Sturgeon’s defence and currency plans could have disastrous impact on English economy

Nicola Sturgeon says there’s a ‘choice between two futures’

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The Scottish First Minister this week moved to potentially bolster her future independent government after announcing she had been discussing a formal co-operation agreement with the Scottish Greens. The Greens are the only party other than the Scottish National Party (SNP) to both support Scottish independence and have representation in the Scottish Parliament. Speaking to MSPs, she said the SNP and Greens were exploring different policy areas they could collaborate on.

While a full coalition deal is unlikely, Ms Sturgeon said ministerial jobs for Green MSPs was a possibility.

She said: “Exactly what the content, extent and scope of any agreement will be is what the talks will focus on.”

Ms Sturgeon viewed her SNP’s election victory at the May elections – one seat short of a majority – as the mandate she needed to push ahead with Indyref2.

Although she has said her focus is on handling Scotland’s coronavirus epidemic, plans for independence and the policy details that come with it are ongoing.

Many questions remain on key aspects of a Scotland breakaway, however.

What currency the country would use, its defences, its border with England and EU membership are all things that are currently unanswered or unclear.

Ahead of the first independence referendum in 2014, the UK Government released a research paper compiled by the Economic Affairs Committee.

Without making a pro or anti-independence argument, it weighed up the economic implications for the wider UK – notably England, Wales and Northern Ireland.

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It noted that the “economic implications of Scottish independence for Scotland and for the rest of the United Kingdom are not symmetrical” with Scotland’s GDP much smaller than the rest of the UK.

The paper said an “early transitional problem” should be expected.

Vitally, however, it said the country’s plans on defence and currency could have a serious effect on the UK as a whole, meaning Scottish secession could potentially be disastrous for England.

It read: “The impact on defence strategy of Scottish independence could have significant economic implications for the rest of the UK; so also could the adoption of sterling as the currency of an independent Scotland in monetary union with the rest of the UK, as proposed by the Scottish Government.”

Defence is not devolved to Holyrood; it remains a reserved responsibility of the UK Government.

This means defence spending and priorities are under the control of Westminster, as is the operation of Scottish bases and the use of Scottish seas for military purposes.


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So too is Her Majesty’s Naval Base Clyde at Faslane, home to the UK’s four Vanguard-class submarines – that is, Trident, the four submarines, plus missiles and warheads, that act as the UK’s nuclear deterrent.

Defence is a big employer in Scotland, with anywhere from 14,000 MoD personnel based in the country.

The SNP’s 2014 independence manifesto outlined how it would remove nuclear weapons from Scotland, and join NATO and the UN as an independent member.

This has long been a contentious point.

Currency is also up for debate, with critics of independence arguing that Ms Sturgeon’s hopes of continuing with the pound sterling are misguided.

She claims that an independent Scotland would use sterling “for as long as necessary”.

One of Ms Sturgeon’s biggest opponents even after her departure from the role is Ruth Davidson, former leader of the Scottish Conservatives.

She previously said that the SNP’s plan to retain sterling would leave an independent Scotland using “the currency of what would then be a foreign country without asking, without their own central bank and without any backstops”.

Speaking to the BBC’s World at One in 2018, she said: “I’m not entirely sure that is enough for the people of Scotland to want to gamble their mortgage on, their pensions on, their wages on and their future on.”

Her comments came shortly after a report commissioned by the SNP claimed an independent Scotland should keep the pound during a transition period after any future vote to leave the Union.

Ms Sturgeon now says her eventual aim would be to create a Scottish currency when certain economic tests were met.

However, the timescale for this is “not absolutely fixed”.

Speaking during the BBC’s Scottish leadership debates, she said: “We would use sterling for as long as necessary.

“The policy would then be to move to an independent Scottish currency when the economic conditions, the fiscal conditions, the issues around trading and stability were right to do that.”

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