Indy indulgence

Hugh Reilly (Perspective, 26 August) surely understands that, in a modern financial system, a currency mechanism is far, far more complex than simply using bank notes to pay for a restaurant meal.

Just to remind him, by the way, private Scottish bank notes are acceptable only because they are backed by Bank of England bank notes safely stored in Bank of England vaults.

What chance a Royal Bank of Scotland note being accepted by a London taxi driver after separation?

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By deciding to separate from the UK, Scotland would, by definition, separate itself from the UK’s central bank (the Bank of England) with all its powers, 
responsibilities and credibility (derived from the size of the UK economy and government).

How could UK politicians convince UK taxpayers to stand behind a foreign banking system?

What Alistair Darling failed to expose on Monday night was that a separated Scotland, under any form of currency arrangement, would still be beholden to interest rate and monetary policy determined by the UK central bank.

As so many financial companies have warned, most recently HSBC and Tesco Bank, there will be capital flight and job losses in Scotland after a Yes vote – 90 per cent of all the customers of Scottish financial service sector companies live in England, Wales and Northern Ireland.

How many of those customers will want to have their assets held by companies in a foreign country, which, because of the size of its economy, could not have a central bank large enough to stand behind its financial system?

Separation is a wholly unjustifiable indulgence.

The Scottish nation already has considerable autonomy, and with the extra devo-max measures will have even further scope to determine its own job creation and poverty alleviation policies, while retaining all of the resilience and security as part of the United Kingdom which we so badly need in these uncertain times.

The prospect of years of the sort of squabbling we saw on Monday night TV is surely enough to entice the don’t knows into No Thanks.


Morningside Park