(Bloomberg) -- After championing the cause for staying in the European Union, Scotland’s nationalists are reigniting their effort to leave the U.K. with plans for a new currency, economic regime and an open door for immigrants.
A report published on Friday by a Scottish National Party commission made the case that Scotland should look to emulate small, better-performing economies such as Denmark and New Zealand. Like those nations, Scotland should eventually create its own currency, according to the 354-page report.
The revised vision for what would be Europe’s newest sovereign state is part of the SNP’s plan to build support for another vote on ending the three-centuries-old union with England and Wales. The question is whether the focus on the economy will help move the needle enough to put real pressure on U.K. Prime Minister Theresa May amid the turmoil of Brexit.
Another independence vote isn’t scheduled, opinion polls show the public isn’t clamoring for one and May has dismissed the idea. But SNP leader Nicola Sturgeon, who heads the semi-autonomous government in Edinburgh, regards Brexit as a game-changing event that has the potential to shift voters her way.
“Sturgeon has discovered in the last two years that, on its own at least, Brexit has so far not changed many minds in Scotland about the merits of independence,” John Curtice, professor of politics at Strathclyde University, wrote this week. “However, a reinvigorated debate about the economics of independence would seem to have the potential to do so.”
That includes the currency that would be used in an independent Scotland. The case to retain the British pound was a key battleground in the campaign for the independence referendum in 2014 that the nationalists lost. The report recommends keeping the pound for a "possibly extended transition period" without a formal monetary union with the rest of the U.K. before switching to a new currency, as yet unnamed.
Needing a Reboot
Sturgeon created the Sustainable Growth Commission in the wake of the Brexit vote to look again at independence and what it would mean for the economy.
While Scots voted 55 percent to 45 percent to stay in union four years ago, a majority also opposed Brexit -- but will be taken out of the European Union along with the rest of the U.K. in March 2019 anyway. That rejection of the U.K. government’s course prompted Sturgeon to vow to hold another independence vote after the outcome of the Brexit negotiations is known.
The debate was put on the back burner following a snap U.K. election last June, however. While May’s governing Conservatives lost their parliamentary majority, they gained more seats than expected in Scotland at the expense of the SNP.
The report is not meant to be about the timing of a referendum, but “rather, it focuses on the ‘why’ of independence and how we can use the powers it will deliver to build a stronger economy and a fairer society,” Sturgeon said before the document was published. “In so doing, it heralds the start of a debate based on hope and ambition about the future of the country, rather than on the despair of Brexit.”
Sturgeon has focused on what she calls a “power grab” by the U.K.: reducing Scotland’s authority over some policy areas when they are repatriated from the EU.
The Scottish Parliament in Edinburgh this month withheld consent for May’s main Brexit legislation. It can be overruled, but that would risk a prolonged constitutional confrontation that might strengthen the SNP as it turns back to the case for independence.
The economy divided people more than anything else during the independence referendum campaign, and within that, what currency Scotland would use. The conventional wisdom was that the “Yes” side didn’t manage to persuade enough people of its economic argument. Since then the price of North Sea oil tumbled and blew a hole in the would-be independent Scotland’s budget.
The report, entitled “Scotland: The New Case for Optimism,” seeks to address those concerns by focusing on what the nation of 5.4 million people can learn from countries of similar size. Smaller economies have performed better than the largest ones consistently over the past quarter of a century, it said.
Should it match the potential of its role models, Scots would be 4,100 pounds ($5,500) better off as an independent country, it said.
It also calls for a “Come to Scotland” package to foster immigration, since deteriorating demographics mean the country needs to increase its population more urgently than the rest of the U.K. Proposals include allowing highly-skilled incomers to offset some moving costs against tax and retaining 5,000 international graduates.
The SNP plans a series of "national assemblies" across Scotland in coming months to discuss the report’s recommendations.
“We have a great opportunity for Scotland to strike a completely different tone on a vitally important area of economic policy,” said Andrew Wilson, the economist and former SNP lawmaker who is chairman of the growth commission.
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