SNP has just dealt with one reason why it lost 2014 independence referendum – Ian Swanson

Sterling would remain Scotland's currency for a transition period of around five years under the SNP's new plan. Picture: John Devlin
Sterling would remain Scotland's currency for a transition period of around five years under the SNP's new plan. Picture: John Devlin
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SNP tackles its weak spot over what cash you would have in your pocket after independence, writes Ian Swanson.

AS the clock ticks down on Brexit – just 24 days now until the UK is due to leave the EU – the deadline is also looming for Nicola Sturgeon to set out her position on a second independence referendum.

The First Minister has promised to outline the “next steps” on Indyref2 once the Brexit situation becomes clearer.

Opinion polls still do not suggest there is a majority in favour of independence and it seems clear the UK Government would refuse the necessary Section 30 order to allow Holyrood to call a referendum.

But the SNP is talking once again about what would happen after a Yes vote for independence. The party’s depute leader Keith Brown and Finance Secretary Derek Mackay are to put a motion to the SNP conference next month proposing a new policy on the currency which an independent Scotland would use.

At the 2014 referendum, the currency was seen as one of the SNP’s weak spots. The party argued an independent Scotland would carry on using sterling as part of a currency union and appeared to have no Plan B when all the UK parties ruled out any sterling pact.

It was the issue which helped Alistair Darling, as leader of the Better Together campaign, to score his surprise victory over Alex Salmond in a key TV debate.

“Any eight-year-old can tell you the flag of a country, its capital and its currency,” said Mr Darling. “You can’t tell us what currency we will have.”

Now the SNP seems set to agree Scotland should have its own currency after independence – though it would continue using sterling for a transition period of around five years.

The party’s growth commission, led by economist and former MSP Andrew Wilson, proposed in its report last year that Scotland should halve its deficit before moving to its own currency and warned that could take up to ten years and involve robust constraints on public spending. The report sparked controversy within the party, with claims its approach amounted to a continuation of austerity.

But now Mr Mackay insists leaving the UK would allow Scotland to boost economic growth, the deficit could be reduced more quickly and a decision on a new currency taken within the first five years of independence.

Opposition parties have accused the SNP of “fantasy economics”. Tory finance spokesman Murdo Fraser says the idea a £13 billion deficit could be halved in a few years without unprecedented cuts, higher taxes or increased borrowing is “absurd”.

Some have interpreted the SNP’s move towards a new currency policy as a sign that Ms Sturgeon’s Indyref2 update may involve some genuine move towards holding another referendum.

Announcing plans to seek a Section 30 order from the UK Government in the knowledge it will be refused could be seen as a way to galvanise the grassroots and set the agenda for the next Holyrood elections in 2021.

Whether or not the change of stance on the currency is a prelude to the launch of a referendum bid, it is ­significant and positive that the SNP is actively addressing one of the issues which undermined its case in the 2014 campaign. Now it also needs to turn its attention to the other questions voters still feel were unanswered last time – which includes pensions and future relations with Europe.