SNP embarrassed after ‘hugely vulnerable’ currency flaw highlighted in IndyRef2 plans
John Swinney: Scotland to have more powers with own currency
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John Swinney was grilled during his appearance on the Today Programme after host Justin Webb wanted the SNP deputy leader to lay out his party’s plans for Scotland’s currency. Mr Swinney stated Scotland would keep using the Pound Sterling before moving onto the Euro over a period of several years after gaining independence. But Mr Webb found a key flaw in the plan, namely Scotland would not have access to financial measures like printing money during the interim period between the Pound Sterling and Scotland’s next currency making the country “hugely vulnerable” in another crisis.
Speaking on Radio 4, Mr Swinney discussed the issues of Scottish currency if independence was gained.
Analysts have laid out three viable options for Scotland’s currency which involve keeping the Pound Sterling, making a new currency, or joining the Euro.
Keeping the Pound Sterling would mean the Scottish Government has no say over borrowing rates which would be down to the Bank of England meaning Scotland would essentially be at the mercy of England.
Creating a new currency may cause disruptions to contracts, mortgages, and other financial agreements which are all signed in Sterling.
It is also feared the currency would be much weaker than the Pound.
Joining the Euro has its own problems of implementing it locally and fitting it around the Scottish economy due to its vast nature.
Joining the Euro also requires “maintaining a stable exchange rate of its currency” which would require a central bank and a new Scottish currency anyway.
The SNP appear to be pushing to keep the Pound Sterling before seeking to adopt the Euro.
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Mr Swinney was asked for the SNP’s policy on currency and explained Scotland would keep the Pound during an interim period.
Only once several “tests” were passed would they push to create a Scottish currency which would occur over several years.
Host Mr Webb was concerned some safeguards/measures would not be available for Scotland in the interim period like quantitative easing because Scotland could not print off the Pound.
Mr Swinney explained: “Not in that interim situation because you will obviously be operating in a framework which was determined by decisions within the Bank of England…
“[Being independent] we would then have a whole range of other powers available to us that would enable us to tackle the situation like the ability to borrow.
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“Like the ability to take macro-economic decisions that we currently don’t have the ability to take because those are all out of scope.
“They are all reserved by the United Kingdom Government, we don’t have any of those decision-making processes.”
He concluded by stating the SNP have repeatedly demanded economic flexibility during the pandemic to allow Scotland to address the financial issues they face.
CEO of Scottish Business UK Struan Stevenson told Express.co.uk that his members were worried about Scotland going through three different currencies over a few years.
He explained many business owners wanted safety and stability after the pandemic and said many were considering moving several miles south to be in England so they do not have to worry about the currency consequences.
First Minister Nicola Sturgeon will close the SNP virtual conference on Monday with a rallying cry demanding Westminster and Boris Johnson gives Scotland a vote on independence.
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