Poundland

Yesterday I wrote a piece for Bella based on the briefings coming from the SNP leadership about currency (Bad Fudge). I greeted them with a generally positive tone and really thought they represented a step forward (though not quite there yet). Unfortunately I’ve now read the motion (text copied below).

*

An extract of the provisional agenda of the SNP spring conference is published below:

• Resolutions

  1. SUSTAINABLE GROWTH COMMISSION

  I) Reaching our full potential with independence – matching the success of

  other small, independent nations.

  i. Conference notes that Scotland is a prosperous and successful nation,

  with significant economic assets and advantages, such as our vast

  natural resources, the skills and education of the people who live here

  and a range of sectors with existing and potential global

  competitiveness. Scotland is a rich country with the potential to

  achieve more.

  ii. However, Conference also notes that despite these abundant

  resources, similarly sized independent countries with the ability to

  tailor economic policy to their own needs have performed significantly

  better than Scotland.

  iii. In terms of GDP per head, the median income of the 12 small

  advanced economies considered by the Sustainable Growth

  Commission is around 14 per cent higher than Scotland’s – equivalent

  to £4,100 per person.

  iv. Conference believes that the example of these similarly sized

  independent nations illustrates the vast potential for an independent

  Scotland to develop a stronger and more sustainable economy as the

  foundation for the fairer and more equal society that we seek.

  v. Conference therefore welcomes the publication of the Sustainable

  Growth Commission’s report “Scotland –the new case for optimism”

  which contained 50 recommendations for the future of Scotland’s

  economy, and thanks the Commission for its work.

  vi. In particular, Conference considers that an SNP government in an

  independent Scotland should adopt the Commission’s recommended

  targets of (a) matching the average growth rate of these other small

  advanced economies within ten years (or earlier if possible) and (b)

  closing the gap in GDP per capita with these countries within 25 years

  (or earlier if possible).

  vii. Conference also supports the work of the Scottish Government – and

  a number of other governments internationally – to ensure that the

  wellbeing of the population is at the heart of our approach to inclusive

  economic growth, welcomes the decision of the Scottish Government

  to consider factors than just GDP, in assessing the performance of the

  economy and the country, and agrees that the Scottish Government

  now and with independence should look for further ways to promote

  wellbeing in its approach to policy development, budgetary decisions

  and how we measure success.
• viii.Conference endorses the Commission’s advice that improving

  economic participation and equality, increasing productivity, and

  growing Scotland’s working age population must be an independent

  Scotland’s top economic priorities.

  ix. Conference welcomes the work already underway by the Scottish

  Government in these areas – including support for continued

  migration to Scotland, the development of the Scotland is Now

  campaign, progress on the Scottish National Investment Bank, the

  establishment of an Infrastructure Commission, actions to reduce

  poverty and close the gender pay gap, and increased support for

  innovation, research and development and exports.

  x.Conference also welcomes the Scottish Government’s inclusive

  approach and the work of the Fair Work Convention and Just

  Transition Commission, and agrees that future economic policies must

  be developed in partnership with trade unions, civic society and

  business.

  xi. However, Conference believes that without the full powers of an

  independent country the Scottish Government’s ability to act in these

  areas will continue to be restricted and the potential of our nation

  constrained as a result.

  xii. Conference therefore instructs the National Executive Committee to

  oversee a programme of work to develop a range of policies – building

  on those recommended by the Sustainable Growth Commission – that

  an SNP government in an independent Scotland would pursue to

  boost population, participation and productivity; and to immediately

  develop a campaign focused on Scotland’s economic potential as an

  independent country.

  II) Sustainable public finances – rejecting austerity.

  xiii. Conference notes the Sustainable Growth Commission analysis of

  Scotland’s public finances.

  xiv. Conference agrees with the Commission that the levels of debt and deficit

  that an independent Scotland will inherit is a feature of the economic

  mismanagement of successive Westminster governments and not a

  reflection of the merits and opportunities of independence.

  xv.While there are different views on Scotland’s finances to the extent that

  Scotland, governed by Westminster, has an estimated notional deficit that

  is higher than comparable countries, Conference believes that this is an

  argument for change not for the continuation of Westminster governance.

  xvi. Indeed, in light of Brexit, simply continuing as we are is likely to make

  Scotland’s fiscal position more challenging, not less.

  xvii. Conference endorses the view of the Commission – and indeed of the UK

  Treasury – that UK debt will remain the responsibility of the UK

  government and that, by definition, an independent Scotland will start

  with zero or minimal debt.

  xviii. However, Conference also agrees that an independent Scotland should

  make a fair and reasonable contribution to the servicing of UK debt. The

  amount of such a contribution will depend on a fair negotiation of both

  debt and assets and Conference agrees with the Commission that this

  would form part of an annual solidarity payment. Conference endorses in

  principle the Commission’s recommended approach to negotiations.

  xix. The deficit that an independent Scotland will inherit will be influenced by

  the outcome of these negotiations and also by specific spending decisions

  of an independent government – for example, in the case of an SNP

  government, the decision not to invest in nuclear weapons.

  xx. Conference endorses the Commission’s recommendation that future

  revenues from North Sea oil and other windfalls should be invested in a

  Fund for Future Generations to support intergenerational projects such as

  the transition to a green economy.

  xxi. Conference welcomes the Commission’s conclusion that the starting deficit

  of an independent Scotland is manageable and fundable and can be made

  sustainable. Conference agrees that sustainable public finances and

  achieving the lowest possible cost of borrowing are important and that an

  SNP government will seek to maintain debt at sustainable levels and

  reduce the deficit to sustainable levels as early as is consistent with

  continuing support for public services, people’s wellbeing and investment.

  xxii. In that regard, Conference notes that the Commission’s projections take

  no account of the higher growth that the powers of independence will

  enable Scotland to target, nor of the benefits of Scotland continuing to

  operate within the EU single market.

  xxiii. Indeed, Conference stresses that sustainable public finances

  fundamentally flow from a healthy, sustainable and fair economy.

  xxiv. Fiscal targets must never be an end in themselves and an SNP

  government will not pursue such targets at the expense of the economy

  or investment in public services. The UK government has demonstrated in

  recent years that such an approach is counterproductive and harmful.

  xxv. Conference therefore agrees with the Commission that an austerity or

  cuts approach to deficit reduction should be firmly rejected. At times of

  lower growth, investment in the economy and public services should take

  priority over short term targets.

  xxvi. Conference also agrees that an economic stimulus at the point of

  independence should be considered.

  xxvii. Conference concludes that the choice facing Scotland is the economic

  decline of Brexit or taking our economic future into our own hands with

  independence; and resolves to persuade the people of Scotland that

  independence offers the best pathway to a more prosperous and

  sustainable future.

  III) Towards an independent Scottish currency.

  xxviii. Conference notes that despite significant economic assets, natural

  advantages and a talented population, independent countries with the

  ability to tailor economic policy to their own needs have performed

  better than Scotland.

  xxix. Conference notes that among small, successful independent countries

  there is no single approach to currency. Conference also notes that

  the pound sterling is a shared currency across the UK and is available

  for Scotland to use, just as Ireland did for an extended period.

  xxx. However, Conference believes that it should be the policy of an SNP

  government in an independent Scotland to establish an independent

  currency; and agrees that the process and precise timescale for doing

  so should be subject to robust governance and guided by the six tests

  recommended by the Sustainable Growth Commission.

  xxxi. During the period of transition to independence, work should begin on

  the establishment of an independent Scottish Central Bank with a

  Scottish Financial Authority, and the other steps required to support

  the establishment of a new currency.

  xxxii. Until a new currency can be safely and securely established in the

  interests of the whole economy, the currency of an independent

  Scotland should continue to be the pound sterling, ensuring continuity

  and stability for the Scottish people.

  xxxiii. Conference considers that the independent central bank should report

  annually to parliament on progress toward meeting the necessary

  criteria; and that an SNP government should aim to complete the

  preparations to enable the Scottish Parliament to take a decision on

  establishing a new currency by the end of the first term of an

  independent Parliament.