John Ferry John Ferry

The SNP’s desperate bid to save sterlingisation

(Photo: Getty)

‘I hope the sterlingisation zombie now has a stake through the heart,’ tweeted SNP delegate Tim Rideout after getting his resolution on ‘The Scottish Reserve Bank Establishment Bill’ passed at his party’s conference last weekend.

Rideout sits on the SNP’s policy committee and is part of a faction challenging the SNP leadership’s plan for Scotland to informally use the pound for a prolonged period after secession – a policy known as sterlingisation. This faction wants to see Scotland establish a new currency, controlled by a new Scottish central bank, as soon as possible after exit day.

In his conference speech, Rideout was blunt. ‘No advanced economy has ever sought to use the currency of another nation,’ he said, adding: ‘To try to do so would be to start probably the most dangerous experiment in global monetary history.’ To his credit, he made some good points.

The SNP member is right to recognise the dangers of Nicola Sturgeon’s sterlingisation policy. Severing the Scottish economy from the Bank of England at the stroke of midnight on secession day, leaving Scotland with the type of monetary system used by small emerging market economies, has warning signs written all over it. If it didn’t lead to an economic crisis in the build-up to Scotland’s exit from the UK – as people, companies and capital flee in anticipation of what is about to hit them – then it would certainly lead to one afterwards.

Did the SNP leadership listen? Have they ditched sterlingisation? It appears not. Rideout’s motion was sufficiently amended for sterlingisation to effectively remain the party’s policy, albeit with lots of muddying of the waters to make the new-currency faction feel like they’ve made progress.

The SNP leadership’s determination to hold onto sterlingisation even though a notable segment of the nationalist base (the Scottish Greens and Alex Salmond’s Alba Party are also against it) are calling it out as dangerous might at first seem odd.

Already a subscriber? Log in

Keep reading with a free trial

Subscribe and get your first month of online and app access for free. After that it’s just £1 a week.

There’s no commitment, you can cancel any time.

Or

Unlock more articles

REGISTER

Comments

Don't miss out

Join the conversation with other Spectator readers. Subscribe to leave a comment.

Already a subscriber? Log in