WHATEVER else the SNP government’s new publication A Stronger Economy with Independence is about, it is not about independence. This publication, the third in the series, would have an “independent” Scotland firstly chained to the Bank of England by sharing a common currency with the remainder of the UK until (at some unspecified date in the future) it creates its own currency. This is necessary for the next big step in Scottish liberation — membership of the European Union.

More on the currency issue later, but let’s start with some common ground. Nobody from Rishi Sunak-supporting Tories to the Communist Party of Britain (Marxist–Leninist) would deny that current performance of the Tory government is anything less than shambolic.

But, and I am sure CPB-ML would agree with me here, there is an enormous difference between the capitalist system and its managers, or in this case, bad managers.

Either naively or deliberately the SNP obscure this distinction. The document refers to the UK economic model or Westminster system as if it were a malignant form of otherwise benign condition: “The consequences of all of this for Scotland — if we stay part of the Westminster system — will be damaging and long lasting.”

By contrast the SNP portrays the EU’s “model” as a haven of economic prosperity and social justice. So, in advocating a journey to the EU the SNP has to disguise the reality of a supra-national, undemocratic institution whose raison d’etre is advancing the interests of big capitalists in its largest member states.

A quick glance at the speech of Luca Visentini, the European TUC general secretary, to the EU Tripartite Social Summit for Growth and Employment last week, would give a much more accurate understanding. In it he warns of the consequences of the war in Ukraine.

“The crisis following this horrible war is bringing an escalation of energy prices, high levels of inflation, and disruption of supply chains, so putting at enormous risk companies and jobs, and pushing people into poverty... [We also see] nationalism and egoism re-emerging, with the richest countries introducing measures of support just for their own citizens and businesses, while opposing any common instruments at EU level.”

And yet for the SNP, the EU, through its Stability and Growth Pact (SGP), will create the conditions necessary for everyone in Scotland to prosper. Class conflict, apparently, will disappear and through partnership models Scotland will develop an economic consensus.

“We will use the full powers of independence to build an inclusive, fair, wellbeing economy that works for everyone in Scotland, allowing Scotland to develop the kind of inclusive consensus-driven economic policies that serve other European countries so well.”

A word on the SGP. It is currently suspended until 2023 because of the Covid crisis, which speaks volumes for its flexibility, or rather lack of it. All EU member states are automatically members of the SGP. Until its suspension each member state had to implement a fiscal policy that ensured the country stayed within the limits on government deficit (3 per cent of GDP) and debt (60 per cent of GDP).

Actually, both France and Germany broke these rules without consequences, but smaller countries like Ireland were subject to the punitive Excessive Deficit Procedure. It may be that these rules are relaxed somewhat in 2023, but it is evident that Scotland would have great difficulty meeting a 3 per cent deficit level without making savage reductions to its public spending.

The Government Expenditure and Revenue Scotland (GERS) statistics shows that Scotland’s deficit stands at 12.3 per cent of GDP — a drop of 10 per cent on the previous year — but that is a long way from the 3 per cent required by SGP.

There is not a hint of the economic pain that Scotland might need to endure to achieve such deficit reductions and in this, this paper is less honest than the SNP’s notorious Sustainable Growth Commission report of May 2018.

That document concluded: “An independent Scotland would need tight public spending rules to bring the country’s deficit down from around 6 per cent in 2021-22 to below 3 per cent over a period of 10 years.” Note at that point the SNP believed it would take 10 years and the deficit was half its current level.

And that takes us to the contested issue of currency, for although there is no direct link made between the point at which an independent Scotland could safely move to its own currency, it is reasonable to assume this would coincide with meeting the other criteria for EU membership.

It is generally accepted that the SNP’s failure to be convincing on currency was a significant factor in losing the 2014 referendum on independence. Like much else in this document, the objective is to create a sense of a painless transition from where we are to the Caledonian dream of a prosperous, conflict-less Scotland:

“[We consider] the need to be fiscally credible and maintain market confidence, not least in the process of establishing a Scottish pound… as we seek to build a country that is more prosperous, sustainable, fair and equal.”

The paper makes it clear that from day one of independence, Scotland would continue to use Sterling as its currency until the transition to a Scottish Pound, but this is highly problematic for two reasons. As we have seen it may take a long time for Scotland to achieve the level of economic stability deemed necessary by the EU and as the economist Wolfgang Streeck points out in an interview in Conter: “A member state that uses the same currency as a non-member state, above all Britain, is entirely out of the question.

“I also don’t understand why the Scots should leave the UK and remain with respect to monetary policy subject to what would then be a perfect dictatorship of the Bank of England. In monetary terms Scotland would practically remain part of the UK, without any representation in the UK Parliament.”

It means, for example, that Scotland could not control interest rates or quantitative easing, which lowers the interest rates on savings and loans. These would be decided by the Bank of England on the basis of the needs of UK economy.

This would also have implications for Scotland’s fiscal policy — taxation and public spending. In other words, the very levers Scotland requires to become “prosperous, sustainable, fair and equal” would not be available to it.

There is a good deal more could be said about this paper, for example the assertion that only independence would allow Scotland to take a more progressive stance on conditions of employment or immigration when an enhanced devolution settlement as well as more effective use of existing powers could have exactly the same results.

In this and other areas this document from the SNP is entirely unconvincing. Scotland needs a serious alternative economic and social strategy, not wishful thinking.

You can read analyses of the SNP’s first paper at www.mstar.link/Mills  and www.mstar.link/SNP22.