Sturgeon lost the vote to drop the pound at the SNP conference in Edinburgh
Supporters at the Nationalists’ conference in Edinburgh last night voted by a slim margin for a breakaway country to dump sterling for its own currency “as soon as practicable”. Miss Sturgeon and the SNP leadership lost by a narrow 52 votes in the crunch ballot amid a rebellion over their new economic blueprint for separation. The close result was a snub to the First Minister who had argued for a more gradual transition – warning Nationalists just days ago a swifter switch would not “be credible”. The SNP’s official policy is now to replace the pound with a new currency – a U-turn on its position during the 2014 referendum. Delegates had been asked to back proposals put forward by deputy leader Keith Brown and Finance Secretary Derek Mackay based on last year’s Growth Commission report.
Their motion stated the currency of an independent Scotland “should continue to be the pound sterling” until a separate currency “can be safely and securely established”.
Under their plan, a decision on whether to establish a new currency be taken during the first five-year term of the Scottish Parliament following secession.
But after a vote on the conference floor, this paragraph was deleted and replaced by one calling for the new currency to be ready for launch “as soon as practicable after independence day”.
The amendment, by the SNP Dalkeith and district branch, was passed by 781 to 729 votes. Activists ignored pleas by party bosses no to alter the motion.
Mr Brown had warned delegates that backing a quicker move to a new currency risked making independence a harder sell.
Finance Secretary Derek Mackay
“We have to bring more people with us if we’re going to move beyond 45 percent,” he said.
“Going harder and faster in my view would damage that case and fail to win new support.”
Backing the original motion in a pro-independence newspaper last week Miss Sturgeon said it was “not credible” to suggest that new financial institutions, such as a central bank, could be set up immediately after independence.
Following last night’s vote, SNP sources said that while the amendment could mean Scotland moved to a new currency faster, it did not alter six financial tests set by the Growth Commission.
These include the creation of a new Scottish central bank, cutting the country’s budget deficit to a sustainable level and building up “sufficient currency reserves” – a process that could take years.
Mr Brown warned that backing a quicker move to new currency risked making independence a hard sell
MIiss Sturgeon put a brave face on the vote Tweeting: “We can move forward now with confidence to make the case for Scotland’s future in Scotland’s hands.”
Mr Brown claimed the party now had a “clear platform on which to campaign and win the case for independence”.
Speaking in favour of the amendment delegate Timothy Rideout said the use of sterling means monetary policy such as interest rates would all be set in London.
“We would not have real independence,” he said. He also said the six tests were “rubbish”.
Those in favour of ditching the pound more quickly also included former SNP MP George Kerevan, who said using it without a central bank could be a “major time bomb” for Scotland’s economy.
“If you’re going to go to the Scottish electorate and say ‘We want a Scottish currency,’ you’re going to have to tell them when,” he said.
“Leaving the door open will lose votes, not gain them.”
Other amendments calling for a new currency to be launched straight after independence or during the first parliament were rejected, as was one calling for a time limit on debt repayments to the UK.
But Pamela Nash, the chief executive of pro-UK group Scotland in Union, said: “The SNP has voted to fast-track its plan to scrap the pound and put salaries, mortgages and pensions at risk.
“In a huge challenge to Nicola Sturgeon’s authority, members have snubbed her proposal and voted to complete this reckless act even sooner than she wanted.
Miss Sturgeon lost by a narrow 52 votes in their bid for independence
Scottish Tory interim leader Jackson Carlaw said: “This is a profoundly embarrassing snub for the SNP leadership.
“And it shows that Nicola Sturgeon is now at the beck and call of an extreme economic agenda within the SNP which would rip the pound from our pockets as soon as possible.”
In the run-up to the independence referendum in 2014, Alex Salmond insisted Scotland would keep the pound as part of a “currency union” with the rest of the UK.
But the Tories, Labour and the Lib Dems all confirmed that they would not approve a pound-sharing deal.
Uncertainty over currency was viewed as one of the reasons Scots voted by 55 per cent to 45 per cent against leaving the UK.