Alex Salmond: ‘Chancellor would bite our hands off to keep the pound’
Alex Salmond taking First Ministers Questions yesterday at Holyrood
ALEX Salmond insisted that a UK chancellor would be “biting our hands off” for an independent Scotland to keep the pound, as he told MSPs that 67 nations across the globe shared their currencies in the same way.
Mr Salmond used First Minister’s Questions in the Scottish Parliament yesterday to claim that “monetary unions” between the 67 countries bolstered the case for the SNP’s flagship policy of an independent Scotland keeping the pound alongside the rest of the UK.
However, the controversial policy was attacked by Labour as following the “poorest countries on Earth”, after it emerged that the group of 67 included such poverty-stricken nations as Niger, Togo, Chad and the Republic of the Congo that all share the CFA (African Financial Community) franc guaranteed by the French treasury.
Mr Salmond was challenged about his currency plans by Labour leader Johann Lamont and Conservative leader Ruth Davidson, who said the Bank of England “would be unlikely to give Scotland a second thought after independence” when setting interest rates, “leaving us with less control”.
The row came as Mr Salmond wrote to Holyrood party leaders and Independent MSP Margo MacDonald inviting them to participate in cross-party discussions on the referendum process, with the First Minister asking his opponents for a “positive contribution to the consultation” on the vote.
Ms Lamont attacked the SNP’s currency policy as one that would allow key decisions that would impact on mortgages, savings and pensions to be “made by a foreign bank with no remit to look at Scotland’s conditions and circumstances”.
However, Mr Salmond said there were 67 countries in the world that were using another nation’s currency, “either in formal or informal monetary unions at the present moment”, while remaining independent.
He said: “That doesn’t mean they’re not independent countries; that just means they’re in monetary unions.”
But the SNP backing for currency union, a policy that also sees war-torn Equatorial Guinea sharing the CFA franc, was heavily criticised by Scottish Labour.
A Scottish Labour spokesman said: “Some of these countries the SNP say could be an example for Scotland to follow are amongst the poorest on Earth.
“Many decent, hardworking Scots will be bewildered that Alex Salmond is asking us to follow a similar economic model to some of these countries.”
Mr Salmond claimed that Scotland has “no influence whatsoever at the present moment” over the setting of interest rates, as he said that the then chancellor, Gordon Brown, had granted independence to the Bank of England in 1997.
He said: “When the Labour Party in government, subsequently agreed to by the Conservatives, decided on a policy of independent monetary authority, they gave away any ability of politicians to control interest rates.
“So, therefore, the idea that politicians in London control interest rates now is totally fallacious.”
Mr Salmond went on to say that oil and gas reserves and the value of Scottish exports, such as whisky, meant an independent Scotland would benefit a “sterling area” of countries using that currency if it left the UK but retained the pound.
He said: “Can I give a couple of good reasons why I think any chancellor of the exchequer would accept the idea of a currency union between Scotland and England?
“Firstly, oil and gas. Scotland would get the revenues from our geographical share of oil and gas.
“Secondly, £24 billion of Scottish international exports, including £4bn of whisky exports.
“That’s why I believe, given the huge support supplied by Scotland to the sterling area, that any chancellor of the exchequer would be biting our hands off to get to such a sensible arrangement.”
Ms Davidson asked the First Minister what his “ultimate banknote of choice” would be and suggested that he would favour the “Salmond shilling”.
The Scottish Conservative leader said: “The First Minister has been telling media organisations, not just in this country but elsewhere, that the pound can be a transition currency, just like in Australia when it became independent.
“So if that is the First Minister’s transition plan, what is his ultimate banknote of choice?
“Is it the euro, much loved by him and the SNP? Or perhaps he’s planning his own currency, the Salmond shilling. The First Minister asserts that an independent Scotland would not be forced to join the euro as an accession country, when the weight of legal opinion states otherwise.
“He asserts that the Bank of England would act as a lender of last resort for Scotland, which would then be for us the bank of a foreign nation.”
Ms Lamont said that the SNP was taking “unnecessary risks” with people’s finances by insisting the Bank of England would be the lender of last resort in an independent Scotland.
She said Scots needed to have “confidence in their pensions, their mortgages, and their future”.
The Scottish Labour leader added: “Isn’t it the truth that the SNP push for separation isn’t about people’s savings, isn’t about people’s mortgages, isn’t about people’s pensions, it’s about the First Minister’s blind faith that it will be better because he says so?
“Why is he prepared to take unnecessary risks with people’s mortgages, their savings, their pensions in the midst of the worst economic global crisis since the 1930s for no good reasons, because what it will create is political separation, yes, but with less economic control, in order to serve the people of this country?”
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Comments
There are 108 comments to this article
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lebanon
Friday, January 27, 2012 at 08:58 PM..adn now AS is claiming to be able to speak for the UK Chancellor - watch out Obahma your next for the AS makeover! He wouldnt try it on Putin....would he?
supersurvivor777
Friday, January 27, 2012 at 07:58 PMCATHOLICABUSESURVIVORSNI.COM ------ form an independant scotland , part with blair witch vatican programme, dump the pound and join the euro, all the sanhedrin hypocrites like reg empty head cant criticise a democratic people and northern ireland wishes you well.
AuldLochinvar
Friday, January 27, 2012 at 07:55 PMI don't know if it's relevant to a discussion of the future Scottish pound, but I remember that young witch's Grannie, who little kenned "that sark she coft for her wee Nannie wi' twa pund Scots -- 'twas a' her riches" would subsequently "grace a dance o' witches" cf. "Tam o' Shanter"
rider000
Friday, January 27, 2012 at 06:45 PMIt clearly pays to be on the same currency as your largest trading partner to minimise transaction costs for business. So, for that reason alone the GBP has to be the currency of choice with the Euro second. I'm surprised no one within the political parties or press has discussed the ending of Brithish Summer Time that is only retained to benefit Scotland, that'll have a much bigger impact on the Scottish economy being out of time sync with the rest of the UK and more so with Continental Europe.
cat009
Friday, January 27, 2012 at 06:12 PMThe Salmond and the Sturgeon are actually frightened of going for true Independence. The "Independence" that they are "daring" to go for is actually just "Devo Max"! For real Independence would not involve retention of the English Monarch (the figure aped and adored by all Tories, whether English, Scottish, or Welsh). And real Independence would not involve retention of the UK passport and the UK currency. The Salmond and the Sturgeon are afraid of going for true Independence. They are afraid of losing the English queen, the UK pound, and their UK passports. The Salmond and the Sturgeon are frightened of daring to put themselves forward for the Presidency of Scotland, frightened of instituting a Scottish currency, and frightened of the prospect of having to set up Scottish embassies and consulates all over the globe. Their confidence in Independence extends only to what is in fact a form of "Devo Max".
Kon
Friday, January 27, 2012 at 05:25 PM102 The Trogg, no your words were "punitive sanctions" can you not remember what you said this afternoon even though its printed below? In Scotland you can just go to England or trade to England without restrictions, if you really lived in Australia then you would be fully aware that you cant just start shipping to Australia and visiting whenever you feel like it, why are you persisting with humiliating yourself?
The Trogg
Friday, January 27, 2012 at 05:10 PMSorry, Kon, but you did not mention free trade - your exact words were "punitive sanctions", which would suggest and embargo on goods. I lived for nearly a decade in Australia in the 1970s and I certainly did not see any "punitive sanctions" on trade between the UK and Australia. As I said previously you are nothing more than a troll trying to stir up discord on this thread.
LondonReader
Friday, January 27, 2012 at 04:15 PMIn the event of Scottish independence Sterling will fall in value due to the loss of underlying economic strength in the UK. The aim of currency union is to strengthen weaker economies by anchoring internal currency values to a stronger economy. It will not work with Sterling falling, as it will, even if Scotland retains the pound, due to lack of foreign confidence. Without a high degree of fiscal integration the Euro Zone is failing. Scottish cessesion from the UK will weaken England, Scotland, Wales and Northern Ireland economically and lead to knocking on the door of the Euro Zone. The conditions imposed on entry into the Euro will leave Scotland with no control over monetary policy. Think Irish budget turning up in Germany before their own MPs saw it, and you will get the idea. Merkozy and unelected Eurocrats will govern you before you know it, and all the plans for doing things differently will fall by the wayside. The distance between politics and the people will only increase.
The Answer
Friday, January 27, 2012 at 03:41 PMI would vote for 'not very well informed' to be finance minister.
Kon
Friday, January 27, 2012 at 03:37 PM97 The Trogg, did free trade stop when Australia became independent I think you mean? well yes it did free passage also stopped and only a complete and utter idiot would even think it never.
Kon
Friday, January 27, 2012 at 03:35 PM94 well informed, you think that the oil and gas (England's included) that account to a measly 2% of UK revenue will make that much of a difference? when will you learn that the £ is not based upon an unknown quantity of oil that fluctuates in price.
The Trogg
Friday, January 27, 2012 at 03:31 PM73 Kon Friday, January 27, 2012 at 11:59 AM - No, I am sorry Mr Kon, your post WAS vindictive and deliberately made to cause dissonance on these boards. It was also an extremely threatening post - please tell me, did the UK embargo Canada, India, Australia, New Zealand, South Africa when they broke away ? You are merely here to cause discord.
well informed
Friday, January 27, 2012 at 02:26 PMThe English pound will NEED Scotland to adopt it to prevent it from devaluing below the value of the Dollar and Euro!!!!
footdee
Friday, January 27, 2012 at 02:23 PMJoewood---------------------Did you get the inaccurate and fake history from the ladybird "book of English history for simpletons"
well informed
Friday, January 27, 2012 at 02:21 PM92 Why would that be a bad thing? The pound Sterling will have devalued with the loss of the UK and be worth nothing more than an English pound without Scottish assets to give it financial backing! The English pound will devalue below the worth of the Euro!!!
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