Sturgeon’s £8.5 Billion Austerity Drive in Event of Scottish Independence

Forget £350 million a week for the NHS; an independent Scotland would be forced to find a huge £8.5 billion down the back of the sofa due to their 8% deficit. A report by the Institute for Government warns it would also “almost certainly be more expensive for Scotland to borrow than for the UK” as a result of higher interest rates. David Cameron might have some advice on swingeing cuts…

The report brings further bad news on the question of an independent Scotland’s currency. Earlier this week, deputy first minister John Swinney said the country would eventually move towards a “distinctive currency”. This, the report warns, would provide the greatest freedom, though at the cost of leaping into the unknown:

“a new, free-floating currency would be the most unknown quantity of the options that would be available to Scotland after independence. It would probably take time for the new currency to gain credibility with, and enough liquidity in, foreign exchangemarkets and for the new government to build a reputation for sound macroeconomic policy and a commitment to the independent management of monetary policy. Without those, the currency’s value would be more vulnerable to speculation. Resulting currency volatility could impart shocks to the real economy.”

In a week where Scotland had to beg the UK MoD for help in the wake of their national ambulance crisis, it might not be the best time for Sturgeon to make the arguments of going it alone…

mdi-tag-outline Institute for Government Scotland SNP
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