peg' it value against another currency. In effect they'd say it had a fixed exchange rate with sterling or the euro. To maintain that peg would require lots of foreign reserves – because that is the price of a fixed exchange rate.
To keep an exchange rate fixed foreign reserves have to be owned to buy the Scottish currency in foreign exchange money markets to keep its value up if it fell. That will be what all the Scottish austerity would have been about. Nothing else. It would just be about money market game playing.
So, perhaps, at last you might say, I can begin to draw a conclusion. It is this. Because the SNP leadership believe that they cannot run a currency, and that the money markets are the actual people they will have to keep happy rather than the people of Scotland, they will not let Scotland have that currency.
And because they will not let Scotland have its own currency because they are so frightened of money markets they would rather impose austerity on Scotland and cut its standard of living and increase its interest rates and effectively impose a tax to repay foreign currency loans.
Incidentally, not having its own currency would also prevent Scotland from joining the EU, as it is pre-condition of membership that it has, but let's leave that aside.
So, I see nothing in the SNP leadership's plans that is compatible with a plan for independence that can deliver for the people of Scotland. Instead I see a plan that is going to harm Scotland, and frankly take it on the same path as Ireland had after it became independent.
The reality is that none of this is necessary. If the SNP leadership believed in itself, in Scotland and the role of government then as many (me included) have argued, Scotland could have its own currency within weeks of independence.
That currency should float on foreign exchanges. That is what the pound does now. There is no problem with it. Then no significant foreign exchange reserves are needed. That is one problem solved.
What is more, if only the Scottish government believed it could stand up to money markets – which is the key issue here – it could set its own interest rates, use QE, run deficits and fund them with borrowing in Scottish currency – and deliver wellbeing for Scotland as a result.
And what is more, Scotland could then deliver all those policies that the SNP members who got annoyed with me want. But – and I cannot stress this enough – the policies of the SNP leadership will never permit those to happen. And that is why I said it was neoliberal.
Neoliberalism is most identified by the belief that no one – including governments – can buck the rule of markets – and especially the money markets – who neoliberals say can hold governments to account and break them for not doing as they wish.
QE has proved that this is utterly untrue – as based on economic theory I had known for a long time. And so QE also proves that it is essential that Scotland has its own free-floating currency on independence. This is vital.
But right now the SNP leadership is in denial of this. It is still promoting a policy for Scotland that will subject its people to austerity for the sake of its fear of those markets.
If only the SNP leadership would instead learn modern monetary theory, take note of the lessons of QE, and free itself from the fear of markets it could deliver for Scotland and the SNP membership what the latter know Scotland needs.
But they won't do that. And so, as I was told very forcibly in the last week, people do not know what to believe about independence is all about and so still have reservations.
I have more than reservations: I think what the SNP leadership is proposing is deeply dangerous for Scotland and its people. And because I think this really matters I have had the courage to say so.
Please disagree with me by all means. Argue the facts and theory. Argue the implications. But I have set out my reasoning. The SNP leadership should set out theirs. If they think they can deliver for Scotland using the currency of another country they need to say why. I see no way that they can.
Worse, I think that it is neoliberalism – a failed political dogma – and its associated austerity that drives their thinking. And that is very far from left-wing – and justified the comment I made.
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It’s never an issue, or a problem, or a potential problem
It’s always a crisis.
In 3 years time.
It’s never hinted, implied or obvious
It’s always very obvious
Today.
Thank you for putting all that together, Richard.
To put this as simply and succinctly as I can…..THANK YOU
A very good article and I don’t know of any other country that has got independence is still using the £ Sterling, Rand,Aus Dollar,NZ Dollar to name a few,so as far as I am concerned we must have our own currency and it need not be called the pound.
I would like to hope that the SNP Government will take note of this article and reflect on it.
Thank you. Yesterday I thought you’d taken leave of your senses but, today, excellent
Great post. Would love more info and context on this:
“the evidence is that lots of new small(ish) countries have launched new currencies without problem”.
A future post perhaps?
It has been dine by others
Tim Rideout has covered this I think
Please shoot this down.
English banks are allowed to print English pounds and use them to make loans.
Many, maybe most, of these loans serve no useful purpose but simply create asset bubbles or facilitate legal theft
Could the Scottish Government sponsor a normal English-type bank tomorrow?
The Scottish Government may not have the freedom to print pounds, but surely today a Scottish bank would have the same freedom as an English bank?
Since Westminster pays almost no attention to what English banks do with the the money they create, would they treat a Scottish bank differently?
Holyrood does not have that devolved power
But banks do! Use a bank to achieve what Holyrood is not allowed to do.
Michael G says:
November 7 2021 at 4:33 pm
But banks do! Use a bank to achieve what Holyrood is not allowed to do.
Michael,
To be granted a banking license by BoE you need to deposit billions of £ in an account at the BoE. Scottish government does not have that money and neither do any of the Scottish banks.
David F @ 5:38.
So where did David Fishwick get his billions?
https://www.burnleysavingsandloans.co.uk/
It is not a bank
It is a savings institution
Very different
I do support Nicola and the SNP.
I completely agree with you about the need for a Scottish currency but let me ask you about the dangers of hostile currency speculators.
Is there a risk that investors could pump and dump the new currency making millions at the expense of those who regularly use the currency in a normal (ie non-speculative) way?
No
If the currency floats they have no one to trade against
If it is fixed or pegged they can fleece Scotland fir all it has
This is why the Wilson plan is so bizarre
I think I see.
If they try to damage Scotland by buying Scottish Pounds it doesn’t work because we can just print more.
And if they try to damage Scotland by selling Scottish Pounds well they had to buy them in the first place so it cancels out.
But if it’s pegged a situation could arise where we’re committed to paying one British pound for every Scottish pound which would hurt us if the Scottish pound was worth less.
(Sorry if I’m being slow, Richard!)
Float and they have no one to trade against, only willing parties to deal with
Fix and the government has said it will defend the rate – so they do have someone to profit from, because the government says it will put money into defending the value. When the market wons – and in this case it usually does – the traders have won
So the easy answer is do not fix
Then a country does not need reserves in. the way Denmark does
Thanks Richard.
Speculators are just that, though; they’ll buy and sell if they can turn a profit Do you remember the launch of the Euro? It was valued at around 80 pence on its launch; as the gamblers gambled its price yo-yo-ed and politicians here scoffed at its instability – and then it settled down to – funnily enough – around 80 pence.
My point is really that if the preparatory work is done properly, then a standalone currency will be fine.
That is exactly what would happen
There is an enormous amount of groundwork that MUST be done before independence. None, including currency decisions is being done.
Independence is the now in the same place as Brexit. Get “it” done, and worry about what “it” is when we have it. If we can’t have it, we’ll blame the Tories, keep collecting our generous wedge, and sing the occasional patriotic song.
I agree – Common Weal is the best place for this
The SNP leader probably does not know or less probably ignores the money creation process.
The vast majority do not know how money is created. That’s why Positive Money realised their role is to educate politicians, commentators and the people by training speakers to go out and speak.
Catching the young at university economics societies and the more mature at Rotary meetings would be a good start as they’re always looking for speakers.
Getting the message (truth) out is the constant battle for money reformers because it’s halted by Establishment inertia.
Very,Very Many Thanks Richard for your succinct and essential explanation of the state of Scotland.
Keep up the Good Work
Thanks
I thought I owed this one
Having watched events unfold in Scotland over recent years, my only conclusion is that Scottish politics is as infected with professional politicians as England is; politicians who’s loyalties or own personal interests do not lie with those who support and elect them.
It is one thing to stand up and articulate a particular policy position, but it is something totally different to do so with no intention of trying to realize that position even as those policies command popular or majority support.
The decline in working class support for the Labour Party bears this out. I can foresee a similar process overcoming the SNP as it’s leadership continues to disappoint that party’s supporters. The goal of Scottish independence will be realised through another party created for the purpose.
An advantage of being in the Euro is that you get a ‘seat at the table’.
You get a say in someone on the MPC of the European Central Bank. This is the essence of shared sovereignty, that you get a say in the rules that other countries live under in return for them getting a say in yours. At a higher level that is one of the reasons you endorse membership of the EU presumably.
Personally I’d like to see an independent Scotland but one which runs with Sterling for a while and as part of the post referendum negotiations gets 1-2 automatic seats on the BoE MPC. Then Scots get a greater share in proportion to their population as to what interest rates are and what direction QE takes.
Only someone who is opposed to operationally independent central banks would oppose this, but not having an independent central bank rules out EU membership in the first place.
So I can’t figure out where you’re coming from at all I’m afraid.
I do not endorse operationally independent central banks
First, they are not independent
Second, they undermine democracy
Third, there is no evidence they work
Fourth the assumption they work is pure neoliberal – an agency can do what government cannot – which is not true
And of course you can set up the charade of such a bank and join the EU – they all are charades and everyone knows this
But I want QE for Scotland alone
Another excellent article Richard, thank you.
I despair of the mule headed SNP leadership.
Will we wait on the Tumbleweed…or by miracle receive a measured response to these very pertinent questions.
Couldn’t agree more.
I cannot understand why a government would desire independence to free itself from its larger neighbour and then continue using GBP and be hamstrung to B of E monetary decisions.
Me neither
In the 1960s, the Wilson govt was forever running scared of the Gnomes of Zurich (as Private Eye spoofed currency speculators). Then the UK govt devalued. But I suppose they were still running scared, just at another pegged rate? Or was the underlying problem that UK still owed USA for war debts?
We were still on the gold standard, in effect. They had to be spooked by the reserves issue. When we floated that ended, for good.
The SNP will need to win a referendum first, and if it did not propose their own Scottish currency and voters read your article the SNP will surely lose as they did in 2014.
I will speak truth, come what May
You may be right about my article
The leadership may need to decide then
That is what I would wish they do
The SNP will never win another referendum under the current leadership because they have pegged themselves to the ‘gold standard’ of an S30 being agreed by London, and London are unlikely to agree to opening the cage door to let the golden goose out.
But a referendum is not the only route to dissolving an International Treaty, Thatcher herself said that a majority of independence MPs simply needed to walk out of the HoC’s (or something like that – I’m sure someone will correct me!) and the treaty would be dissolved.
I agree with you on this
There was no Scottish parliament when Thatcher said this and times were different. The only route to independence is thru the Scottish parliament and a single question referendum. Nothing else would command international recognition nor likely be acceptable to the Scottish people either.
Really chuffed to see a broadly positive response to this post.
To the naysayers however………………….
It’s all about sovereignty and the best way in my view for a country to begin talking in truly sovereign terms is to have its own currency within its borders, it’s value driven by circulating it with a decent spend and taxation programme that only accepts the currency that the Government prints.
In this case, not the dollar, English pound or Euro but the Scottish poond! Or whatever you want to call it.
Sovereignty is not just borders, or laws or land; it’s the ability to print your own currency.
More prosaically, money is power. How an earth the SNP thinks that power through just being independent (a mere political process and structure) is enough to get by I just don’t know. Money talks and will pay for those borders, lands and laws to be effective and sustainable.
We often think of the UK as a small island punching above its weight for some time. A lot of that power or ability to be relevant on the world stage has come through the printing of the UK’s own currency. When you think about how small we are, its incredible that at one stage we seemed to be everywhere.
A lot of that was through being able to print money and levy taxes on the money printed. I’m not proud of all the effects that that power had, but you cannot argue with it what it produced.
The other thing is that I see so much petty racism in contemporary English establishment and society by the English towards Scots, Irishmen and the Welsh to the point where you have to ask the SNP ‘Do you really trust a bunch of English racists to give you a fair deal with a Scottish pound pegged to the English one?’.
I wouldn’t – I’ve seen these people up close and personal and if you think Scotland will get a fair deal on that basis then you must be living in la-la land.
Thanks
Part may appear in a blog, soon
You wrote: “the SNP leadership believe that they cannot run a currency”. In effect, you were saying: “the SNP leadership believe that they cannot run the economy of an independent country”.
Perhaps Scottish independence is not the right way forwards at this point in time.
Wrong
It is the right way forward, undoubtedly
They just need to stop fearing bankers
The fight is a simple one, as ever: people versus the agents of capital
An independent Scotland MUST, have an independent currency. If we run with the £ sterling, which will probably plummet in value after indy as England will have lost probably it biggest asset, we will be hit by the same downturn.
I am convinced now, having listened for years to the snp and their economic ‘plans’, ignoring their membership, that they adopt these policies with one aim.
They are intent on placing as many burdens in the path of independence to suppress it. They have become a colonial authority charged with perpetuating a dogma suited to the colonial power. England.
Nothing else other than cowardice explains their behaviour. They have no intention of pursuing independence.
OK – you didn not justify your calling SNP “Tories who don’t like the Union”. And you are clearly wrong saying “Incidentally, not having its own currency would also prevent Scotland from joining the EU, as it is pre-condition of membership that it has, but let’s leave that aside.”
Leaving that aside. If I am feartie about Independence as I am unsure what the impact would be immediatly on my finances, pension, shopping etc. I ask on referendum day – what will the money in my pocket be worth under a Scottish currency? What will you answer? It’s a big question that will be on many lips and obviously all over the hostile media.
It will be worth what it is now, plus or minus a bit – which is all I can also say of the pound you now use
Quite simply, it is not possible to ever tell the value of a currency precisely
But my honest answer is it will be worth very closely what it is at present
I understand you to be saying that an independent Scotland with sterlingisation (or even a pegged Scottish currency) would be significantly worse for Scotland and the Scottish people than remaining within the union. Have I got this right?
Yes
And that is worrying because it is what the Growth Commission proposed and the leadership seem to think this
Fantastic post. You lay out very clearly the issues with either using another country’s currency or having a fixed exchange rate with it. Your posts seem to be getting clearer and more readable. Or maybe I just know more now than when I started reading them! In any case, keep up the good work!
I have been reading around about this issue and to may surprise no less than 16 countries and territories use U.S. dollars instead of a unique local currency. Most are small Caribbean islands with economies that are dependent on American tourists and the argument for keeping the USD seems to be that it would hurt their tourist industry if Americans had to go to the trouble of changing their money into the local currency. I am dubious that this is actually true but while the tourists keep coming they have a ready source of dollars so the arrangement might seem to their benefit but I can’t help wondering how they have been coping with the pandemic.
Ecuador, Panama and Somalia are also on the list. I can’t, for the life of me, see any way they benefit from the arrangement.
Panama did to launder dollars
There is no way Scotland could gain
Panama runs two currencies. It has its own, the Balboa, with coins only + the US Dollar. Panama doesn’t have a central bank.
I believe the above was all summarised by Mayer Amschel Rothschild in 1790: “Permit me to issue and control the money of a nation, and I care not who makes its laws”
As long as the money is controlled by English banks, Scotland will remain controlled by England.
Even as an SNP member, I agree that the current leadership has a severe lack of both courage and imagination.
Hmmm. I think we have two issues here.
The first issue is about Scotland establishing its own currency ASAP after independence is won. I absolutely agree with you. For all the reasons you have been putting forth for so long.
However, the second issue is actually winning the vote for independence before this can happen. Unless the roughly 50% of Scottish voters who still vote Labour, Lib Dem and Tories are doing so because they think the SNP hasn’t been radical enough, there is something else to consider.
It’s like that old story about belling the cat. A group of mice think (correctly) that their lives would be a better if the cat had bells on its collar. BUT …how are they going to GET bells on that collar? Walk up to Mr Cat and say, hey, we’re going to put bells on your collar? It’s a bit of a jump between knowing what outcome is best and actually bringing it about.
I’m also a bit puzzled by this statement you made:
“So, the first thing that the SNP leadership think they would do if they won independence would be to say that Scotland is not capable of having, or running, its own currency, and that it must remain dependent on England after all.”
Where are you getting this from? I’m not seeing this. Instead, what I’m seeing, is the SNP NOT trumpeting their specific plans (which are still being formulated) to the public at this stage—around a year and a half before the actual referendum is due to take place, and before public campaigning has actually begun.
If, during the campaign or—horrors—after winning the referendum, the SNP actually takes a pro-Sterling stance ‘because Scotland is too weak to have its own currency,’ then I will eat my hat, and admit I got it totally wrong. But I suspect that’s not going to be the case.
Surely you have noticed what the mainstream media does with ANYTHING the SNP proposes. There are still a huge number of people in Scotland who read, watch and believe the nonsense that comes out of this media. The issue of how to govern an independent Scotland is one thing. But how to WIN that independence is another. There are still a lot of people out there who prefer the devil they know—no matter how bad that devil is—and are easily frightened away from making any changes. Unfortunately, the MSM knows this very well, to our cost, and uses this approach to keep voters from changing their allegiances.
While your ideas about how a country’s finances should be run are certainly spot-on—in my estimation—you haven’t had a lot of success to date in getting the UK ship of state to turn around to your way of thinking either, have you? Getting people to think differently isn’t easy, and isn’t achieved overnight. Especially when the different thinking is portrayed by the opposition as silly, crazy, or dangerous.
It’s one thing to be right about currency issues. It’s another thing to sell that new perspective to the public and get them to change how they’ve always voted.
The SNP are playing a long game here. Not PREMATURELY revealing their supposed ‘plans’ or options is one way to win at the long game. Common Weal is an excellent organisation that generates many very useful ideas and has input from experts like yourself who know how complex systems work. Their ideas and energy will be incredibly useful in the months and years to come, as an independent Scotland gets going. But their ideas of how to convert entrenched No voters to Yes are still a bit hazy, IMO. Their big plan seems to revolve around making the SNP look Baaaad.
It’s easy to get impatient, but the fault of the mess we’re in right now is NOT the fault of the current SNP government. It’s the fault of those who voted No in 2014. A good number of those did so because they were genuinely scared of losing the status quo and would actually LOSE the ‘pound’—as Alistair Darling threatened—not because the proposals for currency weren’t radical enough. These are the fears the Better Together campaign pulled out of the hat in 2014. Make no mistake, they will do so again.
Winning the hearts and minds of former No voters is tricky—as the MSM is only too ready to play on fear. I think the SNP leadership is laying the groundwork for the campaign very well indeed—as much by what they’re NOT saying yet as what they ARE saying. The MSM is desperate to begin this fight. The SNP are determined the fight will be on their timetable and their chosen ground. Let’s not assume that because the SNP haven’t revealed a radical new agenda to the public yet—giving MSM a year and a half to shoot it down—that they aren’t working on one or intending to implement one when the time comes. They’re not stupid.
I read all that but then note that the leadership has revealed its hand – in the Growth Commission report that is such a hostage to fortune. They have said they will deliver austerity and poverty to appease bankers. That us the problem, I think. So on this occasion I think I have to disagree with you.
Well said Janet.
I still can’t see any explanation about how the SNP is apparently akin to the Tory party Richard, cannot fathom that one, but thank you for the explanation about currency issue, interesting indeed.
The leadership of the SNP are not stupid and of course it’s the collective expertise in the Scottish government that will be working behind the scenes to
steer Scotland to ensuring independence is secured. I hope!
Currency is scary for people, any new currency posed by the SNP will be laughed at in the 100% anti SNP media, ha ha ha, with your pretendy money lol! How do we quell those fears with the British states’ propaganda being deployed on a daily basis against Scotland?
The English government have Scotland stitched up in so many ways and on so many levels, it’s going to take some very clever and timely manouvering to instill confidence in the soft no voters to take the plunge. Perhaps your advice and expertise will be taken note of. Meanwhile, perhaps the SNP and leadership, deserve a little credit for managing the country very well so far, against massive odds, with ever more limited powers, and squeezed fiscally. With100% media manipulation to attempt to thwart the independence idea becoming a reality, it really is an uphill battle, mountainous in fact.
Scotland’s self esteem was diminished, no, removed in fact over centuries, too poor, too stupid, too small, for a very long time, and now it’s a balancing act to build confidence but inform people of the facts without scaring them into better the devil you know, staying with the dreadful, backward looking insular soon to be isolated so called UK.
Scotland has been stolen from to the tune of trillions of pounds, while being told its too poor. Scotland needs confidence now to find it’s own feet, if your analysis and expertise can be utilised to achieve the goal of independence much needed for Scotland, that would be a huge benefit. Hopefully the excellent Kate Forbes, finance minister, also has the measure of things.
Scotland needs people to be confident in what can and should and must be done to secure independence, any help to do that Richard is I am sure most welcome. Confidence in a new currency won’t be easy, (sounds great to me!), it’s how it’s put to the voters though, and needs some clever thinking on how to frame the narrative. Thanks.
Over to you. 🙂
You would have thought the SNP leadership would want to create a vision of an Independent Scotland , with its own currency, an ability to borrow or create money, and commit to a Green New Deal. The alternative they offer is a muddle which like last time will unravel in the heat of a referendum campaign as others, who aren’t critical friends, will certainly raise the arguments you have made.
The leadership has to answer the questions now….
[…] my follow up post on the blog has enjoyed quite a reaction too. As one commentator, named Geoff Hobson […]
Hi Richard,
I think it would be beneficial if you pointed out that commercial Banks (Scots, English, or any nationality) do not print money. They create Debt. There is a very big difference.
Agreed
Not mine but ‘Kilts’ for the new currency
The SNP is in a slightly precarious position as they need the Greens to prop them up for a majority in the Scottish Parliament. So if the SNP drift further to the right they risk losing Green support. Also Scottish Labour under their new leader who seems to be a bit more radical, or at least likeable, the SNP may lose a couple of seats to them which will mean the SNP are in real trouble.
Agreed. And Scotland will be in desperate trouble if that does happen. We can all see how things have deteriorated since a no vote in 2014.
However the SNP will need to do something radical to maintain their lead. The only thing left by then that could save them (IMO) is to make the next election a plebiscite on Independence. They will have to ditch their gold standards and their economic plans and perhaps a great many wearing comfy slippers down in wastemonster. many of whom walked out of parliament when K MacAskill made a very revealing speech about the ferries fiasco.
If I were teaching a course on modern money theory and wanted students to understand the importance of the concept of monetary sovereignty, I would simply assign this post.
As a U.S. person, my attention was drawn to this paragraph:
“But, party leaderships matter. And just as Labour have shown an extraordinary ability – except in the Corbyn years – to ignore its membership, so too does the current SNP leadership do that. It’s important to appreciate I was saying that.”
That got me thinking about the comparable situation in the United States. Does the Democratic party have “an extraordinary ability … to ignore its membership” in the way that Labour and SNP have with respect to theirs?
Well, as far as I can tell, neither the Democrats nor the Republicans have a concept of party ‘membership’ close to that of U.K. parties. Most people register in a particular party for the purpose of being able to vote in that party’s primary elections. Do that and you end up getting lots of mail from the consultants for particular primary candidates, but that doesn’t entail any concept of ‘membership’ in a local party club or organization. You don’t get any say in internal party decision-making.
Given that the U.S. parties often seem like nothing but networks of consultants promoting particular brands, perhaps we would say: “Party leaderships matter — and the Democratic party has shown an extraordinary ability to ignore its customers.”
Thanks
Many thanks for the article Richard. It has provided much needed clarification of the pros and cons of currency. And what happens if you make the wrong decisions on it.
As a ‘No’ 2014 voter who is firmly now wanting to vote ‘Yes’ I find this a very interesting read. I think an independent Scotland could be a wonderful small European State but I’ve so, so many questions about independence, the process, getting a proper prospectus out so that we don’t have a “Get Independence Done” debacle, etc., etc. So just a couple of questions please:
At the risk of asking you to do what Johnson did with his Brexit pros and cons, what are the practical downsides of a Scottish currency?
and
To what extent will having a different currency to our largest trading neighbour impact on trade between the two of us?
I hope to address these issues in my column in The National tomorrow
Great post. This would be a great article for publication in the National. I have my doubts that they would print it though, as they do not do criticism of the SNP.
If it does not get in I have a column to write for Thursday
Apologies for being “late to the party”. I think this may be the most important blog post on Scottish Independence that you have written so far Richard. Many thanks for taking the time and trouble to write it. My hope is that by showing how disastrous the adoption of sterling as a post-independence currency would be, enough people will persuaded that a sovereign fiat currency for Scotland must be a sine qua non for the pre-referendum/plebiscite campaign. To that end I urge all pro-independence readers to share this blog as widely as possible to show what is possible and what must be avoided. It’s important that this is done now before the SNP on-line Conference later this month so that Dr Tim Rideout’s amendment relating to currency and a central reserve bank is adopted as party policy despite the leadership being so wedded to the Growth Commission’s proposals. It would do no harm to send the link to your MSP and the SNP’s leaders to broaden their awareness.
It was lack of understanding and sensible planning of the currency/economic issues which lost the 2014 referendum and it would be ludicrous (and probably terminal) if that were to be repeated. While I want to live to see an independent Scotland, I don’t want my children and grand-children to have to live in an economic basket-case.
Many thanks Ken