Responding to the Fiscal Commission Working Group’s report on currency and operation of monetary policy, the Scottish Government has endorsed their views that a Sterling zone monetary union is the best option for an independent Scotland.
The Scottish Government’s currency paper, published today, fully endorses the findings of the Fiscal Commission Working Group’s expert report that as an independent country in a Sterling zone Scotland would have the powers needed to exploit areas of comparative advantage and also tackle those areas where we need to improve performance.
Commenting on the paper, Finance Secretary John Swinney said:
“A Sterling zone, with the pound as a shared currency will provide the full flexibility to set tax and spending decisions to target key opportunities and challenges in Scotland.
“The sharing of the pound between an independent Scotland and the rest of the UK is the common sense position supported by the Fiscal Commission. A sterling zone is also in the overwhelming economic interests of the rest of the UK every bit as much as it is in the interests of Scotland.
“An independent Scotland using the pound will mean Sterling’s balance of payments will be massively supported by Scotland’s huge assets, including North Sea oil and gas – which alone swelled the UK’s balance of payments by £40 billion in 2011-12.
“The Fiscal Commission Working Group includes two Nobel Laureates, and their expert report – having examined several possible currency options – concluded that sharing Sterling with the rest of the UK is the best option, offering freedom and flexibility for Scotland to develop our own taxation and spending policies to boost growth and address inequality.
“At present, the Scottish Parliament controls just seven per cent of Scotland’s revenue base, and that would only increase to 15 per cent under the terms of the Scotland Act. With independence, Scotland will control 100 per cent of our revenues, which is what it needs to be to build a stronger economy and fairer society.
“The combination – which only comes with independence – of keeping the pound, accessing Scotland’s abundant resources, and taking decisions on tax and other economic policies that are right for Scotland, is the best way to boost jobs and growth.
“Scotland’s finances are consistently stronger than the UK’s – generating more revenue per head than the rest of the UK in each one of the past 30 years – and Scotland has had a lower fiscal deficit than the UK over the past five years. With the additional economic levers that independence will provide, and the up to £1.5 trillion asset base provided by Scotland’s oil and gas reserves, an independent Scotland will stand on a strong financial footing.
“Next year’s vote is the choice between unlocking the opportunities independence will open up or continuing to allow economic and welfare policy to be set by a Westminster system that isn’t working for Scotland.”