Currency in Scotland after 2014

Cathy Jamieson Excerpts

Wednesday 12th February 2014 Westminster Hall

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

It is a pleasure to see you in the Chair in this important debate, Mrs Riordan. It has been lively at times, and there has been more heat than light on occasions, but none the less it is about trying to ensure that we have the opportunity to discuss the important issue of currency.

I congratulate my hon. Friend the Member for Edinburgh South (Ian Murray) on his superb opening contribution. He laid out clearly and articulately the issues that we have to discuss. We then heard useful contributions from my hon. Friends the Members for East Kilbride, Strathaven and Lesmahagow (Mr McCann), for Inverclyde (Mr McKenzie), for Glasgow Central (Anas Sarwar), and for North Ayrshire and Arran (Katy Clark).

I want to pick up on a couple of points made by my hon. Friend the Member for North Ayrshire and Arran, because she articulated clearly that although many people in Scotland may have an emotional attachment to the idea of Scotland being an independent country, they none the less recognise the importance of the political, social and economic union that has existed over the years, and what an important decision this is for the people of Scotland to make in September. The Scottish National party would sometimes have us believe that everything will stay the same and nothing will change, but at the same time it tries to advance the notion that everything will change. That is not so. Increasingly, people are beginning to see through that false prospectus. A number of hon. Members spelled that out in some detail.

Increasingly, people are beginning to realise that the currency issue is important. For them, it is not just about the macro-economics, because some will, perhaps, not take an interest in that. However, they will take an interest in the money in their pay packets and in their pockets, in their ability to pay their way in the world, and in the impact on their mortgages, credit arrangements, store cards and car loans.

[Fiona O'Donnell]

My hon. Friend is summing up the debate in her usual excellent fashion. Is she struck by the views of young people, who will live with this decision far longer than any of us, particularly the youngsters in Fife who, having heard my hon. Friend the Member for Glasgow Central (Anas Sarwar), voted no yesterday?

[Cathy Jamieson]

My hon. Friend makes a valuable contribution, as always. I recognise that this is of huge importance to young people in Scotland. Obviously, young people aged 16 and 17 are, for the first time, have the vote in an important election. Of course, there are many young people here today in Parliament, including some members of the Scottish Youth Parliament, who are here to lobby on votes for 16-year-olds. I am struck by the intelligent way that young people have approached this debate. When it comes to the independence cause, they have not simply rushed to the barricades, as the SNP may, at one stage, have thought they would. They have thoughtfully debated, considered and put forward the arguments, and will come to their own conclusions, as indeed the rest of the people in Scotland will.

I have to say to the SNP that it is becoming rather tiresome to hear, every time anything is said that is not in agreement with the First Minister or his team, that we are somehow scaremongering. It is right and proper to scrutinise the proposals, including the White Paper and all the policies. [Interruption.] Indeed, the hon. Member for Dundee East (Stewart Hosie) is agreeing with me. He is an intelligent and articulate man who takes a close interest in all Treasury, banking and financial services sector issues; I gently say to him that it is rather odd that despite that, he continues to trot out the SNP line the whole time, without giving that degree of scrutiny to the proposals made by his political party.

On that point, Professor John Kay, former economic adviser to the First Minister and professor of economics at the London School of Economics and Political Science, said:

“If I represented the Scottish government in the extensive negotiations required by the creation of an independent state, I would try to secure a monetary union with England, and expect to fail…So Scotland might be driven towards the option of an independent Scottish currency.”

He also said:

“Alex Salmond has said I think rather stupidly that there is no plan B. The trouble with having no plan B is you don’t have any negotiating power if you don’t have a Plan B. So there has to be a Plan B. And Plan B has to be an independent currency.”

We are not getting that honesty in the debate, as far as the people of Scotland are concerned. That is important.

[Mr Bain]

My hon. Friend is correct to talk about scrutiny, but of course the Institute for Fiscal Studies and the National Institute for Economic and Social Research have scrutinised the White Paper and concluded that under any of the possible currency options, the pressure on fiscal policy would mean that taxes would have to rise or spending would have to fall. Would not that create more pressure on public services and the social security system in Scotland?

[Cathy Jamieson]

Again, my hon. Friend makes an important point. Perhaps the Minister will shed light on whether there has been any discussion on these issues. The SNP’s current argument seems to be that, in an independent Scotland, it will not take any of the difficult decisions that go along with that. It is not entirely clear yet what will happen to all the benefits and pensions arrangements, and all the rest of it, for some time into the distance. The idea that it will be all right on the night is simply not good enough, as was said earlier.

People have lined up to criticise the SNP’s scenario, including Brian Quinn, former executive director of the Bank of England, Owen Kelly of Scottish Financial Enterprise, Iain McMillan, director of CBI Scotland, the chair of political economy at the university of Glasgow, and the chief European financial economist, who is from a key financial institution. All those people—I do not have time to quote them—have criticised it.

I was told, although I did not hear it personally and will look closely at the transcript, that the Deputy First Minister implied, on “Good Morning Scotland”, that if an independent Scotland did not get its own way on the currency union, it would simply default or walk away from a debt. My hon. Friend the Member for North Ayrshire and Arran said that she never thought that she would see a referendum in her lifetime. In all the years I was in the Scottish Parliament, during some of which time I served as a Minister, I never thought I would hear a Deputy First Minister of Scotland shirk responsibility and say that they would walk away from a debt and put Scotland’s economy at risk. I hope that that report from this morning is not entirely accurate. If it is, I hope that the Deputy First Minister now regrets those remarks and looks again at them.

[Stewart Hosie]

Will the hon. Lady give way?

[Cathy Jamieson]

I will, briefly, just to show that I am a fair person.

[Stewart Hosie]

One of the few who is fair. In relation to the assertion that the hon. Lady and many of her colleagues have made about the Deputy First Minister—who, of course, cannot defend herself here—I am sure that the hon. Lady would agree that, if we are talking about negotiating a share of assets, which includes the central bank, we need to talk about negotiating a share of the liabilities, so we can take our responsibility for them. The UK Government and their allies cannot have it both ways. They cannot expect Scotland to take on a share of the liabilities while refusing even to negotiate on a share of the assets. Surely, as a reasonable person, the hon. Lady would agree that that makes no sense.

[Cathy Jamieson]

I have listened closely to what the hon. Gentleman says. Again, I gently suggest that if it is so important to have those parts of the United Kingdom that the SNP seems to want to retain, why on earth are we looking to break it up in the first place? Why are the Scottish Government and the Scottish Parliament not spending more time looking after the issues for which they have responsibility? Only at the weekend, there were reports about what was happening in the health service in Scotland; about the justice system—we have a proud record of a different legal system in Scotland—being dismantled, bit by bit, by the Scottish Government; and about a range of issues to do with social justice that are simply not being tackled by that Government. It would be better for the hon. Gentleman to reflect on that.

We have had an important debate. There has not been enough time, perhaps, to consider all the issues in detail, as we would have liked. I am sure that there will be further opportunities to do so. I wish to hear what the Minister has to say on this occasion; I am sure that I am more likely to agree with some of it than on other occasions, when I would be looking to put him under the kind of scrutiny that the hon. Member for Dundee East should be under today.