SNP ‘should start preparation work’ on post-independence Scottish currency

He also got himself in some hot water, so far had he strayed from the topic of the debate and was told off by the Deputy Speaker for ranting about independence when he should have been talking about the cost of living crisis.

The substance of his claim is worth investigating, however.

The SNP do have a policy on currency – and it’s different from the last go around the independence question.

In 2014, the SNP preferred the option of keeping sterling and entering into a currency union with England – where the Bank of England acting as the central bank, setting monetary policy and interest rates.

The then governor of the Bank of England, Mark Carney, said the idea would be “incompatible with sovereignty”, in recognition of the importance of a country being fully in control of its own currency.

But there was another option. It wasn’t in the white paper – which outlined the SNP’s vision for independence – but it was held by many, including the then-chair of Yes Scotland Dennis Canavan, the Scottish Greens and the Jimmy Reid Foundation. It was establishing a new, independent Scottish currency.

This is now the official policy of the SNP, after a vote at its conference in 2019. Against the wishes of party leader Nicola Sturgeon, members voted to move to a new currency “as soon as practicable”.

It was widely reported at the time, so it’s unusual for Ross to claim they do not have a policy.

There are, however, differing opinions about how long it would take to get set up and if it might lead to Scotland becoming a member of the Euro.

Dr Tim Rideout, the man behind the SNP’s move towards adopting a new currency as soon as possible, has been pushing this agenda within the party for five years.

Dr Tim Rideout (Image: Unknown)

He thinks it will take around four years to get an independent Scottish pound up and running. He is already in the planning stages of setting it up with his think tank the Scottish Currency Group. Among its members are Jon Egilsson, former chair of the supervisory board of the Central Bank of Iceland and Ian Stewart, a former senior banker with the Royal Bank of Scotland. Rideout estimates the cost of setting up the new currency as being around £50 million and envisages a Scottish central bank being staffed by around 800 people.

Scotland cannot use sterling for a long time, Rideout warned, and he is confident a short-term agreement could be achieved with the Bank of England.

“Using someone else’s currency just doesn’t work, there’s a good reason no country does that,” says Rideout.

“It’s economically illiterate. With the agreement of the Bank of England, we can use sterling for a couple of months but any longer than that you would risk a breakdown.”

In his camp is SNP MP Angus MacNeil, the chair of the Commons Trade Committee, who thinks Scotland should move as quickly as possible to a new currency.

He said: “This is not a big, complicated issue. It’s only if you’ve got limited knowledge or a tiny imagination that you’d be in any way worried about currency. Many currencies in Europe were set up much faster than what people envisage for the Scottish currency.

“We’re dilly-dallying already with independence, do we need to dilly-dally a further couple years before we get the economy performing.”

Two examples often used by those within the SNP advocating the new position are those of Slovakia and Estonia – both of which managed to set up currencies within about a year of those countries achieving independence.

Toni Giugliano, policy development convenor for the SNP, said: “Slovakia and Estonia demonstrate that small, independent nations can move to their own currency very swiftly.

“My vision would be for Scotland to adopt its own currency certainly within the first year of independence.

“Personally, I believe we should be preparing the groundwork in the transition period.”

Speed is of the essence in the minds of the independent currency adherents – planning needs to begin straight away and the move to a new Scottish pound must happen as soon as it is practical.

Kairin van Sweeden

Kairin van Sweeden, executive director of Modern Money Scotland and co-host of the Scotonomics podcast, is another advocate for preparing for the creation of a new Scottish currency as soon as it is possible to do so – even before Scotland officially leaves the UK.

The gap period leaves room for risk. But van Sweeden argues risks exist already and the Bank of England – which “doesn’t work for Scotland” – already means the country is “currency restricted” in how it can respond to periods of economic crisis.