I HAD to read Derek MacKay’s article in Saturday’s National twice, because it is entirely contradictory (Timing must be right for our new currency, April 6). He acknowledges that the Scottish people making the important economic decisions is fundamental to independence, yet he thinks they should refrain from making a vital decision on their own currency until the “optimal point of change”.

Now I know a thing or two about economics, but I have no idea what the “optimal point of change” is, or what it means. I suspect it means waiting until the “economic experts” tell you it’s OK. I don’t know who these ‘“economic experts” are, but I suspect they are the same ones who led the UK into the financial crisis in 2007.

He tells us that “keeping the pound” is likely to persuade more voters to back independence. Well it didn’t do that in 2014. Indeed it is considered to have been one of the main reasons why we lost the vote.

We are currently entangled in sterling and we will be when the Scottish people vote for independence, as they will I’m sure. We will also have to use the pound for some time after political independence, possibly around

three years – not to wait for the “optimal point of change”, whatever that is, but for the very practical reason that we do not have a central bank or the necessary financial institutions which we will require to set up before we can introduce our own currency.

It is obvious and elemental to me that in the campaign running up to an independence referendum both Derek and I will be able to unite in telling campaigners that we want the New Scotland to have its own central bank, reformed banking system and as soon as practical a new Scottish currency. We will both have to acknowledge that we will have to carry on using sterling for some time after political independence in spite of the weakness of sterling (mainly resulting from the Brexit chaos); but we can promise them they will get a new and cleaner currency as soon as possible. I think the Scottish people will appreciate that.

After we win our independence Derek can explain to us what the “optimal point of change” means when we are setting up the financial institutions in the Scottish Parliament, and I can explain why we should have a clean full-reserve domestic currency and a reformed banking system which will be debated in the independent Scottish Parliament. As Derek says, the decisions on this will be made by the Scottish people. One good thing about debating this at that time is that the Unionist media will not be around to distort the issue.

Andy Anderson

LIKE Derek Mackay, I too am looking forward to debating plans for the currency in an independent Scotland. The debate, however, should be more about the nature of the currency than the timing of its introduction.

I agree with him that the currency must serve the economy. The conclusion that I draw is that in order to plan and manage our economy, a new Scottish Government must be in control of its currency and the sooner the better.

All the evidence from 2014 and from the shambolic Brexit negotiations points to the fact that we cannot depend on the goodwill of the British state when we are setting up our new country. It would therefore be folly to use sterling for a moment longer than it takes to establish all the necessary infrastructure to create and manage our own currency. It is inconceivable that the Bank of England or the rUK Treasury would pay any heed to the interests of the Scottish economy when taking financial decisions.

To convince voters to vote for independence, we need to have a clearly set out programme on currency. The steps for setting up a currency are all well documented. That way, everyone will be clear about what is going to happen and can plan with confidence accordingly. The last thing that we need is nebulousness about applying six vague and largely irrelevant tests before we summon up the courage to make the necessary change. That simply allows opponents to portray us as not being properly prepared, and will be difficult to sell on the doorstep.

Julian Smith
Limekilns, Fife

I REMEMBER reading the signs on the beaches during a recent visit to California about the dangers of rip tides – the strong currents which pull unsuspecting swimmers out to sea. There are actions to follow should we get caught in one of these currents, but the best advice is not to get into one in the first place.

Lifeguards place red flags on the narrow band of shoreline signalling to bathers to stay away. The instructions are obeyed because there is a general acknowledgement that the knowledge came at human cost.

Derek Mackay’s seeming willingness to keep an open-ended sterling arrangement would needlessly put Scotland at the mercy of very strong economic currents.

No matter how hard we tried to grow an equitable economy, we would be up against the rip tide of sterling money markets, a monetary policy decided by a a government we didn’t elect and a casino-style banking system. We would

have no financial buoyancy device in the event of a financial crisis and no bank deposit insurance to keep the heads of Scottish citizens above water.

Bitter experience has shown that no matter how hard one attempts to swim against the rip, the shore remains distant. Similarly the longer the delay in adopting our own currency, the further we will drift away from the “optimal” conditions the SNP Gowth Commission seeks, and the more painful the exit will be.

It’s not like we haven’t seen the warning signs. The red flags were planted long ago by the likes of professor Wynne Godley, who said: “The power to issue its own money, to make drafts on its own central bank, is the main thing which defines national independence. If a country gives up or loses this power, it acquires the status of a local authority or colony. Local authorities and regions obviously cannot devalue. But they also lose the power to finance deficits through money creation while other methods of raising finance are subject to central regulation. Nor can they change interest rates.”

Godley was talking about the Eurozone and we have seen how it has played out. There should now be a basic level of knowledge amongst anyone with an interest in macroeconomics that giving up control of a national currency means that a nation isn’t independent at all.

Scott Egner