SCOTTISH INDEPENDENCE: Alex Salmond has said an independent Scotland will have a range of currency options but he will not give up on his “Plan A” of a currency union with the remainder of the UK.
The SNP’s plans for a currency union were dealt a major blow today as all three of the main UK parties insisted they would not agree to such a deal.
Scotland’s First Minister dismissed the threat as “bluff, bluster and bullying”, insisting Chancellor George Osborne did not speak for the people or businesses of the UK and casting doubt on the independence and credentials of civil servant who said a currency union would be “fraught with difficulty”.
He accused Sir Nicholas Macpherson, the Treasury’s permanent secretary, of being beholden to his “political masters” and presiding over a period of spiralling government debt under three chancellors.
Mr Salmond said failure to agree a currency union would impose transaction charges on cross-border trade, which would become known as the “Ed and George Tax”.
An independent Scottish currency, the unilateral use of the pound or joining the euro remain “viable options”, but a shared sterling-zone would be the best option for Scotland and the remainder of the UK, he said.
“There’s a range of currency options for Scotland. The best one we think for Scotland, and indeed for the rest of the UK, is the sterling zone,” he told BBC Newsnight.
The Scottish Government’s Fiscal Commission Working Group looked into an independent Scottish currency pegged to sterling, in a similar fashion to Denmark’s currency pegged to the euro.
Mr Salmond said: “It’s a perfectly credible option. Nobody is saying it is not. But the best option is to not have these transaction costs, an Ed and George tax of several millions of pounds for exporting to Scotland. That is simply incredible. Nobody in England is going to accept that.”
Mr Salmond cast doubt on the independence and financial record of Treasury civil servants on STV’s Scotland Tonight programme.
“Treasury civil servants do what they are told by George Osborne,” he said.
“Sir Nicholas Macpherson, in making the unprecedented publication of this advice, I think he might come to regret that step because he will be asked for his advice on other things like the consequences of withdrawal from the EU, for example.
“At one stage he actually questions the fiscal responsibility of the Scottish Government.
“In his tenure of office since 2005, under three successive Chancellors, he’s authorised borrowing of £740 billion.
“Over roughly the same period John Swinney as finance secretary in Scotland hasn’t borrowed anything.
“I’m afraid we are in a situation where the UK government departments and civil servants do what they are told by their political masters.”
He added: “I think we have to articulate the plan A.
“I think we have to explain why it’s in the interests and we can dismantle Osborne’s argument’s against it.
“We set out the options that Scotland would have in the Fiscal Commission Working Group last year, and in these options we said the best one - Plan A - was to put forward the idea of keeping sterling in agreed currency union.”
He said an independent currency, unilateral use of the pound or joining the euro remain “viable options” for Scotland.
“Obviously they are because they were set out in the Fiscal Commission Working Group, the range of options that Scotland would have, but the best option for Scotland is an agreed currency union.”
Earlier Mr Osborne came to Edinburgh and declared: “If Scotland walks away from the UK, it walks away from the UK pound.”
Mr Osborne added: “The SNP says that if Scotland becomes independent, there will be a currency union and Scotland will share the pound.
“People need to know that is not going to happen.
“Because sharing the pound is not in the interests of either the people of Scotland or the rest of the UK.”
Labour shadow chancellor Ed Balls said: “Alex Salmond is saying to people that you can have independence and keep the pound and the Bank of England, that is not going to happen.
“It would be bad for Scotland, it would place an unacceptable burden on the UK taxpayer, it would repeat the mistakes of the euro area, in fact worse, you’d be trying to negotiate a monetary union as Scotland is pulling away from the UK.”
He insisted: “It won’t happen. I wouldn’t recommend it. Scotland will not keep the pound if Scotland chooses independence.”
Chief Secretary to the Treasury Danny Alexander, a Liberal Democrat, said it was “crystal clear a currency union would create unacceptable risks both for Scotland and the rest of the United Kingdom”.
He stated: “I couldn’t recommend a currency union to the people of Scotland and my party couldn’t agree to such a proposition for the rest of the UK.”