At their party congress, the delegates of the ruling Scottish National Party (SNP) called by a large majority to prepare for the creation of a central bank of their own.

With their vote they put the party leadership around Prime Minister Nicola Sturgeon under pressure.

The SNP had previously kept the question of a future currency after the hoped-for independence open.

An independent Scotland would continue to use the British pound “as long as necessary”, was the party's watchword.

Economists see the currency issue as a stumbling block for the independence movement.

Philip Plickert

Business correspondent based in London.

  • Follow I follow

The SNP won the election in May, but failed to secure its own majority in the Edinburgh parliament.

Since then, Sturgeon had not taken any concrete steps to prepare a new independence referendum ("IndyRef2").

But the party base is pushing.

At the online party conference, Sturgeon said she wanted to resume the campaign in the spring.

The British government in Westminster can, however, block an arbitrary referendum decided in Edinburgh.

According to recent polls, the independence movement does not currently have a majority of Scottish voters behind it.

In contrast to 2020, when a clear majority was in favor at times, according to the latest polls 53 to 47 percent are against separating from the United Kingdom.

Cutting spending would be very unpopular

The major economic uncertainties are also contributing to the subdued sentiment. Graeme Roy, a professor of economics at the University of Glasgow and a former senior advisor to the SNP government, was skeptical. "The currency is one of the key issues," he told the newspaper. "Maintaining the pound sterling would have the advantage of reducing the cost of the transition, but the Bank of England would continue to set policy rates."

Maintaining the pound parity is difficult to imagine, especially against the background of the large national deficit.

“The latest estimates show a budget deficit in Scotland of more than 20 percent of gross domestic product (GDP),” says Roy.

It will fall significantly after the pandemic.

"But even before the pandemic, Scotland's budget deficit was 8 percent of GDP," he said.

Compensating for this high structural deficit would be difficult.

Significantly cutting spending or raising taxes would undoubtedly be unpopular.

The oil and gas industry has around 100,000 jobs

During the independence referendum in 2014, the SNP relied heavily on the income from oil and gas production in the North Sea. At that time, £ 7 billion a year was predicted, which would be a lot of money for a country with around 5 million people. In the meantime, however, this source of money is drying up. The independent budget office OBR expects only about a billion pounds per year for the Scottish state from oil and gas in the future.

In addition, the SNP is getting more and more conflicted because it actually wants to say goodbye to fossil fuels.

A heated dispute is raging over the exploitation of the Cambo oil field in the sea high in the north.

Sturgeon's party is now opposed to a new production license for the field with an estimated 800 million barrels of crude oil.

The Scotland Minister Alister Jack of the British Tory government, on the other hand, supports them "100 percent".

The resistance of the SNP, which governs in a coalition with the Greens, to the development of the Cambo field is not well received in the north of Scotland.

Nationwide, the oil and gas industry offers around 100,000 jobs, which is almost 5 percent of the workforce.

If the independent regulatory authority grants a license for the Cambo field, the first drilling could begin next year.