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Scottish independence: Business leaders back pound

Plan for sterling area in the interests of rUK as well. Picture: Ian Rutherford

Plan for sterling area in the interests of rUK as well. Picture: Ian Rutherford

  • by EDDIE BARNES
 

A GROUP of leading Scottish business figures argue today that it would be in both Scotland and the UK’s interests to maintain a currency union after independence for “the foreseeable future”.

In a letter released today, the business figures – who largely have already indicated their backing for independence next year – say they believe it is “clearly” the case that both Scotland and the rest of the UK would want to retain a currency pact.

Such a deal would mean that, after independence, both nations would continue to use the pound, with interest rates and monetary policy set and controlled by the Bank of England.

Backers of the plan include Jim McColl, founder of Clyde Blowers, entrepreneur Tony Banks and Dan MacDonald, chief executive of MacDonald Estates.

The proposal to keep the pound was a key pledge in the SNP’s white paper last week, as Alex Salmond insisted he did not plan a change in the currency used by Scottish people and firms.

But the plan has been challenged by both Chancellor George Osborne and his Labour shadow Ed Balls, who described it as “unlikely”, given the complex negotiations that would needed to make it work.

Pro-independence supporters, including the Greens, have also warned about the consequences of such a plan, saying it would limit what a newly independent country could do.

Former prime minister Sir John Major said last week that Scots keeping the pound would imply the rest of the UK would have to stand behind Scotland’s borrowing and debts, and therefore “could not” happen.

But writing in a personal capacity, the 11-strong group today backs the SNP’s case, insisting the plan would work.

The other business figures who signed the letter include Sandy Adam, chairman of Springfield Properties; Martin McAdam, chief executive of Aquamarine Power; Ivan McKee, director of Greenfold Partners; investment fund manager Angus Tulloch; Dr Jim Walker, founder of the Hong-Kong based Asianomics consultancy; and Michelle Thomson, a director of the pro-independence Business for Scotland group. Scots author Michael Fry is also a signatory.

They write: “No matter one’s views on the referendum, it is clearly the case that Scotland and the rest of the UK should maintain a sterling area if there is independence.

“We support the Scottish Government’s inclusion in the white paper of a sterling area and common market for the free movement of trade, money, goods, services, capital and people. This is what’s on offer to voters.”

They add: “It is in the interests of Scotland and the rest of the UK – the financial firms, wider business community and the people – to maintain the same currency. Many Scottish firms have the vast majority of their customers south of the Border, and Scotland is the second largest export market for English business. The strength of sterling in part relies on Scotland’s North Sea oil and gas reserves.”

However, the UK government has sharpened its opposition to such a pact in recent weeks, with Scottish Secretary Alistair Carmichael having described it as “highly unlikely”.

An SNP spokesman described the letter as “a very welcome intervention from the business community, reflecting the commonsense position”.

Meanwhile, independence campaigners yesterday claimed the No campaign was fighting “like ferrets in a sack” following reports that senior Tories were critical of former Labour chancellor Alistair Darling’s leadership of Better Together.

Mr Darling was accused of being “comatose most of the time” by unnamed Conservatives, who said the campaign had “no fire in his belly” , leading to Yes Scotland suggesting that Better Together campaigners were turning on each other.

Yesterday, Downing Street sources said the views expressed by the anonymous Tories were “100 per cent wrong”.

David Cameron’s official spokesman said the Prime Minister “thinks Alistair Darling is absolutely the right person to lead the campaign”.

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