I recently received an email at my SSP account asking me
to explain my views on the currency Scotland should adopt after Independence. I
replied to say that this is one of those occasions where the question asked was
admirably short but the answer could not be. Here’s the gist of my reply.
First I should point out that all four options raised so far assume the
maintenance of a wholly capitalist model of economics and finance for Scotland.
I’m in favour of an Independent socialist Scotland with complete democratic
control and accountability of all our own economic decisions. Nonetheless, and
since I would not want to appear to be ducking the question, I will outline my
own view of the options presented so far in this debate.
There are, as you know, four currency options an Independent Scotland might
consider after the 2014 Referendum and they are; either to keep the present
arrangement with the pound remaining Scotland's currency, to move to what is
termed a 'Sterling zone' where we share the pound with the rest of the UK but
have control over our own fiscal policy, adopt the Euro or introduce our own
All four options are complicated including leaving things as they are since
that would mean our Independent sovereign Government would be at the mercy of
decisions taken beyond our control by the Bank of England and the City of
London. And since, to a greater or lesser extent, all four options recognise
all countries in today’s globalised and interdependent world, where enormous
capital volumes are traded on a daily basis and moved in a millisecond, must
have effective controls with which to defend their economy and currency from
We must therefore approach this debate by asking what currency option gives
Scotland most control of our economy and best protects us from the predatory
instincts of financial speculators and hostile Governments. There have, after
all, been many instances in recent years where speculators have attempted to
undermine healthy economies and stable currencies for short term profit and
that remains a very real feature of the modern world.
Of the 4 options mentioned each has its drawbacks. It goes without saying that
keeping the Pound or establishing a 'Sterling Zone' means handing over a
considerable amount of power and control over Scotland's economy and spending
options to the Bank of England and the City of London. And many will inevitably
ask what then is the point of Independence? On the other hand joining the Euro,
as those who insist EU membership would compel us to do, means we would simply
replace the Bank of England's control over our economy with the European
Central Bank in Frankfurt. Given the terrible state of the ‘Eurozone’ and the
collapse of economies like Ireland, Greece, Portugal, Italy, Spain and Cyprus -
which all borrowed way beyond their ability to pay it back - this option would
be politically impossible to sell. And perhaps for that reason alone it is
probably the easiest to disregard at this stage.
So, on balance, after weighing up all the issues involved and recognising that
many other small Independent countries such as Norway, Switzerland and Iceland
prefer to use their own currency - because it gives them more control of
economic and financial decisions – this option seems to make most sense.
And I notice the ‘Greens’ agree. The SSP’s other partners in the 'Yes Scotland'
coalition however, the SNP, currently prefer the 'Sterling Zone' option. They
have it’s fair to say changed their mind on this issue often but their latest
view seems to me entirely in keeping with their softly, softly, and dare I say
conservative approach to selling Independence as a whole to those they believe
are frightened by the concept of change. The SNP argue, as I understand it,
that the transition to Independence should involve as little disruption as
possible to people's day to day experience. I suspect they may well advocate a
new Scottish currency being established in Scotland in due course.