NOTE: In the spirit of open debate, I’ve posted this. The ideas are entirely those of Alasdair. I have my own dissenting views on, for example, NATO and the Monarchy, but as a party member choose to keep them for a later date.
By Alasdair Galloway
Richard Murphy, as so often, is well worth a read in the National (https://www.thenational.scot/politics/20199448.snp-must-drop-disastrous-policy-currency-scottish-independence/)
He concludes his most recent piece with this – “The SNP really do need to drop the idea of sterlingisation, because it would be a disaster”.
I fully agree with him. In fact, I felt the “sharing the pound” argument in 2014 was foolishness on stilts because it left the goal open for Osborne to say – and he duly did – “oh no we won’t”.
However, first another consideration concerning the estsimable Dr Tim Rideout, who has been certainly one of the main proponents of getting our own currency out there asap after independence, rather than sterlingisation as suggested by the Growth Commission.
As some of you might know, as the result of a tweet in March about my good, good friend Priti Patel, which was careless rather than racist, Rideout was suspended by the SNP and that suspension still stands. Now leaving aside the passage of time – more than two months and counting – the importance of this is that if the suspension is not lifted Rideout will be unable to attend any future SNP Conferences.
Right now, the investigation into the tweet is with the National Secretary, not having been moved on to the SNP’s disciplinary committee for action to be taken. We might want to explain this by organizational stasis, but it would be, I think, be naïve to imagine that this does not suit the SNP leadership which remains tied to the Growth Commission recommendation of continuing to use the Pound – which Murphy refers to as a “sinking ship” – after independence.
Conference did of course agree to follow Rideout’s recommendation the last time it met – and while not a member, I was under the impression that Conference was the supreme policy setting body. A good example is Blackford’s statement last month (https://www.thenational.scot/news/20157543.independent-scotland-keep-british-pound-years-ian-blackford-says/) that Scotland could continue to use the pound for several years, for reasons of maintaining stability. This totally ignores the overwhelming majority Rideout’s motion won last November. His absence therefore might not be a matter for the leadership to regret.
The situation, however, throws up a number of issues
- Why is it that a suspension can be, in effect, be ‘stuck’ with the National Secretary without being moved on for investigation and action to be taken (should this be necessary). As above this has taken more than two months so far. Rideout has therefore suggested a Constitutional Amendment which, while he might not be able to propose it as things stand, he hopes other members and/or branches would take it forward. His proposal is to require the National Secretary to amend section 6.2 which reads just now
6.2 The National Secretary may suspend a member from exercising any or all rights of Membership while allegations are being investigated and considered by the Party. In all cases where this action has been taken, the suspension will be regularly reviewed.”
Rideout’s suggested alternative would replace “the suspension will be regularly reviewed” with “National Secretary will refer the complaint to the Member Conduct Committee within 30 days or the Suspension will automatically lapse.”
It’s a bit early to speak of plots, but it does seem just a little convenient that someone who has been a thorn in the side of the leadership should be excluded by a failure to take forward a party procedure. At the very worst, even if Rideout had been investigated and a decision taken to expel him from membership at least the process would have operated. Why has it not?
- Why is conference policy not being adopted by the leadership? There is always a tension in leadership anywhere between on the one hand keeping the members onside, but on the other hand the leadership taking its own initiative. The problem with this particular instance, it seems to me, is that the “sharing the pound” policy in 2014 was a presentational mistake at that point in the process. Have we really not learned from this at least?
I am not unmindful of the complexity of setting up a new country, and at the very least we should consider delaying anything that can be delayed with little damage. Thus, as former Bank of England Governor, Mervyn King pointed out after 2014, the week after a Yes vote it would have been “business as usual”. In other words, if “Scotland’s Future’ had suggested our own currency, it is not impossible that for the initial years of independence we might have shared the pound till there were fewer challenges to launching our own currency. That though is not where we are now.
For instance, in 2014 the UK was still part of the EU, and therefore to share currency with another EU member would not have been a great problem. For instance, prior to the Euro, Luxembourg currency was freely interchangeable with that of Belgium. But the UK is no longer an EU member, and it is very likely that sharing the currency of a non-member would be an obstacle if we propose joining the EU.
- Why do we want to share the pound? Perhaps the most important reason for our own currency is that if independence is not about taking our own path, which is likely to be different from that of rUK, what the hell is the point of independence? As the two economies diverge, sharing becomes that much more difficult.
Moreover, to quote Murphy again, the OECD “predicted lower than expected growth for the UK this year, and none at all in 2023. Russia apart, that puts the UK in last place amongst the top twenty nations in the world. No other major economy is expected to stagnate in the way we are.
Worse, the OECD also predicts that we will have a worse inflation rate than most other economies. As a result, the likelihood is that the pound is going to fall further against all other major currencies over the coming year. If the OECD is right, it is hard to come to any other conclusion.”
What is more, this makes even a peg to Sterling – not using Sterling but maintaining 1:1 value – for any new currency even more of a loser. For one thing, if the OECD is right, we are pegging to a currency declining in value. Does that make sense? Moreover, as Cameron Archibald pointed out in another article in the National, a peg is an incitement to speculators trying to force a new currency out of alignment. Think Black Wednesday in 1992 when the UK was forced out of ERM by speculators (eg George Soros) at enormous expense, as well as the possibility of interest rates at 15%.
Thus, in conclusion, two questions
- Why are the SNP keeping Tim Rideout under suspension?
- Why, despite last year’s Conference decision, do they continue to proselytise using Sterling, particularly when increasingly it looks like a really bad idea.