We in the Scottish Currency Group invite anyone in the SNP and any MPs, MSPs, Branches and CAs that have not already done so, to support the following resolution for the October SNP Conference. This will have the effect of disposing of any reference to ‘Tests’ and will re-affirm the April 2019 view of Conference that we must complete the preparations and be ready to introduce our own currency as soon as practicable after Independence Day. It is simply a matter of fact that the exact date, how long a one-to-one period there should be, and how fast we transition to a floating currency will be decided by the post-Independence government (which might not be SNP, of course, as there is almost certain to be an election around Independence Day). As the supporting statement says, we have worded things as we have so that what is essential does get done: establishing the Scottish Reserve Bank (www.reservebank.scot), designing and printing bank notes, setting up the S£ payments network, etc) so that the post-Independence government is able to introduce the S£ and not end up in a Slovak style chaotic emergency currency introduction. The wording will, we hope, get the SNP Leadership on board and put an end to any further discussion of sterlingisation, or using the ‘just use the English pound for decades in the campaign. The SCG has absolutely not changed its view that ‘as soon as practicable’ means a few months, and we shall be continuing to make that clear, especially after the Indy Vote is won. We have no doubt that the macro-economic realities of actual Independence will ensure those future Ministers push the button to launch the new currency within those few months after Independence.
CURRENCY IN AN INDEPENDENT SCOTLAND
Conference notes that significant changes have occurred since the Sustainable Growth Commission report was prepared and resolutions on its currency proposals debated by Conference: specifically, Scotland’s exclusion from the European Single Market following Brexit; and the massive government spending response to stabilise the economy during the Covid pandemic, only available to states with their own currency.
Conference further notes that, while acknowledging the need for responsible economic management, there are compelling advantages to Scotland having its own currency after independence: in particular, giving the government of Scotland as much freedom as possible in formulating economic policy; avoiding any reliance on borrowing in a foreign currency; and applying to re-join the EU should that be the wish of the people of Scotland.
Conference believes that changing circumstances, and the clear advantages from Scotland issuing its own currency justify a further refinement of the Party’s policy on currency, so that a post-independence Government would be able to introduce a new Scottish currency as soon as practicable following formal independence.
Conference therefore calls on the Scottish Government to commit to taking all measures needed to permit the introduction of a Scottish currency, including the establishment of a Scottish Central Bank during the transition period between a Yes vote and formal independence; while leaving the timing and detailed implementation of a Scottish currency to the post-independence Government of Scotland.
We will be doing a public launch of ‘The Road to the Scottish Currency’ report in the next month or two. Glossy printed copies have already been provided to the MPs, MSPs, Ministers and senior civil servants. The public version will add another section with a Q&A that will answer all the common questions that have come up in the more than 50 talks we have done on the Scottish Currency. Such as ‘What happens to my mortgage?’
This resolution revisits Party policy on currency arrangements after independence. It endorses existing policy that Scotland should adopt a separate currency as soon as practicable after independence, while recognising that the post-independence Governments of Scotland will be in the best position to take decisions on policy implementation according to future circumstances.
The resolution therefore emphasises that post-independence Governments should have unconstrained discretion to take decisions both on the timing of the introduction of the new currency and on the exchange rate policy to be followed (including whether the currency should be ‘pegged’ to another currency for an initial period or allowed to ‘float’ on the foreign exchange market). This formulation reflects the conclusions of the Scottish Currency Group’s report ‘The Road to the Scottish Currency’ and can accommodate different views which have emerged within the independence movement.
To ensure that all options are available to the post-independence Government, a Scottish Central Bank should be established during the period between the independence referendum and the formal declaration of independence. This will give it maximum flexibility to decide when conditions are appropriate for the introduction of a new currency, taking account of the economic position at the time.
While the resolution notes that having a separate currency will enable an independent Scotland to apply to re-join the EU, it does not pre-empt decisions on European policy (including whether membership of EU or EFTA should be pursued).
This is going to be a important topic in the period ahead. It is crucial the SNP get this right. The sooner it is widely understood that Scotland, in line with many other countries, plan to operate our own currency the much more difficult it becomes to conflate this issue as happened in 2014. Unionists will have the much more difficult task of explaining why a rich nation like Scotland cannot achieve what numerous other countries, with far fewer resources have been able to achieve with some ease. The debate becomes why not, rather than us seeking to convince people that some unwanted deal with England is the better option.
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