A THINK tank has given its two cents on the content of the Growth Report by critiquing the currency option the document laid out.

The Common Weal said that the to keep the pound sterling, what the thnk tanks calls “sterlingisation”, would leave Scotland beholden to UK financial markets and with no control over interest rates.

It adds that Scotland would have no ability to directly create money or set targets on metrics such as inflation or balance of trade.

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This means that financial markets would be set a premium on Scottish Government borrowing with the knowledge that an independent Scottish Government would not have the same levers to finance its debt as other countries with their own currency.

This would act to severely discipline the Scottish Finance Minister so that they may always have to put banks interests ahead of the people’s.

Sterlingisation outside of a formal currency union also means that the Bank of England would be under no obligation consider the effect of its decisions on Scotland’s economy.

However, Common Weal argues that with an independent Scotland having a potentially different relationship to Europe than to England and Wales, a currency union is also not desirable. 

The think tank adds that the report's "six key tests" for setting up a new currency actually hinder the ability of the Scottish Parliament to set up a separate one in future.

Contrary to unofficial accounts from members of the commission in interviews, the Growth Report offers no timeline to the transition to a Scottish currency.

Common Weal recently completed their own blueprint for Scottish independence, How to Start a New Country, and proposed a three-year transition period between a referendum and independence, while mapping out the process for setting up a Central Bank, currency and the other essential institutions.

Initially pegged to the pound, an independent Scottish currency would be able to adapt quickly to a change in economic circumstances such as a positive divergence from the UK’s economy, offering the vital flexibility that sterlingisation would lack.

Common Weal adds that with the UK’s economy overly dependent on London's volatile financial sector, it is in Scotland’s interests to build a sustainable economy which sterlingisation would make much more difficult.

The purpose of Common Weal’s report is to specifically critique the report produced by the Growth Commission it is done so in the spirit of the principle laid out by the First Minister on the latter’s publication. Common Weal's alternative blueprint for setting up an independent Scotland can be read for free by following this link