By Tony O’ Reilly-
An independent Scotland would keep the pound and move to its own currency when the “time is right”.
The first minister said a timetable for creating a Scottish currency would not be set, but that the use of sterling would be as “short as practicable”. The UK Supreme Court, which heard two days of submissions last week, is considering if Holyrood has the legal powers to press ahead with a referendum without consent from the UK government.
A Scottish government paper has set out proposals for key issues including currency, trade and border crossings, but critics say it lacks ample detail. The Uk government has shown no interest in discussing Scotland’s vision for independence, and Liz Truss is on record for saying Sturgeon should be ignored. The Scottish first minister recently revealed that a message to prime minister, Liz Truss following her appointment as prime minister was not to responded to.
Sturfeon unveiled a prospectus for her vision at a media briefing in Edinburgh, where the first minister said it was “glaringly obvious” the UK could not offer Scotland the economic strength, stability or security the no campaign had promised before the 2014 independence referendum.
Unveiling a 108-page prospectus on independence and the economy, Sturgeon said if there was a second referendum and it was won by the yes campaign, Scotland would aspire to eventually setting up its own currency and joining the EU.
Sturgeon was unable to give reporters at the briefing a time frame on how long Scotland would need to use sterling, how long it might take to establish a new currency or how long it would be before Scotland joined the EU.
What is clear is that Scotland’s first minister hopes to stage a second independence referendum on 19 October next year. She acknowledged these were central questions but said they could only be answered once the process was under way.
The Scottish National party leader also confirmed that after independence Scotland would use sterling for as long as necessary, although it would have no say over interest rates or monetary policy. Those would be controlled by the Bank of England in London.
It was too early, she said, to know what Scotland’s debts and costs would be at independence; it would accept its fair share of the UK’s debt mountain but also receive a fair share of the UK’s assets, including about £12.5bn in cash reserves from the Bank of England. That would help fund a new Scottish central bank.
Prudent Approach To finances
Sturgeon said it was essential Scotland took a prudent approach to its finances as it moved towards setting up a new currency. She implied that could involve spending cuts, tax rises or extra borrowing to fund public services, in order to meet the EU’s fiscal sustainability policies.
She said Scotland would try to follow the EU’s growth and stability pact’s principles. That sets debt targets for the EU but is being reformed to cope with the economic impacts of the global disruption from Covid, the Ukraine war and inflation.
“Independence is not a miracle cure,” she said. “There are no guarantees of economic success for any country. For Scotland, like every other independent nation, our success will depend on the quality of the decisions we take. It will be hard work, but this paper sets out the reasons for believing that we can succeed.”
In the policy paper, A Stronger Economy with Independence, and during her briefing, Sturgeon confirmed that Scotland would not join the euro, even though some analysts believe the EU will require that pledge before it joins.
However, it would apply to become a member of the European Union.
She also confirmed that Oil and gas production would end “as soon as possible” but until it ended North Sea tax receipts would flow into a £20bn growth fund to promote low carbon industries, green homes and digital technologies.
included details on how an independent Scotland would apply to become a member of the European Union.
.At the Bute House briefing, Ms Sturgeon said a Scottish pound would be created after independence only “when the time is right”.
.The “Building a new Scotland” paper cuts the number of tests to three with no prediction on the length of time it would take to fulfil them. The first minister said it would not be “responsible” to give a firm commitment on a timetable.
In the prospectus, an independent Scottish central bank would be created, along with a debt management office and a significantly strengthened Scottish Fiscal Commission to replicate the work of the UK Office for Budget Responsibility.
Ms Sturgeon explains: “That means any talk of passports to visit relatives in England is utter nonsense. Free movement of people across our islands will continue as before.
“An independent Scotland will also be gaining free movement across 27 other countries.”
The prospectus says there would be physical border checks on goods on the two main trunk routes between England and Scotland, while similar measures at rail freight terminals would be likely.
Ms Sturgeon said: “None of this, none of this is insurmountable, but it does require proper planning.”
She went on to address the issue of an independent Scotland taking on UK debt.
The first minister explained that while there was no “legal” requirement to do so, Holyrood has a “moral” responsibility.
Fair Settlement On Debts And Assets
Ms Sturgeon told the press conference: “In light of that, and indeed our desire for a strong future partnership between Scottish and UK governments, we would seek a fair settlement on both debt and assets.”
She also said that an independent Scotland could realise its “vast renewable energy potential” and “kickstart the inclusive growth” via the proposed Building a New Scotland Fund, a pot of up to £20bn generated through oil industry revenues.
“Without independence, Scotland will face austerity, trade barriers and “narrowed horizons as a result of Brexit,” Ms Sturgeon said. “All of it exacerbated by increasingly dysfunctional Westminster decision-making.”
Scottish Conservative leader Douglas Ross said the paper “illustrates just how thin the economic case for independence is”.
He added: “The SNP are trying to sell Scotland a pig in a poke. It’s completely the wrong priority at the worst possible time for Scotland.
“Nicola Sturgeon should be using government resources to help struggling families instead of to push for another divisive and unwanted referendum.”
Scottish Labour called on the SNP to be honest about its proposals. Itsfinance spokesman Daniel Johnson said: “The SNP need to drop the spin and come clean with people about the catastrophic reality of their economic plans.
“Despite wasting 15 years in government peddling the same old agenda, they still can’t answer even the most basic questions.”‘They’re asking for a yes or no answer to really complex question’
Scottish Liberal Democrats leader Alex Cole-Hamilton branded the plan a “recipe for years of chaos”.
He accused Ms Sturgeon of making “the same pie-in-the-sky promises as the Brexiteers, threatening to cut Scotland off from its biggest trading partner”.
“She refused to admit her proposals would leave Scotland outside both the UK and the EU for an untold number of years,” he added.
“Nor can she tell the public how Scotland would build up the necessary foreign currency reserves for her plans to ditch the pound.”
A UK government spokesman said: “People in Scotland want their governments to be focused on the issues that matter to them – growing our economy, ensuring our energy security, tackling the cost of living and supporting our friends in Ukraine against Russian aggression.
“This is simply not the time to be talking about another independence referendum.”
The spokesman added that Scotland benefited from being part of a wider union, through initiatives like the Covid furlough scheme or the energy support package which has limited bill increases this winter.
The paper is the third in a series, published as part of the Scottish government’s plans to hold a referendum on 19 October next year.
In June Ms Sturgeon unveiled what she called a “refreshed” case for independence and said her government had an “indisputable mandate” for a second referendum.