Economical With The Truth
In 2014 the SNP lost because they didn’t have the confidence to be honest about currency. Their words on Sterlingisation show that has not changed.
Scottish politics is dominated this week by the current First Minister and her mentor Alex Salmond fighting over which one is the liar. I don’t envy the committee looking at this. Trying to pinpoint dishonesty in the SNP is like trying to find a needle in a stack of needles.
All politicians, as they try to minimise their accountability, risk crossing the line between deflection and deceit. I would argue that nationalists are more open to this risk than others because, as we have seen again and again around the Salmond Inquiry, they will excuse alleged bad behaviour as a price worth paying to secure independence. A lie in service of the national cause is a virtue, not a sin.
I was sent a perfect example of this a few days ago in two recordings of SNP Ministers speaking about currency to closed-door meetings of party members. In the video I share at the bottom of this newsletter, you’ll see that the SNP are being dishonest about the name and nature of their currency policy, but also that this dishonesty is conscious and justified on the basis that it will help win a vote to leave the UK.
The policy in question is sterlingisation. As a word, it is an unattractive mouthful, but as a policy, it is an ugly mess. Don’t take my word for it. Nobel Prize-winning economist Paul Krugman wrote it is “mind-boggling that Scotland would consider going down this path…If Scottish voters really believe that it is safe to become a country without a currency, they have been badly misled.”
Despite this, it has been the official policy of the SNP leadership since the party’s Growth Commission reported it and backed sterlingisation:
“The Commission recommends that the currency of an independent Scotland should remain the pound sterling for a possibly extended transition period.”
The author of the report has said that it could be ten years before any decision is made on whether to end that transition. Perhaps because scores of economic experts have warned that a country like ours really does need a currency of its own, the report immediately disowned the policy it had spawned:
“This option is not ‘Sterlingisation’ (since Scotland already uses Sterling)”.
This pitifully semantic argument has been repeated by Nicola Sturgeon several times since, including in the video below.
This issue proves three things about sterlingisation:
That Nicola Sturgeon is lying when she says what she is offering is not sterlingisation;
The SNP support sterlingisation even though they know it would be ruinous for Scotland;
That they are supporting a disaster because they know that voters won’t support leaving the UK if it means losing the pound.
1. It is Sterlingisation
The next few paragraphs should be the only time anyone ever engages seriously in this argument. Nobody, not economists, no-one in the financial sector, and certainly not any SNP politicians really believe their policy is anything other than sterlingisation. It is a bad-faith argument. The problem with sterlingisation isn’t its name but the damage it would do to Scotland.
It is important though to know the SNP are lying when they say this policy is not sterlingisation. The page below (I could have added others) from the SNP Government’s own Fiscal Commission Working Group on Currency, leaves no room for doubt in defining sterlingisation:
The other reason we know that this is sterlingisation is that SNP Ministers call it sterlingisation behind closed doors when they talk about how bad sterlingisation would be if Scotland chooses sterlingisation.
2. They Know Sterlingisation Would be Ruinous for Scotland
In the video below are a few quotes from then Minister for Business, now Minister for Energy, Paul Wheelhouse. Recorded speaking to a meeting of SNP members, he is clear that Sterlingisation has some major disadvantages to the currency we have now.
Wheelhouse sets out that it means having no central bank that could help out in a crisis. This is not an academic consideration. Twice in the last decade, first during the banking crisis and then again in the current pandemic, the mortgages and wages of Scots have been saved by having a central bank that could create money. The Minister also admits that the policy means no control over our interest rates, something that obviously matters to anyone who borrows or saves. And finally, he warns that, without control over our currency, Scotland may have to cut public spending dramatically.
Why would a party that styles itself around the idea that it is ‘stronger for Scotland’ choose a currency policy that would make Scots weaker, poorer and less powerful?
3. They’re Doing This Because They Know Scots Want to Keep the Pound
The clear answer is given in the second video, this time a recording of the SNP’s Minister for Trade. Speaking to another meeting of party activists, he was honest enough to admit that they are being dishonest. In case the cynicism of his words was not clear enough, he was good enough to stand in front of slides that summarised the currency con.
In the first slide, he’s clear that the choice they have made about the currency is about politics, not economics. It is about securing a Yes vote, not securing our jobs, mortgages or pensions:
His next slide begins by admitting again that a separate currency is unpopular, and little wonder as he sets out how we would be using taxpayers money to defend a new currency rather than spending that money on public services like the NHS:
These slides, and the words in the video below from SNP Ministers who devote their lives to breaking up the UK, make the case against leaving the union more powerfully than I can.
This is the core problem with nationalism: it puts the nation before people. They know that the policy they are proposing means more costly mortgages, fewer jobs, and cuts to the NHS. They chose it anyway because they believe it is the policy that looks best on a leaflet in an independence campaign. Their aim isn’t a better nation, it’s a separate nation.
Given that sterlingisation is such a foolish choice, the likelihood is that Scots, having just voted to leave the UK on the basis of a carefully worded promise of continuing to use the pound, would have it snatched away almost immediately as we find ourselves in an economic crisis. SNP Ministers are treating voters with the same respect as Lucy does when she holds the football for Charlie Brown.
How to Campaign Against People as Shameless as This.
Firstly you can share this video on Facebook and Twitter so that more people can see that SNP Ministers are trying to con them. These are difficult and complicated issues and, as in 2014, voters need to be educated on what all this talk around monetary policy means.
Secondly, avoid the temptation to play whack-a-mole. There are so many daft and dishonest nationalist positions on independence that it is important to prioritise. There is no issue bigger than the currency issue. Keep on the pressure until they have to react. Everything else flows from this: a decade outside both the EU and UK, massive cuts to public services, the loss of jobs, more expensive and scarcer mortgages…
Third, make them choose. The SNP leadership appear to back Andrew Wilson’s claim that it could be ten years of sterlingisation before we could even make a decision on establishing the new currency that voters don’t want. The other faction in the SNP says it would be an almost instantaneous decision. Which will it be: ten days of keeping the pound or ten years?
And finally, take encouragement from the fact that even the SNP know that leaving the UK and losing the pound is both economically and politically damaging. They lost in 2014 because they lacked the confidence in the basic premise of nationalism: creating separate Scottish institutions. The commitment to sterlingisation shows they still lack that confidence. That should make those of us who want to stay in the UK confident that, if we had to vote all over again, Scots will still reject Scexit.
During the referendum campaign, voters could see the SNP leadership desperately trying not to answer the question on plan B and it gave them permission to listen to their internal doubts. Today, when voters see that nationalists can’t tell us whether it would be days, weeks, or years before we lost the pound, they’ll lose confidence in nationalism again.
Ironically for a party that continually throws the accusation at its opponents, the SNP appear to believe that the public is too stupid to grasp the difference between keeping the pound as our currency and using it as the currency of what would now be another state. That same gamble didn’t pay off in 2014. Scots are still too canny for this con.
You should follow Tim Rideout, MMT Evangelist (https://twitter.com/rideouttim) and Sam Taylor, MMT Myth Slayer,amongst many other things (https://twitter.com/staylorish)
Rideout is a member of the SNP Policy Development Committee who seems to despise Andrew Wilson and his SGC report with a passion - and says that Wilsons baby is not SNP Policy...
For the SNP, one argument FOR Sterlingisation is the same old "economic levers" excuse they've used for decades. "Oh it would all be just fine IF ONLY we had full control of (insert interest rates, monetary policy, etc ad nauseam here)" After all they will have followed the will of the Scottish people in keeping "oor" pound, so nothing can be their fault, yet again. Instead, blame a heartless Westminster and BoE for not looking after Scotland's interests, just as Brexiteers are currently blaming the EU for a situation entirely of their own making.