Now is the time for a detailed plan for Scottish independence

The writer is a founding partner at strategic consultancy Charlotte Street Partners and chairs the Sustainable Growth Commission

Independence for Scotland is more likely now than it has ever been. Not yet inevitable, but increasingly likely. Since June there have been 20 opinion polls and every one found a majority of people living in Scotland in favour.

Increasing numbers of Scots trust the Scottish government more than the UK government on domestic matters of public service as well as on navigating the bigger issues of climate crisis, the changing role of government and its financing and, indeed, the nation’s relationship with the EU and place in the world.

During Scotland’s 2014 referendum, the pro-Unionist “Project Fear” focused on the risks of independence, including, ironically, the risk that an independent Scotland would not automatically be in the EU. Now the case for the status quo looks ever riskier.

The UK’s economic performance last year appears likely to have been among the worst in the OECD group of 37 industrialised countries. Pro-Union campaigners are struggling to articulate a positive case for the more than 300-year-old Anglo-Scottish union in the face of today’s political and economic realities.

All that Scots hear is that the starting point is too poor and that the transition would be too hard. Life as it is, they are told, is as good at it gets. Scots used to buy this perspective and added on top their own positive sense of the story of the UK and their part in it.

Brexit changed this, both the fact of it and the manner of it. It was a populist campaign without any prospectus or detail on what would happen next and a result which a significant majority of Scots didn’t want. This and the handling of the pandemic have changed many minds. 

Whether they remain changed and are joined by others will in part depend on the quality and conduct of the pro-independence argument. If the nationalists take the populist low road of the Brexiters, it is unlikely centre-ground Scots will be persuaded. Produce a prospectus that is honest and clear about the transition, timings and trade-offs, as well as positive about its vision of why this matters, and the Yes side could win big when the choice is put. 

Material benefits could accrue quickly, but the full impact of any reform strategy to emulate the best-performing small countries like Denmark will take time. Rome was not built in a day after all, but it was worth building. 

On currency, the Scottish National party proposes to retain sterling for the transition period required to ensure that the country is ready — and clear tests met — to launch its own currency. This means that its new central bank will not have the full responsibilities of the Bank of England, just as national central banks inside the eurozone do not.

It means monetary policy will stay with the BoE for this period, while Scotland focuses on creating the new institutions that are needed and governing well. When those tests are met, it will be an emblem of success. What this means, of course, is that on matters of currency and monetary policy there will be no immediate change with independence but an orderly transition over time. 

On public finances, Scottish tax revenues cover the equivalent of the entire Scottish government budget plus social security and pensions payments in Scotland. Any deficit reflects UK government programmes which could be replicated or not.

The pandemic has demonstrated that there is an appetite in debt markets for government bonds at historically low interest rates. The priority everywhere now — as even the IMF entreats — is for investment that lays the ground for reform and future economic vibrancy. 

Scottish public finances will have to be brought to sustainable levels over time. This can be done purposefully, but without the self-defeating austerity strategy that most economists now agree was a UK policy error after the 2008 financial crisis. 

The SNP also proposes to pay an annual solidarity payment to the rest of the UK to cover a negotiated share of UK legacy debt interest, taking account of asset distribution and any joint programmes that continue.

That leaves the question of borders. Brexit imposes new ones to Scotland’s east and west. They are of the UK government’s making. How they are functioning will be clear by the time of a future referendum. The trade-off and choices involved will be for Scots to judge. 

The choice will come. There is no question that choosing will carry trade-offs and challenges to weigh up, whatever the decision. Independence would be hard work and effort — anything worth having always is. It would not be easy, but more and more Scots believe it is worth it.