The Bad Fudge of a Schrödinger’s Currency

It has undoubtedly been a major step forward for supporters of Scottish independence that the SNP finally appears to be supporting a new Scottish currency. From here, to be fully fit for purpose, all it needs is for the fudge content to be significantly reduced.

To de-fudge the position all we need is for the independence case put to the public in a new referendum to be based on having an independent currency. If we do, the mandate will be implicit and there will be no need for a secondary vote in a future Scottish Parliament.

This would greatly speed up having our own currency and our application to the European Union – and would take the power to wreck Scottish independence out of the hands of unionists in a future Scottish Parliament and put the chance to make independence work into the hands of the Scottish people. It’s a win-win.

My fear remains that the strategy is a ‘Schrodingers Currency’ of a fudge in which the SNP still believes that uncertainty during the referendum means that every voter can hear whatever they want about a future currency.

This ‘works’ on the basis that the currency issue doesn’t feature at all in a referendum; that we vote for the pure principle of ‘Scottish freedom’ and we leave all the detail to some future Scottish Parliament to decide. In that way we can tell every voter that they’re going to get the currency THEY want – Sterling, Scottish currency, the Euro, whatever you fancy.

The SNP can then say ‘at some point in the future we’ll vote for a Scottish currency’ while still claiming that people who don’t want a Scottish currency can then vote for a party that wants to keep Sterling. Abracadabra – it’s whatever you want it to be.

There is more than one problem with this. For a start, does anyone really believe that currency won’t feature in the debate? How is the substantial uncertainty contained within this approach any different from the substantial uncertainty contained in the last approach?

The uncertainty principle has always applied in politics (people don’t like to choose things with uncertain outcomes) but post-Brexit it is more intense than it has ever been. If ‘leaving it to a future group of politicians to sort out’ was ever a positive, it certainly isn’t in the post-Brexit environment

And, having looked at a lot of voter attitude research, I can also say with some confidence that this is a particularly acute issue for our key target voters. It was uncertainty the last time that was the final barrier and this is an even bigger issue for them now. The other side will play ‘you won’t even know what currency you’ll use for the next six years’ over and over – and it will do damage.

Because that’s the kind of timescale we’re talking about. By my calculations Scotland wouldn’t have a currency for at least nine years after a vote for independence – at least two years from the vote to elections for a Scottish Parliament then up to four years before a vote in the Parliament and then at least three years until the currency is set up. If this required a constitutional amendment (quite possible) there might well need to be a public confirmation referendum, potentially adding at least another year or two.

(This timescale assumes that the SNP continues to form the Scottish Government and that they are able to deliver a Scottish currency more efficiently than they have managed with the frankly staggering nine years it has taken to set up a payment system for the newly devolved benefits system.)

That’s basically a decade of Sterlingisation. I know I bang on about this rather a lot, but if there is a London-based or global financial or economic crisis during that period, Scotland faces a genuinely chilling situation.

And what if the SNP isn’t the biggest party after Scottish independence? If they stand on the Growth Commission ticket in the first Scottish elections, there is a very good chance they won’t be.

Or what if they are the biggest party but without a majority? What happens if the Scottish Parliament doesn’t pass this vote? If I was a unionist my entire strategy would be to use that future Parliamentary vote to reject a currency (creating a crisis) and push for reunification – the ‘People’s Vote’ strategy.

In either event, without any certainty that there will be a successful vote on such an absolutely crucial issue, there is an enormous risk that Scotland will be left in long-term limbo. Unionists will do everything they can to scupper the Scottish currency an independent Scotland needs to be successful. An unstable Sterlingisation policy is ideal for them.

And what of the Growth Commission’s ‘six tests’? This was one of the most iniquitous aspects of the Growth Commission report, a clear attempt to hand control of whether Scotland gets a currency or not to the professional economist-financier set and impose austerity.

My big fear here is that the SNP conference will be asked to vote for a resolution that looks like it is promising a currency and then subsequently find out that it’s actually offering an annual assessment of the six tests. It’s worth remembering that one of the six tests is to sharply reduce the size of the public sector as a proportion of the overall economy.

And then of course we’d better be quite clear what all of this means for those who want to join the European Union. To make a full application we will need to have had our own currency and central bank for three years. While the process for joining the EU has flexibility in it, it certainly suggests that you’d be unlikely to get in quicker than three years after application.

So let’s spell that out – if its nine years to currency, then three years to be compliant with the rules for applying to join the EU, then another three years of the ‘accession process’, we’re definitely looking at Scotland being outside the EU for 15 years.

These are just some of the problems and uncertainties that result from what we know so far about these proposals.

At this stage let me reiterate that this is a very positive step forward. It’s a fudge, but its better than paralysis. We’re finally talking about a Scottish currency.

But that’s the point – we’re finally talking about a Scottish currency. Everyone can hear us, so that is what we need to promote and to defend against unionists attacks. It will be much easier if we adopt the policy properly and whole-heartedly. We can’t ‘magic it away’ so we should own it enthusiastically.

Because the problem with Schrödinger’s Currency is that it also allows everyone to hear only the outcome that they DON’T want. Rather than selling the currency option to undecided voters with confidence and positivity, we look like we’re prevaricating. Just Do It folks.

What is undoubtedly a massive step forward is that there is now a clear route for members of the SNP to make this policy genuinely fit for purpose. It only really requires one amendment.

If it is made clear that the Scottish Government will make a new currency part of the case put to voters in the referendum and that in supporting independence it is implicit that there will be a Scottish currency, there is simply no need to kick any cans further down the road. We can just get on with it.

It entirely removes the need for the awful ‘six tests’ apparatus which must be entirely rejected. It contracts the timescales very significantly – Common Weal has shown that we can have a Scottish currency within three years of a vote for independence. If we’re going to do it, I can’t see the point in waiting. But even if we don’t get started until after independence we’re still bringing in a currency within a few years of independence day.

There’s lot’s more that most people in the independence movement will want to see dropped from the Growth Commission’s proposals. For example, are we really committing to the UK’s tax and financial regulation systems? Are we truly just going to accept however much debt the UK wants to dump on us without negotiation? Are we really handing over Scotland’s international development funding to Westminster to do with as it pleases? And do we really want to tie ourselves to a legally-binding ‘Solidarity Payment’ to the rest of the UK in perpetuity? (Most of these are rhetorical – nobody does.)

But these are for later. So is the SNP’s adoption of the economic growth policies of the Growth Commission as its economic policy for the early years of an independent Scotland. I am pretty confident Scotland will vote against them, but the price will be paid by the SNP and not Scotland.

For now, all the members of the SNP need to do is make sure that this conversion to a Scottish currency is a real, solid and meaningful commitment, sold to Scotland with conviction and no longer hedged, fudged or fiddled.

If it is, we’re finally getting towards a place where we could actually fight a referendum campaign. And win.

Comments (19)

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  1. mince'n'tatties says:

    ‘This timescale assumes that the SNP continues to form the Scottish Government’. This for me is the nub of Mr McAlpines article
    Two years to find out. The realisation that politicians like all else in life have a sell by date hasn’t dawned yet.
    Simply put the current SNP leadership is bereft of talent and ideas. Tired, narky and exhausted. The Murrell stranglehold has done its work a tad too well.
    Who’s listening now with an open mind? Persuasion from informed people is the order of the day, but seriously who wants to listen?
    Eg I remember when Angela Constance did walkabouts with enthusiastic unpaid helpers. Now……
    Positions are being adopted and far more schimistic than simply rejecting Unionism

    It really hits home that Mr McAlpines thoughtful insight into all things Scottish currency never mentions a politician by name. Not once, look in vain…… A telling flaw in its considered approach. Currency choice is political economics at its most fundamental after all.
    So I will do the mentioning. Keith Brown could not persuade a child to eat ice cream on a hot summers day. And there he is at Sturgeons side. So who? A Hosie type enthusiast perhaps before he self combusted? A message needs a messenger.
    No apologies from me.
    An excellent treatise on our future currency Robin, but next time throw in some reality politics please. And that should include the Marmite Murrell influence.

    1. mince'n'tatties says:

      Apologies, schimistic should read schismatic. And, ‘divisive’ would have done the job just as well.

  2. w.b. robertson says:

    Those with lolly are desperate to know about the future currency. But irrespective whether it is called pounds or peanuts, the punters want to know whether they will be better off. Or in their normal state on the night before payday.

  3. John S Warren says:

    “And, having looked at a lot of voter attitude research, I can also say with some confidence that this is a particularly acute issue for our key target voters. It was uncertainty the last time that was the final barrier and this is an even bigger issue for them now. The other side will play ‘you won’t even know what currency you’ll use for the next six years’ over and over – and it will do damage.”

    I have never doubted that currency is ‘the’ critical matter. Salmond was wrong to select Sterling in 2014. I would merely add that I did not then understand why Scotland would accept any of the British National Debt. Not only will rUK keep sole rights to the Sterling currency (which we should think of as a critical asset, which entails responsibility for the consequent national debt), but the British Government in 2014 already made clear (effectively speaking for the future rUK) that rUK would take full responsibility for all UK Debt. They did this only because they understood the unavoidable logic of the position they freely undertook.

  4. Graham Ennis says:

    I despair. The banknotes in your scottish wallet are Scotish currency. Its legal tender. It works as money. Those notes are not issued by the bank of England, they are legally issued, under Scottish law, by the scottish banks. The notes are inherited from the act of Union, which implicitly allowed the continuation of Scottish law. To stop this actually existing scottish currency, which would otherwise continue after independence, would require a special act of the Scottish parliament. They would then have to pass another law, recreating the same currency. This nonsense borders on madness. Leave the existing Scottish currency alone. All it needs is an act of Holyrood bringing it under control of the new Scottish treasury. Banks could then still issue the notes, but so could the Scottish treasury. In Hong Kong, where the same system applied, they simply formed a currency board of the banks, that the Hong Kong Government supervised and controlled. In Scotland, the existing currency would continue, as normal, but would immediately become more valuable than the English pound, as all the assets of the bank of england would have to be divided, and 10% of them handed to the Scottish Government. This would devalue the English pound by 10%, and increase the Scottish pound value considerably, probably by about 20%. So the Scottish currency would become considerably stronger. By about a third. Think aboot it. Plus ScotGov would have complete control of the currency, and banking system, and would end up with 10% of the bullion and other assets of the Bank of England. Plus the one billion english notes deposited with the London bank as “Cover” for maintaining parity with the English pound. (which is probably going to collapse post BREXIT, and whose English pound is now performing worse than the Mexican Peso, due to BREXIT. I despair. The utter basic economic ignorance of those in Holyrood and in the SNP who do not understand these basic facts, scares me. It scares me a lot. Its based on sheer ignorance and fear of change. The Scottish Cringe is alive and well and flourishing in Holyrood. Comments please. Why is the SNP trying to commit economic suicide, by not doing a proper currency job. Its dependency syndrome. Pathetic.

    1. Lorna Campbell says:

      Absolutely agree, Mr Ennis, that there is no need to change the issue procedure for the new Scottish pound, but, if we want metal coinage, we will have to re-establish a mint of our own. As I, and others, have suggested, we could run our parallel currency with sterling for a year or two until the markets stabilized, but I, and others, are open to other suggestions. None of this, including the setting-up of a central bank – which should be state owned – need take ten years, or anything like it. As a long-term SNP member, I am worried about the ‘replica UK’ that we seem to be aiming for with the Growth Report. I am not a Socialist per se, but I do have left leanings of socialism, and the neo liberal capitalist economics, where the aim is to privatize everything is anathema to me, and I suspect, many Scots. I would like to see an independent Scotland adopt a mixed economy as far as possible, with the private sector keeping its nose out of areas of public life for which it is not suited and which, as has been proven, it is inefficient. That is because, generally, it always seeks to maximize profit at the expense of the delivery of the actual service itself in a manner that is injurious to well-being.

      No one ever said independence was going to be easy, but I am afraid that the SNP appears to be going in a direction that is meant to ease us into a transition, over an inordinately long period of time, that will find us in the same old, same old. No other country that I could find has done that. This is precisely why the undue influence of the NO voters is so at odds with common sense: independence supporters across the board will not have either the stamina or the patience to wait for just another form of the UK so that those who voted down our independence last time may feel slightly less threatened – which they won’t, in any case. I keep saying that it was not economics which was at the top of the list for NO voters, however much they may try to gull us into believing that. It was good old-fashioned neo colonialism at its worst. That is what the Edinburgh University study showed explicitly. That explains why so many former NO voters also voted Leave in 2016. It also explains why the YES vote has barely shifted in the teeth of Brexit, which has not even begun to bite. Once we are in that post Brexit UK, we will be allowed no opportunity to become independent; it will be all hands to the wheel. The whole independence movement has misjudged the aims of the UKG and its arms of state control: there will be no S30 Order. We either hold an advisory referendum, which will lead to the Catalan situation without the jailing (because the ECJ is very likely to strike those down and free the whole lot of the Catalan politicians, as well as take the opportunity to warn Spain about it very iffy human rights and its judiciary) or we will go down a different route. The second will take nerve and courage to undertake, but it is the route that (barring those who have taken up arms) we will almost certainly have to take: that is the dissolution of the Treaty of Union; this should always have been Plan B. The ‘Velvet Divorce’ of Czechia and the Slovak Republic seems a very distant prospect with the UKG at the helm of British/English Nationalism, and the Opposition backing it in every way it can. Former imperial states are unwilling, generally, to cede one iota of power, and the UK is a former imperial state par excellence. This is a very good article.

      1. Wul says:

        Hear Hear! Lorna,

        You are talking my kind of language. There is a huge army of folk ready to be mobilised and inspired by a bold and optimistic message such as yours. F*ck the status quo! I want a better, saner, fairer, happier, more fun, more musical, more poetic, more alive, more rich, more REAL country to live in. And I want it while I can still wipe my own ar*se!

        It’s like being on a coach holiday where half the bus ( OK 45-48% ) is full of energetic, go-ahead, creative people and the other half is full of half-dead (but wealthy & careful) cautious net-curtain twitchers , worried about what the neighbours might think.

        At the wheel is the driver/tour guide saying; “I know the rest of youze would like to stop the bus and have a swim here in this beautiful river, get the fire going and have a right guid ceilidh, but we need to keep the auld folks happy too remember… It’s nearly 4 o’ clock and they like a wee doze before tea time”

        Why does Scottish independence need to be done with British decency and “quiet desperation” ?

        Fu*k it! Let’s get some action….

    2. Wul says:

      Graham Ennis,

      Is that true, that we could just keep using our own currency after leaving UK? How come it’s never mentioned by SNP? Or anyone else?

      Have to say, the thought of living in a wee, poor, racist, Tory, tax haven off the coast of Europe for the rest of my puff is unappealing. Just how much tripe will the Scottish public swallow before we boke?

      Apologies for the negativity. Worn out with endless politics, but no prospect of change.

  5. Jack collatin says:

    I confess, this is the first time that I’ve read anything, and I mean anything written by Robin McAlpine.
    It appears to be an elaborate, ‘Yes but’ from the Left.
    The nonsense that we would not gain entry to the EU for fifteen years did it for me.
    The nonsense that Public Services would reduce and austerity, rather than economic growth would ensue is equally pusillanimous.
    Pure Judean People’s Party ‘What Have the Romans Ever Done For Us’ waffle from the Darlings of the Left.
    I read the Scotsman free ‘will say’ garbage from Richard Leonard earlier.
    God, they would transport us back to the ‘sixties.
    Scotland will thrive when Independent, will be the continuer EU State, and we won’t be paying for Trident, the British Army Navy and Air force, and we won’t be handing the Country over to a bunch of New Wave Militant/ Momentum Marxists.
    Live with it.
    But perhaps that’s the long game.
    Split the Yes vote and thwart Self Determination.
    It will cost me £550 million to sort out the ‘Scottish Labour’ mess on equal pay in Glasgow.
    Why t he fuck would we let the Labour Party loose on governing New Scotland?

    1. Sounds like someone got a bit tipsy at the Golf Club

      1. Jack collatin says:

        Oh dear, Ed.
        ‘Pusillanimous’. I ventured, and ‘pusillanimous’ I meant.
        The prize is Self Determination, not using Independence as a vehicle to make a name for oneself, and a left Wing Utopia.
        I’ve had my fill of folk never off the telly or in the ‘papers telling me what I should think.
        I’ve never been in a golf club in my puff, but hey, if conjuring up some image of me being a Bearsden Tory gets you through the night, go for it.
        The notion that we would be asked to wait for 15 years to join the EU is just, well, nonsense.
        I’m done with this.

        1. Right. So you think anyone who wants Scotland to have their own currency is a Marxist?

          It does sound a bit unhinged.

          It’s not really utopian to have control of your own economy, is it?

          1. Jack collatin says:

            Mmmm… I walked right into that one, didn’t I?
            Nowhere in my humble little observation that the author of this piece is offering anything other than an invitation to be led up his own wee Marxist Leninist Momentum Corbynist Trostkyist garden path to increase his own profile did I suggest that independent countries seeking to establish their own currency are ‘Marxist’.
            But you know that,Ed.
            I watched that waste of space Richard Leonard on Brewer’s Sunday Yawn yesterday.
            It is incredible to consider that the Left in Scotland is now fronted by a man who can hardly string two words together and those that stumble from his mouth are a tissue of lies and soundbites lumping the Bad SNP in with the Blue Tories.
            NS is imposing austerity on the citizens of Scotland and will keep our railways privatised?
            Cole Hamilton tweets that we’ll have to adopt the Euro as continuer EU State come independence; a lie, to at to the torrent of lies emanating from the Dark Money Brit Nat Fascists.
            When I see the counter balance to these cynical lies and threats from the Brit Nats emanating from the Far Left But For Independence But A Socialist Take Back The Means Of Production Cuba Model then I comment.
            It is a nonsense to suggest that by developing our own currency would set back entry to the EU 15 years.
            I stopped beating my wife, honest.

  6. Wul says:

    Any examples of countries which attained independence by gradualism?

    Please post links.

    1. Lorna Campbell says:

      I have proffered the same questions many times, too, Wul. I believe the answer is none. No country, except maybe Czech and the Slovak Republic, has ever managed a ‘Velvet Divorce’ either, and the UK is not prone to divorce full-stop. A thrashing within an inch of our lives and hospitalization is more the UK’s style. There is much to admire in Robin McAlpine’s piece, but I can’t agree with all of it either. The fact is that he and his team have done a massive job, as has Andrew Wilson and his team. Somewhere in the middle, we might find that open sesame that leads to timeous and bold independence. I just pray that the SNP understand that they must move soon or lose it all. I have not the slightest doubt that taking us out of the EU and failure to deliver independence will be their demise. Yes, it is a massive gamble, yes, it might destroy them, but they should remember Bannockburn: Bruce did not want to fight; he wanted to run and continue the guerrilla warfare; needed time and resources. His brother checkmated him; and his lieutenants persuaded him. He was brilliant when it mattered, and, although it was not the end of his or his country’s travails, we remained an independent country until 1707, when it was intended that we should form one half of a partnership. That is the Union’s Achilles’ Heel: the Treaty itself, which has been abused and kicked and beaten and undermined since day one. One half of that ‘partnership’ had never the slightest intention of sticking to it.

  7. William Ross says:

    In a quiet lunchtime I have caught up on comments to this article and really enjoyed the hilarious exchanges between Jack and the Editor. Classic.

    Robin: you have just about made the case for the Growth Commission. Anything that can keep Scotland out of the EU for 15 years must be worth supporting! With a bit of luck there will not be an EU in 15 years?

    William

    1. Jack collatin says:

      Mr Ross, be careful what you wish for.
      Check your passport.
      If you intend taking a wee break on the Continent this summer, from the 30th March you will be travelling from a third Country into Europe.
      If your passport is due to expire within six months of your trip, you won’t be allowed to travel.
      Google the ‘six month rule’.
      I am a European, not A Brit.
      The thought of being at the mercy and beck and call of 500 odd Brit Nat Imperial MPs from another land and subjugated to existing as a serf in a militarily suppressed colony of Britannia fills me with barely tempered rage.
      Europe is far from perfect, but the alternative?
      Boris Johnson may be PM of Britland for two terms post Brexit.
      Or Rees Mogg? Or Michael Gove?
      Meanwhile Independence factions talk of a Communist Wonderland headed by Corbyn and McDonnellin order to gain some sort of unelected leverage in the Indepndence Movement.
      Stand for office, Mr McAlpine.
      My head does not button up the back.
      Now’s the day and now’s the hour.
      It’s comin’ yet for a’ that.
      Scotland shall be free.

  8. William Ross says:

    Jack

    Thanks for the warning about the passport but I think I will be OK. I look forward to the day when the EU is a “third country”.

    You should keep on commenting on articles because you can brighten up Bella`s fare. Better still convince Mike Small to let you write articles!

    William

    1. Jack collatin says:

      William, you see, we can agree to differ diametrically, but still remain civilised.
      I am a European, yet at 23.00 hours on the 29th of this month an English Homeland Security Border ‘Force’ will surround my country, Scotland, with barbed wire and hem us in with Border Guards under instructions from a Right Wing Elitist Oligarchy to stop us travelling working and settling elsewhere on our Continent.
      We Scots voted Remain, 62% Remain, 38% Leave, so I am not an advocate of arguing that ‘democracy’ dictates that the 38% can lump it, or move to Johnny Furriner free Doncaster.
      NS produced a Norway option in January 2017 which would have satisfied both camps Up Here.
      David Davis threw it in the bin.
      However (not ‘but’, you notice), I am a passionate advocate for Scottish Independence.
      I am way too old to take up my pruning shears and march to town and occupy Partick Post Office and declare a Scottish Republic.
      But in my advancing years I have experienced the fell hand of British Unionism eating away at Scotland, its people, and its resources.
      I developed a fear of flying in my late forties, I used to fly everywhere before then, and as an alternative have motored to Europe many times in the past few decades.
      I have passed seamlessly from Northern France into Germany, Southern France into Spain and so on.
      Intuitively ‘Stop Freedom’ in any context is surely wrong.
      May is declaring in triumph that she will stop ‘Freedom of Movement’ at the end of this month.
      This cannot be right at any level.
      My wife is Irish.
      I’ll miss her when we get the four o’clock in the morning knock at the door.
      I urge you to visit L’Hotel Batard in Lectoure, William. Sample their cuisine and Bordeaux.
      You too will declare yourself a European; of this je suis certain.
      A bientot.

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