John Swinney today outlined his plans for a Scottish Central Bank, a new currency and rejoining the EU as key elements in an independent nation.
The Bank of England would, for an initial period, continue to be Scotland’s “lender of last resort”, able to bail out the financial system in the event a meltdown, and Scotland would be tied to the British pound until a Scottish currency was introduced.
It means an independent Scottish state would remain reliant on the UK central bank controlling Scotland’s monetary policy for an undefined period, and willing to underpin the Scottish economy if it got into difficulty.
Setting out his proposals in a new paper, the First Minister benchmarked Scotland against 10 countries – Austria, Belgium, Denmark, Finland, Iceland, Ireland, the Netherlands, Norway, Sweden and Switzerland – and said all are healthier and have a higher life expectancy.
“If other similar countries can do better than the UK, an independent Scotland could too,” said, claiming that the UK economy is too centred on London and the South East, and efforts to reduce regional inequalities have failed.
He said living standards are stagnant: the poorest people in the UK are much worse off than in Germany and France.
UK energy prices are amongst the highest in Europe, despite Scotland’s rich energy resources, he said, and Brexit is “damaging an already underperforming UK economy, creating barriers to trade and increasing food costs”.
He pointed to research from the Resolution Foundation which said the UK’s weak economy leaves typical households £8,300 per year worse off than comparable countries.
“Using the same analysis for countries that are comparable to Scotland, the difference for Scottish households is even greater: £10,200,” said Mr Swinney. “Those countries demonstrate what can be achieved with the powers of independence.
“Although growth will not change overnight, the Scottish Government believes that Scotland has clear catch-up potential.”
His blueprint is set out in A Fresh Start with Independence which will be seen as a crucial part of the SNP’s armoury going into next year’s elections which nationalists regard as a quasi-referendum on the constitution.
However, it does not tackle crucial issues, such as the fiscal position of an independent Scotland and how it would deal with a massive deficit.
The proposals put the country’s natural resources and energy assets at the heart of its economic case, along with the strength of its academic institutions and the emergence of a technology base.
Yesterday he highlighted these features at a gathering of international investors in Edinburgh. He invited them to be part of Scotland’s journey “toward a thriving, sustainable economy built on innovation, resilience, and inclusive growth”.
Today he said: “The Scottish Government works tirelessly to use the powers of devolution to deliver the very best for Scotland.
“Much good has been achieved through the expansion of early learning and childcare, the introduction of free university tuition, the expansion of the rail network, the introduction of Minimum Unit Pricing of alcohol, the creation of the Scottish Child Payment and many other measures.
“But Scotland needs to be able to improve the opportunities available to our people, our communities and our businesses. Scotland needs to build a stronger, more inclusive economy that works for all. Those possibilities would only be available to Scotland with the fresh start of independence.
“We have shown that when we have the power to decide for ourselves, we find solutions and make choices that best serve Scotland’s interests. I believe Scotland can and will become a successful independent country, with a more dynamic economy and a fairer society.”
Scottish Labour finance spokesman Michael Marra said: “John Swinney should be embarrassed at these baseless claims which are entirely detached from reality.
“The Scottish Government’s own GERS statistics demonstrate that Scotland would lose £14 billion on day one of independence.
“Frankly, these tired claims are an embarrassment which leave the SNP Government’s credibility in tatters. It’s little wonder that our public finances are in crisis with the independent Scottish Fiscal Commission projecting a deficit of £4.7 billion. The SNP cannot be trusted with Scots’ money.”
Scottish Conservative deputy leader Rachael Hamilton said: “John Swinney’s launch of yet another fantasy paper on the SNP’s independence obsession shows how out of touch he is with ordinary Scots.
“On his watch, Scotland’s NHS is on life support, school discipline has collapsed, our roads are crumbling and household bills are soaring, yet his priority is breaking up the UK.
“Our message is simple: move on John. Independence would make Scotland poorer and everyone would suffer the consequences of the SNP’s economic sabotage.”
The proposals for an independent Scotland
- decision making – a Scottish nation state would put the power to decide Scotland’s future in Scotland’s hands, with decisions made by governments the people of Scotland have voted for
- new partnerships – an independent Scotland, the UK and the EU would be able to forge new relationships, based on equality and mutual respect, that would bring social and economic benefits
- a protected NHS – Scotland’s NHS would be protected and strengthened through its inclusion in our interim constitution, giving people a guaranteed right to access a system of health care, free at the point of need
- rejoining the EU – Scotland would be able to apply to rejoin the EU, giving Scottish businesses access to the world’s largest single market, seven times the size of the UK, enabling the people of Scotland to reclaim their rights to live, work, study and travel throughout the EU
- building a new economy to boost living standards – independence would allow future Scottish Governments to take action directly to improve living standards, using the full powers of a nation state. Independent European nation states comparable to Scotland tend to be happier, wealthier and fairer than the UK
- a new Central Bank and a transition to a new currency – an independent Scotland would have its own independent Scottish Central Bank to oversee economic conditions in Scotland, with responsibility for financial stability. The Scottish Central Bank, drawing on independent advice and working with the Scottish Parliament, would determine when it would be best to adopt a Scottish pound
- a constitution for Scotland – a new written constitution for Scotland, shaped by the people of Scotland and their elected Parliament, would clearly set out the key institutions, values, rights and equality protections—including new Scottish citizenship arrangements—necessary for an independent democratic nation state
- a social security system delivered with dignity, fairness and respect – with independence, the Scottish Government would take full responsibility for social security. This would enable us to reform Universal Credit to make it fairer, protect pensioners, support disabled people, and do more to tackle child poverty
- A migration system that meets Scotland’s needs – independence would allow Scotland to shape its own migration system to meet our needs as a country. Inward migration boosts economic growth, helps address depopulation, and enriches our society and our communities
- taking our place on the world stage – an independent Scotland would be able to build new partnerships with other countries and apply to join international organisations like the UN and NATO to help address global challenges
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