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Scottish independence: currency union “best” for UK

Alex Salmond says Scotland would have no problems keeping the pound. Picture: PA

Alex Salmond says Scotland would have no problems keeping the pound. Picture: PA

Alex Salmond has insisted his “plan A” of keeping the pound if Scotland votes for independence will win agreement from the UK Government.

The First Minister hinted that without a deal on the UK’s “assets” in the wake of a Yes vote in next year’s referendum, the Scottish Government could refuse to accept a share of UK debts.

He argued that an independent Scotland would be “entitled to share of the assets of the United Kingdom - at least if they want us to accept a share of the liabilities of the United Kingdom”.

Chancellor George Osborne has already said it is “unlikely’’ the rest of the UK would agree for Scotland to keep the pound in a formal currency union if the country did vote to leave the UK.

A Treasury report, published earlier this year, stated: “In the event of Scottish independence, the economic rationale for the continuing UK to enter a formal sterling union with another state is not clear.”

But in a speech in the Isle of Man - which uses its own currency, the Manx pound, as well as sterling - the SNP leader said: “An independent Scotland will retain the pound and we will use our sovereignty to negotiate a formal currency union with the rest of the UK.

“Co-operation and agreement would be required, but the things we would need to agree on would often be straightforward - for example, in relation to limits of budget deficits.”

“Best” for UK

The First Minister today insisted establishing a formal currency union would be “best” for the rest of the UK if Scotland voted for independence.

He told BBC Radio Scotland’s Good Morning Scotland programme: “There are pretty fundamental reasons why it is not going to be the case that they would refuse a formal currency union - firstly, sterling is as much our currency as it is George Osborne’s, it was actually a Scot that founded the Bank of England.

“There’s also the fact that we have paid into that financial asset of the United Kingdom and we are entitled to share of the assets of the United Kingdom - at least if they want us to accept a share of the liabilities of the United Kingdom.”

He continued: “It’s best for both countries, it’s best for Scotland because we do a huge amount of trade with the rest of the UK and it’s best for the UK because they do a huge amount of trade with Scotland.

“In fact, the rest of the UK exports more to Scotland than it does to Russia, China and India combined. It’s the second most important export market for the rest of the United Kingdom.”

Mr Salmond insisted: “We will get the formal currency union, for the reasons I’ve just stated, because they can’t claim sole title over the assets to the United Kingdom, unless of course they want us to accept no share of the liabilities of the United Kingdom, and I’m quite certain that won’t be the position of the UK Government.”

When asked if adopting a similar approach to that used on the Isle of Man could be a plan B, the First Minister said: “No. We will rest on plan A and plan A will work for a range of reasons - not least of which it is advantageous for the rest of the UK to have a formal currency union with Scotland.”

SEE ALSO:

Scottish independence: What are currency options?

 

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