Growth Report author says independence case is 'far more credible' than others

Q: The big issue this week has been the currency. You’re suggesting to keep using the pound without a formal currency union with the UK. That has been controversial for some people in the independence movement. Did you ever consider putting forward a case to use a Scottish currency straight away?

AW: I’ll put this into context first. When you put something new into the debate, especially a debate that is so entrenched as the Scottish debate has become, people who are opposed are absolutely entrenched and then you’ve got people on our own side who are pulling the same way. The focus of the report was to meet the brief – which was to come up with a plan that would be in the interest of Scotland and make the case work with a view to converting people who are convertible, in the middle, if you like.

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But also with a view to re-winning people who voted Yes in the first referendum. The brief is what is the right thing – not what is the popular thing – and the great thing about not being a politician is that I’m not seeking popularity from my constituency party or the broader movement. I am doing what the brief asks – what lessons do we learn from the 2014 referendum and from the realities of what has happened since then.

So with respect to currency, there was a reason why the case in 2014 was to promote a currency union and that’s because the judgment of the then-First Minister Alex Salmond, John Swinney and others was that it was in our best interests and there was a reason for that.

But obviously as we looked at that again we realised it takes two to tango and the UK made its position clear. So given that we asked ‘what are our options?’. We went through the options.

Our instinctive starting point was – can we make a Scottish currency work? How can we make it work and what would the implications be? And that’s why, after a very long period of consideration, we took evidence from everywhere we could find it. We read the papers produced by some of the critics you are mentioning. We read them in great detail.

READ MORE: Common Weal rejects Growth Report call to keep pound sterling

Q: Did you read the Common Weal paper on the currency?

AW: Yes I read the papers they produced. Very, very good content that sparked debate and ideas, I thought, “there are serious people there, producing big thoughts”. But when you subject it to scrutiny and when you think about it in the broader context of the whole paper and you ask yourself what would happen if you did what they say ... you would create challenges for the case for independence which I suggest would be much more uncertain and difficult to answer for people.

We actually saw an echo of it when in the week leading up to the report’s publication the speculation was we were going to go immediately for a Scottish currency. And we saw all the criticism – ‘that it was going to cost us £300 billion’ – which I don’t believe – and that is just the beginning of what would have happened.

Q: So you did give serious attention to having a Scottish currency from day one?

AW: If you look at Brexit – what is day one formally? Is it the day you declare independence? Is it the time you need to prepare for it?

So how long does it take to get to day one? It may be they [Common Weal] suggest introducing a Scottish currency on day one. But what is day one?

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You couldn’t do it unless you had a Scottish Central Bank, until you had recruited people to run it, and then people would have to say: “I’d like to hold that Scottish currency.” What would be their incentives to do it, rather than keeping hold of sterling?

When you think that through, then you think: “Who is going to fund the debt that the government needs to fund public services, to see investment in public work?” The people who are actually going to give us this money and what would they all think of the above? And that’s when hard reality hits you.

You also have to think what is the answer to the person on the doorstep who says: “I’ve got a mortgage with the Nationwide. It’s in sterling. You’re saying I’m going to be paid in the Scottish currency. Is that currency going to devalue overnight? In other words will my mortgage go up by – 10%? How are you going to stop that happening? What reserves have you got? How are you going to intervene?”.

So you weigh up all these things and you think, what is in the interests of the country? And what that takes you to is learning the lessons of a long time ago in the case of Ireland which kept the pound for quite a considerable period before moving to a peg for a long time. We say to ourselves, well, Scotland is different, but that is interesting.

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We were also interested in what Mervyn King said a year ago in March when he said what basically we have come up with – not the tests – but that Scotland could continue using the pound. What are you giving up if you don’t have monetary policy set in Scotland?

Well, I don’t think you are giving up as much as people think. The priority for the government must be what do you need to do to get growth going? How do you put right the public finances you have inherited from the UK? How do you set up the institutions?

People have jumped to conclusions – pretty lazily in some cases. We are saying we would immediately set up a Central Bank and a financial regulator, as without that you cannot begin to think of future options. So, your second test would be met very quickly.

Q: For how long did you seriously consider [the swift transition] to a Scottish currency?

AW: It took us at least nine months to a year to begin to alight on the option we’ve got now. I believe it maximises stability in transition. It’s pretty instructive to look at what happened in Quebec around its independence referendum. Because it didn’t get the right answer to this question jobs were lost. People left who have never returned, people moved their savings and investments and it never returned. This is not something esoteric which affects just high finance.

This is day-to-day bread and butter for all of us. The night before the report came out, John Curtice brought out a blog saying the vast majority of people in Scotland wanted to keep the pound. The argument that it was the prospectus that killed the vote in 2014 is clearly wrong. What was undoubtedly the case in 2014 was that people didn’t feel we were ready or that the prospectus wasn’t credible enough and that’s why we didn’t win.

Q: What would you say to people like Robin McAlpine who said: “We can’t be an independent country and use the currency of a foreign state.”

AW: Firstly, I don’t believe the rest of the UK will ever be a foreign state. I don’t regard the Republic of Ireland as a foreign state and technically speaking the British Government doesn’t either. We have to be careful about our language as I see significant ties continuing, recognising that we have heavy integration with the rUK in all sorts of ways. And I would suggest that those who want to get to a Scottish currency and not doing it with an orderly transition and not planning that orderly transition upfront makes it less likely that we will ever win – and more likely that people will see problems in the prospectus.

I think this is a quicker route and I would suggest more reflection is needed. They will get to their desired destination more quickly through the transition and route I suggested than by standing on their particular position and refusing to listen, basically convincing one another of their certainty and progressiveness rather than persuading everyone else about why it’s important. That’s a core political point.

Q: The other main criticism has been that the prospectus continues austerity and public spending cuts. Why, essentially, should people swap British austerity for Scottish austerity?

AW: It has been proven to be a total canard. I think people on the pro-independence side need to think carefully about what they are saying because they are basically providing an echo for a Labour Party attack based on a position which they haven’t read. What we set out was an absolute opposition to austerity. If the model we have suggested for reducing the deficit was applied to the last 10 years, it would have eliminated the Tory austerity cuts to the Scottish Budget.

It locks in public spending growth ahead of inflation across the cycle. What is the alternative? The alternative is that we don’t need to bother and that means that the price of your debt would be exponentially higher ... it would be a dereliction of duty to our children and the next generation and it would hurt us in the short term. If you do it this way, you secure maximum credibility and the people you are asking to give you money to fund public services will charge you less. The idea you can print money or that someone will give you it for nothing is for the birds. It’s not credible.

Q: Would George Osborne like your report?

AW: I expect not. The most frenetic opposition has come from some Unionists as they see it as a very credible and coherent plan. If George Osborne cares about politics now, I would think he would see our report as a far bigger threat to the Union than he has seen before.

What I find interesting is that some people, when they want to shout, put a badge on someone and then shout at the badge. I would encourage people to engage with the content. Some of the critics were already shouting about me individually before even seeing what I published. Their views were already fixed and I don’t think that’s good enough.

Q: Colin Fox said this week your report will drive Yes supporters into the arms of Jeremy Corbyn’s Labour Party. Is there a danger in that?

AW: No. We need to be far more self-confident in putting our case. If you believe Jeremy Corbyn and policies of keeping the UK model which has failed us all, and that borrowing more money at the expense of future generations is the solution, then you are not thinking it through and not making a strong enough argument.

If Colin Fox has a clear and alternative prospectus what does he suggest we do, how does he suggest we win support in the country? Who will fund it?

How will they fund it? What will the price of the funding be? If Colin can answer those questions – what will it mean for the pensioners, the savers, the mortgage holders? I put it to you that the vast majority of the people of Scotland will regard our prospectus as far more credible. And when put to electoral tests, that is borne out.

I have received feedback from across the political spectrum – from people in Labour, the Conservatives and the LibDems, as well as figures from outside of politics, from people who are opposed to independence, saying: “I will always oppose what you are saying publicly. But privately I believe you have strengthened the cause of independence.”

Q: Are these elected politicians?

AW: Some are, some are senior figures but not elected ...

Make sure you pick up Monday’s paper for the second part of the interview, in which we discuss Alex Salmond’s input, Brexit, borders and our chances of winning indyref2.