DELEGATES at next month’s SNP conference could be asked to back plans to establish a Scottish Reserve Bank, to allow an independent Scotland to have its own currency “as soon as practicable”.
A draft motion by the Dalkeith and District SNP branch has been backed by the Scottish Currency Group and by a number of party members and parliamentarians. It calls on the party to draft a bill to “expedite implementation of this policy in anticipation of a vote for independence”.
That bill should, supporters say, legislate that a Scottish central bank be established, that the bank be named the Scottish Reserve Bank and that the bank be headquartered in Edinburgh.
READ MORE: Tim Rideout: Andrew Wilson is wrong on when indy Scotland should introduce own currency
It also says the bank should be wholly owned by the Scottish Treasury and have no share capital or external investors, with the president and directors “fully answerable and accountable to Parliament and ministers at all times”.
The motion also wants Holyrood and the Government to be responsible for instructing the bank “as to the monetary and other policies to be pursued”.
The Scottish Currency Group said that want to end “the neo-liberal fetish that central banks should somehow be exempt from democratic control and that bankers should be left in charge of the economy”.
It also calls on the bank to “be ready to introduce a Scottish currency as soon as practicable after independence”.
There’s been some debate over currency again recently, after Andrew Wilson claimed it could be a decade after independence before the creation of a Scottish pound. In an interview with the Herald on Sunday, the chairman of the SNP’s Growth Commission said he believed Scotland could be fully independent by 2026 after a referendum and negotiations during the next Holyrood term.
However, he warned that it could take between five to 10 years for the introduction of a Scottish pound and 25 years until the country “is as good as a society as somewhere like Denmark”.
At the SNP’s conference last year, members voted to replace the pound with a separate Scottish currency “as soon as practicable”
In their supporting statement for the Dalkeith motion, the Scottish Currency Group say that in order for that to happen, a central bank for Scotland “needs to be created and charged with introducing and then managing that currency”.
They add: “This motion instructs an SNP government to ensure that the necessary bill to establish the central bank is drafted and ready to introduce in parliament shortly after a successful vote in favour of independence.
“Even though it is generally expected that there will be a transition period of around two years before independence occurs, time will be of the essence.
“Taking a bill through all the stages at Holyrood can take six months or more, while time will also be required to recruit initial staff and get started on preparations for the new currency. It is therefore imperative to have the enabling legislation drafted in advance to avoid wasting valuable time after an independence vote.
“The motion also sets up the principles that should be adhered to. These include naming the central bank as the Scottish Reserve Bank.
READ MORE: We need our own currency in an independent Scotland
“This is a sensible name as central banks hold the reserves of the commercial banks and the state and many central banks around the world are named ‘Reserve’, for example South African Reserve Bank.
“While it is highly desirable that the new ministries should be spread out around Scotland (for example the Ministry of Energy might logically have an HQ in Aberdeen), Edinburgh is the centre of the finance industry and it would be the logical location for the central bank.”
The motion also calls on the new central bank to allow the three commercial banks in Scotland who currently issue their own bank notes to be able to do so.
The Scottish Currency Group said: “These are appreciated by citizens and visitors alike, provide a modest source of revenue to the banks concerned, and add to the uniqueness of Scotland.
“The motion provides that the government vis the central bank should ensure that these banks, and any others that wish to do so, should be allowed to continue to issue their own bank notes denominated in the new Scottish currency subject to the deposit of full collateral backing at the central bank and such regulations as the central bank requires to ensure their safety, security, etc.”
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