Nicola Sturgeon facing 'splits over currency' at SNP conference

Those opposed include the Inverclyde SNP MP Ronnie Cowan, who told the Herald: “A Scottish currency is the correct outcome but timing, just like in comedy, is everything.”

Unionists claimed the splits over currency were "a major challenge" to Ms Sturgeon.

It follows Finance Secretary Derek Mackay and depute leader Keith Brown tabling a motion to adopt the recommendations of the SNP Growth Commission as party policy.

The Commission, chaired by former MSP Andrew Wilson, proposed keeping the pound for the first decade after a Yes vote, and keeping a tight rein on public spending.

It said halving Scotland’s inherited deficit would help establish the country’s credibility in the financial markets, after which other currency options could be considered.

It set six tests for a Scottish currency: whether Scotland’s economic record was credible and sustainable; whether markets had faith in a new Scottish Central Bank and its ability to issue debt; whether the public and business wanted it; whether Scotland had adequate reserves; whether it would improve trade; and whether Scotland’s economic cycle was “significantly out of phase with that of the rest of the UK” to make it “feasible and desirable”.

READ MORE: Nicola Sturgeon facing SNP backlash over currency plans

The First Minister and the SNP hierarchy endorsed the Commission, but there was pushback from party members, particularly on the currency and being bound by UK monetary policy.

Former SNP MP George Kerevan likened it to Scotland being a “vassal state”.

The left of the Yes movement also criticised the Commission for keeping a lid on public spending, warning it was akin to continuing Tory-style austerity.

As a compromise, the Mackay-Brown motion to conference says it would be “the policy of an SNP government after independence to establish an independent currency”.

But it also says the process and precise timescale should be “guided by the six tests”, with an independent central bank reporting annually to MSPs on progress toward meeting the necessary criteria - criteria some on the Left think may never be met unambiguously.

Last month, Mr Kerevan launched the Campaign for an Independent Currency (CIC) with a scathing attack on the Commission, saying it would mean “cuts to services and spending” and could lead to keeping the pound “indefinitely”.

The CIC urged SNP branches to support an amendment to the Mackay-Brown motion axing the six tests and backing a new currency in the first term of an independent parliament.

The final agenda for the gathering has now been released and shows the CIC’s amendment will be debated and voted on alongside the Commission’s ideas on April 27.

The amendment is backed by the SNP’s trade union group and branches in Clydesdale, West Fife, Craigentinny/Duddingston, Green and Inverclyde, Stirling and Helensburgh, as well as by two elected members of the party’s National Council.

Mr Cowan, who backed the CIC amendment, said: “The currency debate is an important one and I welcome it. I would suspect that it will pass through various stages before we come to a solution.

“Regarding the conference motion I think it is important that we acknowledge that the growth commission is a discussion document and we shouldn’t be precious about it.

“I believe a Scottish currency is the correct outcome but timing, just like in comedy, is everything.

“But this is an ongoing debate and the SNP government have a good track record in seeking expert advice and making evidence based policy, this is just part of the journey to independence.”   

Rory Steel, CIC Campaign Coordinator said: "With two amendments calling for a reasonable timetable for a separate currency and scrapping the Growth Commission's tests making it onto the agenda, it's clear there is a growing appetite amongst SNP members to unchain Scotland from the chaos engulfing Westminster and to assert our independence.

"The support of Ronnie Cowan MP is extremely welcome. 

"The Growth Commission’s six tests could leave Scotland using the pound indefinitely, result in cuts to services and spending, and allow the City of London financial institutions to dictate an independent Scotland’s decisions.

"Sterlingisation and the six tests would effectively negate the very point of seeking independence. We have to campaign on an agenda of positive change.

"If there's one thing we have to learn from Brexit, it's that we have to have a concrete and clear plan. Using Sterling for the medium term followed by the creation of an independent currency lets voters and businesses know the path we are taking as opposed to the uncertainty of an annual vote in Parliament.

"We will be working to convince members to vote to seize Scotland's independence and be free from Westminster and the arbitrary caveats and stipulations of the Growth Commission."

READ MORE: Ian Blackford threatens to sue Ross Thomson over 'arms dealer' comment 

Three other amendments to the Mackay-Brown motion have also been accepted by the conference’s standing orders committee.

One calls for scrapping the six tests and moving “immediately” to an independent currency pegged to the pound.

Keeping in lockstep with sterling would ensure “continuity and stability for the Scottish people”, it says, although it could also prove a target for currency speculators.

The motion also says the “process and precise timescale for unpegging should be subject to robust procedure”.

Mr Kerevan, the MP for East Lothian from 2015 to 2017, wrote in the National this week that “disquiet in the membership has caused a big rethink at SNP HQ”.

He also said the Mackay-Brown motion, at more than three pages long, was “practically unamendable without descending into chaos”, and accused Mr Mackay and Mr Wilson of being “determined to block any commitment to a specific timetable” on a new currency.

He said: “An annual cliff-edge, ‘will they, won’t they’ debate will lead firms and lenders to freeze vital decisions on investment, till they get clarity.

“Which is why I favour a definite timetable to introduce the new currency.”

He added the Mackay-Brown motion “implies a [cutting the] ‘deficit first’ strategy which I find unacceptable. I hope the SNP membership does too.”

READ MORE: SNP economic plan would 'torpedo' Indyref2 alliance

Mr Wilson defended his currency plan at the weekend, insisting it had the best chance of winning a referendum.

He told BBC Radio Scotland his Commission aimed to offer a "more balanced view of the future, which says independence will take significant effort but that effort will be worth it."

He said: “The level of integration we've got with the rest of the UK over 300 years in financial services, in wages and pensions and mortgages is pretty unique, so we have to tend and steward the transition towards the country we want to become.

"We want to be fast growing, we want our trade to diversify from overdependence on one of the slowest growing economies in the developed world.

"But transitions need to be managed and they need to be managed honestly so that people can say as we're going through it we knew this was what was going to happen.

"We have an argument that independence will be an effort. Money doesn't drop out a tree, Rome isn't built in a day, nothing falls in your lap. That's not real life. You don't win the lottery.

"What happens is you get a toolbox and the ability to work, and that work will be worth it. It's going to be an effort, it's going to be a challenge, but all of the evidence of history in the small best-performing countries in the world is that that challenge is worth it."

READ MORE: SNP Commission U-turned on currency, says former MP

Pamela Nash, chief executive of Scotland in Union, said: “The SNP splits over currency have deepened and this is now a major challenge to Nicola Sturgeon.

“We have Nationalists who want to put salaries, mortgages and pensions at risk in the medium-term, Nationalists who want to put them at risk in the short-term, and Nationalists who want to put them at risk immediately.

“The fact that an SNP MP has backed an irresponsible and reckless proposal to scrap the pound and adopt a new currency within the first term of an independent Parliament is alarming.

“It’s now clear that the only way to save our pound and build a successful economic future is by remaining in the UK.”

Martin McCluskey, Labour's general election candidate in Inverclyde, said: "Ronnie Cowan wants to take the pound out of your pocket. His proposal would  risk the pay, pensions and mortgages of people across Inverclyde.

“Between the SNP and the Tories, people across Scotland are trapped between two parties who want to put their narrow interests ahead of the national interest.

"Ronnie Cowan could have used his time at SNP conference to draw attention to the cuts to Inverclyde’s budget, the threat to our local NHS services or the scandalous levels of child poverty in our area.

"Instead, he has chosen to put independence – and this reckless proposal to scrap the pound – first. He needs to get his priorities straight."

READ MORE: Tom Gordon: SNP’s currency plan may please members, but not voters

Scottish LibDem leader Willie Rennie said: "I feel a bit sorry for the First Minister. First the panel charged with rebooting her case for independence conceded separation would require massive cuts and now her backbenchers have decided to put their fingers in their ears and depart from reality.

“The fact of the matter is that the Scottish and UK economies are tightly bound together. With the chaos of Brexit, the last thing we need is more constitutional and economic upheaval with independence.”

Commenting on behalf of the SNP, Mr Brown said: "With independence, we can pursue a currency policy that’s right for Scotland – maximising opportunities as a successful European nation in a global economy.

"We’re looking forward to a positive, mature discussion over our country’s future at our upcoming Spring Conference, where different views can be expressed.

"Of course, opponents of self-government for Scotland would rather spurn the opportunities of independence in favour of a disastrous Brexit and continued chaos under Westminster rule."

CLARIFICATION

The Herald reported earlier that Inverclyde MP Ronnie Cowan had backed the amendment calling for an immediate move to a new independent currency pegged to sterling.

This was based on a misprint in the SNP's final conference agenda.

Mr Cowan has now confirmed he and the Greenock and Inverclyde Constituency Association voted for the amendment promoted by the CIC instead.