After the defeat of Yes in the 2014 independence referendum, many supporters saw the question of Scotland’s currency as a key weakness of the campaign. It has been a looming issue in the nearly five years since, with much of the grassroots movement demanding a bold and straightforward policy from the SNP. This came to a head in the SNP’s spring conference, where delegates clashed with the leadership over the question of a new Scottish currency.
The SNP’s original White Paper was indeed a source of weakness for the Yes campaign. The rash claim that a currency union with the UK post-independence could be taken for granted was easily cut down by Better Together, who could simply rely on then-Chancellor George Osbourne to say “no”. Rather than adapting its strategy, Yes Scotland’s official message stayed the course, telling us all how rich Scotland was and that the Pound Sterling was “Scotland’s currency too”.
Anti-independence figures like Alastair Davidson used the currency question as a key weapon in Better Together’s arsenal. Though denounced as “Project Fear”, the campaign of sowing uncertainty over independence clearly worked. While no doubt not the sole factor leading to a majority No vote, campaigners for Yes found it difficult to convince people of the White Paper’s monetary policy, and no alternative arose at the time.
SNP CONFERENCE DEBATE
Finance Cabinet Secretary Derek Mackay attributed a lack of clarity over currency as the reason Yes lost in 2014, and in introducing the SNP leaders’ new policy he asked conference delegates to think about how they might feel the day after the next indyref, if the currency debate was not properly answered.
We say “new policy”, but to many SNP delegates and independence supporters, there was not much new about it. While many news outlets touted the conference decision as significant because it was the first time the SNP officially endorsed the idea of a new Scottish currency, the leaders’ plan still heavily relies on keeping the pound.
Robin McAlpine of Commonspace called the policy a “bad fudge”; a compromise between the leadership’s determination to avoid any economic upset post-independence and the membership’s desire for a monetary policy that doesn’t bind the hands and feet of an Independent Scotland, or the next Yes campaign.
Similarly, George Kerevan – who formed a members’ pressure group to promote an independent currency policy ahead of conference – stated that the leaders’ carefully-worded resolution was “political expedience to calm the members down”.
These statements reveal a straining relationship between the leadership and the SNP membership over this one major issue. The real significance of this currency debate, however, goes back to the split over the Growth Commission report, from which the new policy originates.
SPECTRE OF THE GROWTH COMMISSION
In truth, the actual changes to the text of the currency resolution were not enormous. The resolution advocated that a decision on a new currency be taken by the end of the first term of an independent Scottish Parliament, based on the “six fiscal tests” outlined by the Growth Commission, and was amended to demanding the introduction of a new currency “as soon as practicable”.
Though the media reported it as such, clearly the SNP leaders did not feel that the amendment to their resolution was a defeat. Depute Leader Keith Brown, who was one of the heavyweights brought in to argue against the amendment, afterwards reassured spectators that the SNP policy remains a “careful, managed and responsible transition”, and that until the Growth Commission conditions are met “our currency will remain the Pound Sterling.”
So, while the amendment may not have made the SNP leaders think again, the conference debate revealed deeper division. The plans were viewed in the light of the tainted Growth Commission, whose six tests were declared “rubbish” by the delegate who introduced the amendment. Delegates spoke against the plans despite the speeches from Mackay and Brown, and months of articles and statements from the First Minister defending the “ambitious and credible” Growth Commission.
Some commenters even compared the tone and temperature of the debate to the 2012 conference when the SNP leaders oversaw a u-turn on membership of NATO, provoking discontent through the rank-and-file and the splitting off of 3 MSPs. Just as then, the leadership’s attempts to force through a policy that the majority of members are sceptical of has eroded some trust in them. While this has given some impetus to SNP supporters to advocate a different course, it does not look likely at the moment that this will find an organised expression within the party.
WHAT IS THE DEBATE REALLY ABOUT?
The currency issue is not just a dry debate about policy, but a real conflict over what independence means and the contradictory class interests at the heart of it. As we have previously argued, the SNP leaders seek a separation from the UK on the terms of Scottish capitalism. Their programme for an independent, capitalist Scotland – which is the essence of the Growth Commission report — means continued fiscal austerity, measures to make Scotland “competitive” globally and integration into the camp of imperialism, via the EU and NATO.
This programme determines the SNP leaders’ attitude towards a new Scottish currency, which they will only adopt if it is “credible” among the capitalist class. The test of credibility which the Growth Commission places on any new currency means not just faith in the exchangeability of coins and pieces of paper, but the strength of the economy which backs them.
Gone are the days when money represented gold or some unique commodity. Instead it loosely represents the value of the economy; the circulation of a currency is a mere representation of the circulation of commodities, of production and exchange. The value of the economy, of course, in reality means the total value created in production by the exploited working class .
Any new currency must give Scottish capitalists an advantage on the world market. This is the real meaning of the “six tests” and the austerity of the Growth Commission. Contrary to this, however, those who want a new currency as soon as possible do so in order to ensure the economic “sovereignty” of an independent Scotland.
It makes no sense, they argue, for Scotland to politically separate from the UK, only to have its currency, and consequently much of its economic policy be controlled by the Bank of England and the UK Government. This would not be “real independence”, in their view. This is true, of course, but would a new currency deliver “real independence”?
An independent capitalist Scotland, even if it adopted a new currency immediately, would be no more economically sovereign than any other country in the world; ie, its fortunes would be determined by the anarchy of the global market. Capitalism is a global system, and what little variations there are in individual countries are ultimately overridden in times of crisis. Welfare states are cut back, living standards tightened and counter-reforms introduced. Is this not the fate of every country in the ten years since the 2008 crisis, which started in one country and one bank?
POWER TO THE WORKING CLASS
The sovereignty of nations is thus an illusion. Marxists instead stand for the sovereignty of the working class over capital, for international socialism. For us, the question of currency, like that of independence, is linked to the struggle against capitalism. James Connolly made no specific mention of currency when he famously said England would still rule Ireland if it did not become a Socialist Republic, because the countless threads of British capitalism in Ireland would remain. Likewise in an independent capitalist Scotland, the world market will ultimately shape the life of every worker.
If Scotland is to take a new path post-independence and make a radical break with the United Kingdom and its austerity, inequality, warmongering, chauvinism and xenophobia, it must also break with capitalism. The Scottish working class must stand apart from the ruling class, not just south of the border, but here and everywhere, taking power into its own hands.
Breaking free from the confines of capitalism, a Scottish Workers Republic would be the first strike of an international revolution, spreading across Britain, Europe and the world. Only after throwing off the shackles of exploitation and oppression will words like “independence”, “sovereignty” and “freedom” have their full meaning. And in the future, money will be a mere artefact.