If Scotland were to vote for independence, it would face a whole host of problems. Would it have an army? An intelligence service? Both would have to be established. A tax collection agency? A financial regulator? Numerous new civil service departments would have to be established, including a Debt Management Office, to run its borrowing operations, a foreign service, complete with embassies in all major international capital cities and so on and so on. All of these would have to be conjured, in a tedious and expensive logistical phase that would come immediately after independence.
But though substantial, problems such as these are not big enough to knock out the whole pro-independence argument. Setting up structural governmental apparatus would be a draining exercise, and after the euphoria of winning independence, the tedium of the task would come as a sharp back-to-earth-with-a-bump corrective to the jubilant Holyrood mood. The language of hope and aspiration would very quickly turn to that of hard slog, of tasks that lie ahead and of jobs only half done.
But if these circumstances were ever to arise, then the resilience and intelligence of the Scottish people would be more than enough to deal with the consequences. The SNP might go into a period of political frailty, but it would do so knowing that its principle objective had been achieved and that the constitutional alteration to Scotland would be irreversible. Almost all of the problems Scotland would face would be solvable in the short to medium term.
Almost, but not all. It’s hard to overstate the problem faced by the SNP over the pound. It knows that it cannot go into the referendum offering to take Scotland into the euro. That would be a catastrophe and Salmond knows it.
Likewise, claiming that an independent Scotland would establish its own currency would blow a hole in all of his party’s economic planning. The question that kills the idea of issuing a New Scottish Pound is simply—what would it be worth? The answer is that nobody can know for certain, but that on the balance of probability it would suffer a substantial devaluation relative to the UK pound and would be prone to bouts of dangerous volatility.
Which brings the argument back to sharing the UK pound, which this week the Chancellor, Shadow Chancellor and Chief Secretary to the Treasury made clear in a rare show of party unity,…