Fanning the flames of currency fears

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The No side’s message has morphed from “Better together” to “Together or else!”

Questioned by the BBC’s Sally Magnusson soon after the first leaders’ TV debate, Alistair Darling refused to say what currency policy he would favour if Yes wins, saying all options were equally rotten.

Gone are the tepid acknowledgments that Scotland could make a go of standing on its own two feet.

Independence, he implies, would now mean certain catastrophe as we’re too wee, too poor and too stupid.

The three unionist parties came out against monetary union – the only thing they have agreed on for a post-Yes world – not because it would harm England but because they see it as their main scare tactic to achieve a victory for fear on 18 September.

Their attempt at a joint veto came soon after the Bank of England Governor put the wind up them by giving a sober and realistic appraisal in Edinburgh of what could make a currency union work.

Mark Carney said such a union would involve dilution of sovereignty, suggesting some oversight would be demanded by London to ensure that Edinburgh behaved in a fiscally responsible way.

It’s strange that Alex Salmond says he could live 
with such “independence-lite” while it is the No side that jibs at this manifestation of a state of affairs it otherwise recommends constantly – the best of both worlds.

The argument that such a union would put English taxpayers on the hook for a future bank bailout in a way they would not otherwise face does not hold up, since there are no systemically important Scottish-owned banks left after the 2008 crash.

There’s nothing preposterous in the idea of a monetary union between two countries, one with ten or 20 times the population of the other. The Belgo-Luxembourg monetary union lasted without controversy from soon after First World War until the creation of the euro.

Public hostility toward the idea of a currency union was non-existent in England before irresponsible politicians began trying to whip it up. At a Royal Society of Edinburgh seminar in April, Professor John Curtice said any public resentment at the idea could quickly die down if politicians ceased fanning the flames post-18 September.

By saying all possible currency plans for an independent Scotland are rubbish, Darling shows that his side will greet anything the Yes side favours – Option A, B or Z – with a raft of unconstructive abuse.

The unionist parties’ stance does a disservice to 
all the people of these islands because a currency union would be the best and
most pragmatic solution for everyone.

Stephen Nisbet

Drummond Place


The Adam Smith Institute tells us (your report, 21 August) that adaptive sterlingisation is a better option for an independent Scotland than a currency union. A key argument is that since the banks would have no lender of last resort they would act more responsibly. Am I the only one who would not find this very reassuring?

I am not qualified to challenge the findings of the Adam Smith Institute. I do, however, note that the SNP economic guru, Fraser Beveridge, in his 2013 report, highlighted the drawbacks of sterlingisation which included the fact that the Scottish Government would have “no input into governance of the monetary framework” and “limited ability to provide liquidity to the financial sector”. Indeed, he rated adopting the euro as a better option.

I know also what my answer would be to the question posed in layman’s terms by the author of the Adam Smith report in a TV interview. He asked where you would wish your money to be.

Would you want it in a bank which had no lender of last resort but which could allegedly be trusted to act responsibly as a result?

Or would you want it in a bank which had a lender of last resort – which, presumably, would be able to guarantee your deposit? I do not think many people would agree with his choice of the first option.

If there was the prospect of a deposit flight simply as the result of a Yes vote then would there not be a mass stampede in the event of adaptive sterlingisation?

Colin Hamilton

Braid Hills Avenue