Nicola Sturgeon 'must rip up her economic plan for separate Scotland thanks to dire Covid impact'

·5-min read
Alex Neil has urged Nicola Sturgeon to rethink her economic plan for independence - PA
Alex Neil has urged Nicola Sturgeon to rethink her economic plan for independence - PA

Nicola Sturgeon must rip up her economic case for independence and pledge to dump the pound to tackle the "potentially dire" impact of Covid-19 on a separate Scotland, one of her former ministers has said.

Alex Neil, a former Health Secretary, said Ms Sturgeon's economic blueprint must be "completely rewritten" as it was "difficult" to see how a separate Scotland's economy could be rebuilt following the pandemic without a separate currency or central bank.

Mr Neil also urged the SNP to rethink its policy of a separate Scotland seeking EU membership, warning this would lead to a customs border with the remainder of the UK, which accounts for more than 60 per cent of Scottish trade.

Announcing he is to stand down as an MSP at May's Holyrood election, he said Ms Sturgeon must make a "clear, unequivocal commitment" to holding another independence vote the "centrepiece" of the SNP manifesto.

He said the SNP and the pro-separation Greens should agree "an identical wording" in their manifestos to buttress their "joint mandate" for a second referendum after the election.

Mr Neil predicted that Boris Johnson refusing another independence vote would "lead to the electoral wipe-out of the Tory Party in Scotland" but urged the separatists to prepare a contingency plan in case he did.

The Scottish Parliament should pass its own Independence Referendum Bill, he argued, putting the onus on the UK Government to challenge its legality in the Supreme Court.

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His intervention came after one of the most senior members of the European Commission cast doubt on SNP claims that a separate Scotland could join the EU quickly and easily.

Frans Timmermans, the commission executive vice-president, said he was "not so sure" it would be straightforward as all member states need to agree including some who have "very strong reservations vis-a-vis certain forms of independence."

Speaking alongside Gordon Brown at a virtual session of Edinburgh International Book Festival on Friday night, he added: "As far as I can see the developments in Europe, I would not be overly optimistic."

Membership requirements would also include a separate Scotland cutting its huge deficit to three per cent of GDP and agreeing in principle to adopt the euro.

The SNP government will this week publish the Government Expenditure and Revenue Scotland (Gers) figures for 2019/20, which will disclose the country's notional deficit.

Prof Jim Gallagher, a former UK Government director-general for devolution, yesterday predicted they will show a "staggering" and worsening deficit, around four times as large proportionately as the UK as a whole.

The academic, who advised the Better Together campaign in 2014, told the Sunday Times a separate Scotland would probably start life with deficit "well over 25 per cent" of GDP - the equivalent of the Holyrood government's entire annual budget.

Although SNP party members have voted to dump the pound in an independent Scotland as soon as possible, Ms Sturgeon has continued to insist sterling would continue to be used for an indefinite interim period.

However, eminent macroeconomists have said she would be forced to dump the pound for a separate free-floating currency on day one of independence as Scotland would lack the reserves required to keep clearing the balance of payments.

Alex Neil has announced he is standing down as an MSP at next May's Holyrood election - Corbis News
Alex Neil has announced he is standing down as an MSP at next May's Holyrood election - Corbis News

Announcing his departure from Holyrood, Mr Neil said Unionists are in "disarray", support for independence is at a record high and Boris Johnson's Government is driving more Scots to back separation.

But he warned that victory for the nationalists "is not yet in the bag" and a second referendum is yet to be secured.

"If the Scottish people elect a pro-independence majority to the Scottish Parliament with a clear democratic mandate to hold an independence referendum, I do not believe that Boris Johnson would dare stand in the way of Scottish democracy," he said, predicting it would lead to the Scottish Tories being wiped out.

Mr Neil, who served in Alex Salmond's and Ms Sturgeon's governments, said any such refusal would also backfire by further increasing support for separation.

But he warned the case for independence needs to be updated from the version presented in 2014 and the economic blueprint "needs to be completely re-written, to take account of the potentially dire economic circumstances Scotland is likely to find itself in as a result of the Covid pandemic."

He said: "It is difficult to see how we can rebuild the Scottish economy without the tools available to independent nations, including a currency and central bank."

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The Airdrie and Shotts MSP, who backed Brexit in the EU referendum, said it would make more sense for a separate Scotland to join the European Free Trade Association as this would secure access to European markets without the disadvantages of EU membership.

Politicians from across the political spectrum took to social media to pay tribute to Mr Neil after he announced his departure, with John Swinney describing him as a "valued friend and colleague." However, Ms Sturgeon was silent.

His announcement came the day after Roseanna Cunningham, the Environment Secretary and another SNP veteran, disclosed she was standing down at the election. She has been an MSP then an MSP in Perth and Kinross since 1995.

Nicknamed Republican Rose for her strident views on the Royal Family, she was SNP deputy leader and ran against Mr Salmond for the leadership in 2004.

They joined a series of prominent SNP figures who have announced they are quitting next May, including Mike Russell, the Constitution Secretary.

An SNP spokesman said living in a democracy means accepting the results of elections and said Ms Sturgeon has made clear that victory next May would make it "utterly untenable" for the Prime Minister to block another referendum.

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