George Kerevan states that the Sustainable Growth Commission (SGC) “wants an independent Scotland to keep the pound sterling for an indefinite period”. This is not the case. What the SGC suggests is that Scotland continues to use our existing currency for a transitional period which is undefined. ‘Undefined’ is not the same as ‘indefinite’.
As in many other areas, this is simply a matter of the SGC acknowledging reality. The point at which Scotland transitions from sterling to any new currency arrangement cannot be predetermined. It must be a matter for the judgement of the government of the day taking account of prevailing circumstances.
It is, of course, possible to argue that there should be no transition period; that Scotland should move to an independent currency immediately upon independence being restored. But, if the need – or desirability – of a transitional arrangement is accepted, then it must also be accepted that the duration of this period cannot be set in stone. To do so would impose undue constraint on the Scottish Government.
The most we might sensibly do is place an obligation on the government to move to an independent currency at the earliest possible time.
We might reasonably suppose that, if the intention is to adopt an economic strategy informed by MMT, some preparation will be required. This could necessitate a transitional arrangement even if it is not ideal. The crucial factor here is the timescale for restoring independence.
If we had another five years then it would almost certainly be possible to eliminate the need for a post-independence transitional currency arrangement. Anybody who thinks we can afford to wait that long to dissolve the Union really isn’t paying attention. Perhaps because they’re too busy obsessing about the fine detail of currency arrangements and economic policy.
Not being either an economist or a political fantasist, I long since became comfortable with the fact that the future can nether be wholly known nor absolutely determined. I am satisfied that Scotland will have a functioning currency. Because the notion that we might not is too ridiculous to contemplate. And I am satisfied that Scotland is perfectly capable of managing its own currency arrangements and economic policy. Because the implication that we might not is both profoundly offensive and contrary to all available evidence.