A Silver Chain – A Critique of the Sustainable Growth Commission’s Monetary Policy Recommendations

Overview —

Common Weal’s intervention in the debate surrounding Andrew Wilson’s Growth Commission, offering a substantial critique to keeping the Pound Sterling post-independence.


Dr Craig Dalzell

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On the 25th May 2018, after more than 18 months of preparation, the SNP-commissioned Sustainable Growth Commission made its final report – entitled Scotland – The New Case For Optimism – which has been presented as a series of recommendations on which could rest the economic, fiscal and monetary case for Scottish independence in a future referendum campaign. This document does not cover the full gamut of policies which would be directly affected by independence nor does it cover the full range of institution building required by a nascent independent state. Whilst the report discusses the creation of a “Central Bank” and associated regulatory body the discussion about the creation of other institutions such as energy regulators, customs and borders agencies and foreign and diplomatic services lay outwith its remit.

For these reasons the report has been presented a “discussion document” which will be presented to SNP members and the wider “Yes movement” of pro-independence groups and activists over the summer of 2018 in a series of National Assemblies. The proposal is that the discussions which take place at these assemblies will inform the SNP’s view of the Growth Commission’s report and shall guide the formation of the SNP’s eventual proposals for policies regarding an independent Scotland. This policy paper has been produced to fully inform those discussions and to add our view to the developing debate about the economic future of an independent Scotland.


― The Growth Commission report represents the first major work produced by the SNP on the topic of economy, currency and independence since the 2014 Scotland’s Future White Paper.

― Departing from the party’s position in 2014, the Growth Commission report drops the proposal of a formal currency union with the remaining UK (rUK) in favour of unofficially maintaining the Pound Sterling as the currency of an independent Scotland – this process is known as Sterlingisation.

― This paper highlights the severe shortcomings of this policy, notably the barriers raised by it towards launching an independent currency in the future – despite this being the stated aim of the report.

― In particular, the “six tests” laid out as a condition to transition to an independent currency appear to be actively designed to be impossible to meet. Several in particular appear to act to harmonise Scotland’s economy with that of the rUK and will make it difficult to actively diverge from policy decisions that will be made, then, by a foreign government without the input of Scottish politicians.

― Common Weal believes that the most “future neutral” approach to currency and independence (i.e. the option that leaves Scotland with the widest possible framework of policy options outwith currency) is to prepare to launch an independent Scottish currency so that it is fully operational by day one of independence.

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