This was interesting. One takeaway was the reveal - more a confirmation - from @AndrewWilson that a key leverage point for an SNP gov't in any future separation negotiation would be to threaten to walk away from accepting an effective fair share of UK debt. Thread 1/ https://twitter.com/instituteforgov/status/1331533066125406208

Leaving aside how morally repugnant it would be to leave that debt solely as the responsibility of the people of the remaining UK just after a pandemic in which the UK has borrowed so heavily to save lives & jobs in Scotland, it's also revealing of SNP strategy in another way. 2/

The SNP's currency strategy for secession is 'sterlingisation' - unofficially using the £ outside a monetary union. But it's now widely accepted that this plan is fatally flawed as it would create an economic crisis & likely bankruptcy for the new state. 3/

Sensible folk, even on the pro-separation side, are pointing this out in explicit and detailed terms, as seen in this piece from Open Democracy 4/: https://www.opendemocracy.net/en/oureconomy/snp-must-rethink-its-economic-model-independent-scotland/

In the words of one of Scotland's most senior economists, the SNP's plan would lead to a "classic currency crisis" & "national bankruptcy" (Prof McDonald, Glasgow Uni). Wilson & senior SNP colleagues will understand this (they're far from stupid), so what's really going on? 5/

It could be that Wilson & co. fully understand the catastrophic implications of their plan & are ready to accept that as an acceptable price to pay, but I suspect they're actually betting (as in 2014) that the UK will capitulate & offer a formal monetary union. 6/

@NicolaSturgeon has also hinted heavily at this. See this part of this interview with @afneil:



7/

So, might currency union still be the real hope? If it is then it takes wishful thinking to a new extreme. The UK gov't ruled this out in 2014 for pragmatic reasons, in that it would have many structural downsides. 8/

Reading again the Treasury's advice to the UK gov't in 2014, it's clear that a monetary union with a politically & fiscally independent Scotland would be risky & would push up Gilt yields - a big no with current debt levels. 9/ https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/279460/Sir_Nicholas_Macpherson_-_Scotland_and_a_currency_union.pdf

To sum up, it's either a case of 2014 wishful thinking redux, or sticking rigidly to a plan that been shown conclusively to be a disaster waiting to happen for the people of Scotland.

Either way, it's not pretty. 10/Ends