An SNP MP has been criticised for saying an independent Scotland with a new currency would need five years of “fiscal consolidation” in order to “assuage” the markets.

George Kerevan, who represents East Lothian, said an independent Scotland would need to “cut its budget coat to fit its fiscal means”, but that the results would turn Scotland into an “economic powerhouse”.

Kerevan, who is also the SNP’s sole representative on the House of Commons Treasury committee, made the remarks in an article for London-based business newspaper City AM.

Scottish Labour said the MP’s comments were “astounding”, adding: “The SNP owe Scots an explanation of where these cuts will fall.”

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An SNP spokesperson described the party’s anti-austerity credentials as “impeccable”.

Kerevan’s article, published on Monday, said that an independent Scotland joining the euro was a “non-starter” and that the UK would be “even less in the mood to accommodate” sharing the pound in a currency union with an independent Scotland than it was when the proposal was made prior to the 2014 referendum.

He went on to say that launching an independent Scottish currency would be “perfectly possible” but that successfully pegging the new currency to sterling would require selling off Scotland’s “legacy share of UK state assets”.

Kerevan continued: “However, a separate Scottish currency pegged to sterling would necessitate fiscal consolidation to assuage the foreign exchange markets.

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“It would certainly be doable, but would require independent Scotland to cut its budget coat to fit its fiscal means.”

The East Lothian MP added: “Scotland’s post-independence fiscal consolidation should take only five years (one parliamentary cycle), lifting her economy on to a high productivity, high growth path by shifting resources from consumption to investment.

“That’s painful in the immediate short term but will allow Scotland to escape the ball and chain of the UK’s endemic low productivity.”

Scottish Labour said “fiscal consolidation” was just a euphemism for “more cuts to Scotland’s public services and pain for hard-working people”.

Jackie Baillie MSP said: “At a time when our public services are already facing significant cuts, and more uncertainty with Brexit, it is astounding that a senior SNP MP would suggest making further cuts to Scotland’s budget.

“George Kerevan and the SNP owe Scots an explanation of where these cuts will fall.

“George Kerevan is the SNP’s only representative on one of Westminster’s most influential committees.

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“When he says ‘fiscal consolidation’, what he means is more cuts to Scotland’s public services and pain for hard-working people who rely on them.”

Baillie added: “Labour has given Nicola Sturgeon and the Scottish Government our full support to act in good faith to find a solution that maintains our relationship with the EU and keeps us in the UK.

“People across Scotland voted in overwhelming numbers to maintain our relationship with the EU and the UK.

“The focus and energy of the SNP and the Scottish Government should be on respecting both mandates of the people of Scotland.”

The SNP said an independent Scotland “would be free to make its own spending choices”.

A party spokesperson said: “Any change in policy on currency would be required ‎to go through the normal party processes.

“The SNP’s anti-austerity credentials are impeccable, and an independent Scotland would be free to make its own spending choices, such as not wasting potentially hundreds of billions of pounds on new Trident nuclear weapons.

“But our immediate priority is exploring all possible means to protect Scotland’s place in the EU, in line with the way people here voted, which is vital for jobs, investment and long-term prosperity.”