CHANCELLOR George Osborne is drawing up plans to block an independent Scotland from retaining the pound, it has been reported.
The Westminster government has already said the SNP’s plan to have a currency union, where an independent Scotland and the UK share Sterling, was unlikely to take place.
However, Mr Osborne is now understood to be planning to effectively force an independent Scotland out of the sterling zone by imposing onerous economic conditions on the nation.
The conditions could include the UK government having complete oversight of an independent Scotland’s budget and having the power to veto certain taxes.
A UK government insider was reported to have said: “Mr Osborne does not want the UK’s economic recovery jeopardised by a country which he has no control over.
“He’s adamant you can’t have a fiscal union without a political union. It’s not going to happen.”
The Chancellor is said to believe that forcing an independent Scotland out of the sterling zone would force the nation to accept the euro as its currency – a move that would prove unpopular with voters.
However, a spokesman for Scotland’s finance secretary, John Swinney, dismissed the claims as “ridiculous” and as “scare stories”.
The spokesman said: “The people of Scotland are getting sick and tired of the threats and scare stories coming from Westminster.
“This is just another example of the self-proclaimed “project fear” campaign in action.
“These anonymous attempts to bully Scottish voters are ridiculous.”