Scottish independence prospectus still leaves fundamental questions unanswered

Scott Wright of Pinsent Masons said the newly-published paper, entitled ‘Building a New Scotland – A stronger economy with independence’ (110 pages / 5.59MB PDF), did not answer a number of “fundamental questions” on the plan for a new Scottish currency and the possibility of customs checks at the border with England. 

In a speech ahead of the paper’s publication, first minister Nicola Sturgeon said that the UK economy was both less productive and less equal than independent European countries comparable to Scotland. She added that remaining in the union risked “long-lasting” damage and that a “stable Scottish economy is more possible with independence”.

According to the prospectus, an independent Scottish government would retain use of pound sterling, before adopting a Scottish pound at an unspecified date. Ministers would then establish an independent Scottish Central Bank with oversight of monetary and economic conditions in Scotland and with responsibility for financial stability.

The Scottish government would also apply to re-join the EU and the single market, prompting the introduction of physical custom checks on the two main trunk routes between Scotland and England – the A1 and the M6. It would also implement the ‘common transit convention’ – an international agreement – to enable simplified movement for goods between Scotland and the UK. The document suggested that more clarity on these customs checks would be included in future papers.

Wright said: “The paper represents a further significant step in the Scottish government’s quest to convince voters of the merits of independence, should a second referendum take place. But it feels like a missed opportunity, as many of the fundamental questions remain unanswered. The paper includes limited detail on how long it will take to establish a separate Scottish currency and subsequently re-join the EU. This is information that would give voters, and indeed businesses, more certainty – particularly with a second referendum potentially taking place in 12 months’ time.”

“While we now have more detail on some of the economic structures that would be introduced in a newly independent Scotland, businesses in particular will want to know more about the financial impact of the changes. They will want clarity, for example, about the effect of future customs checks on goods travelling between Scotland and England to enable them to prepare accordingly. Future papers in the ‘Building a New Scotland’ series will be critical in addressing the residual concerns of voters and businesses alike.,” Wright added.

The prospectus also included plans for a debt management office to manage the Scottish government’s debt stock, the issuance of debt, local government debt and contingent liabilities, and a new fund which will use oil and gas revenues to invest in infrastructure projects. The Scottish government would seek to reach bilateral arrangements with the UK on mutual recognition of professional qualifications and develop a new approach to immigration policy to mitigate the risk of depopulation in Scotland.

The paper also proposes establishing a Scottish Fair Pay Commission to lead a new approach to setting a national minimum wage. Future papers in the series, covering proposals to re-join the EU, reforms to the energy industry, social security and pensions, will be published in the coming months.