Alex Salmond: ‘Chancellor would bite our hands off to keep the pound’

ALEX Salmond insisted that a UK chancellor would be “biting our hands off” for an independent Scotland to keep the pound, as he told MSPs that 67 nations across the globe shared their currencies in the same way.

ALEX Salmond insisted that a UK chancellor would be “biting our hands off” for an independent Scotland to keep the pound, as he told MSPs that 67 nations across the globe shared their currencies in the same way.

Mr Salmond used First Minister’s Questions in the Scottish Parliament yesterday to claim that “monetary unions” between the 67 countries bolstered the case for the SNP’s flagship policy of an independent Scotland keeping the pound alongside the rest of the UK.

Sign up to our Politics newsletter

Sign up to our Politics newsletter

However, the controversial policy was attacked by Labour as following the “poorest countries on Earth”, after it emerged that the group of 67 included such poverty-stricken nations as Niger, Togo, Chad and the Republic of the Congo that all share the CFA (African Financial Community) franc guaranteed by the French treasury.

Mr Salmond was challenged about his currency plans by Labour leader Johann Lamont and Conservative leader Ruth Davidson, who said the Bank of England “would be unlikely to give Scotland a second thought after independence” when setting interest rates, “leaving us with less control”.

The row came as Mr Salmond wrote to Holyrood party leaders and Independent MSP Margo MacDonald inviting them to participate in cross-party discussions on the referendum process, with the First Minister asking his opponents for a “positive contribution to the consultation” on the vote.

Ms Lamont attacked the SNP’s currency policy as one that would allow key decisions that would impact on mortgages, savings and pensions to be “made by a foreign bank with no remit to look at Scotland’s conditions and circumstances”.

However, Mr Salmond said there were 67 countries in the world that were using another nation’s currency, “either in formal or informal monetary unions at the present moment”, while remaining independent.

He said: “That doesn’t mean they’re not independent countries; that just means they’re in monetary unions.”

But the SNP backing for currency union, a policy that also sees war-torn Equatorial Guinea sharing the CFA franc, was heavily criticised by Scottish Labour.

A Scottish Labour spokesman said: “Some of these countries the SNP say could be an example for Scotland to follow are amongst the poorest on Earth.

“Many decent, hardworking Scots will be bewildered that Alex Salmond is asking us to follow a similar economic model to some of these countries.”

Mr Salmond claimed that Scotland has “no influence whatsoever at the present moment” over the setting of interest rates, as he said that the then chancellor, Gordon Brown, had granted independence to the Bank of England in 1997.

He said: “When the Labour Party in government, subsequently agreed to by the Conservatives, decided on a policy of independent monetary authority, they gave away any ability of politicians to control interest rates.

“So, therefore, the idea that politicians in London control interest rates now is totally fallacious.”

Mr Salmond went on to say that oil and gas reserves and the value of Scottish exports, such as whisky, meant an independent Scotland would benefit a “sterling area” of countries using that currency if it left the UK but retained the pound.

He said: “Can I give a couple of good reasons why I think any chancellor of the exchequer would accept the idea of a currency union between Scotland and England?

“Firstly, oil and gas. Scotland would get the revenues from our geographical share of oil and gas.

“Secondly, £24 billion of Scottish international exports, including £4bn of whisky exports.

“That’s why I believe, given the huge support supplied by Scotland to the sterling area, that any chancellor of the exchequer would be biting our hands off to get to such a sensible arrangement.”

Ms Davidson asked the First Minister what his “ultimate banknote of choice” would be and suggested that he would favour the “Salmond shilling”.

The Scottish Conservative leader said: “The First Minister has been telling media organisations, not just in this country but elsewhere, that the pound can be a transition currency, just like in Australia when it became independent.

“So if that is the First Minister’s transition plan, what is his ultimate banknote of choice?

“Is it the euro, much loved by him and the SNP? Or perhaps he’s planning his own currency, the Salmond shilling. The First Minister asserts that an independent Scotland would not be forced to join the euro as an accession country, when the weight of legal opinion states otherwise.

“He asserts that the Bank of England would act as a lender of last resort for Scotland, which would then be for us the bank of a foreign nation.”

Ms Lamont said that the SNP was taking “unnecessary risks” with people’s finances by insisting the Bank of England would be the lender of last resort in an independent Scotland.

She said Scots needed to have “confidence in their pensions, their mortgages, and their future”.

The Scottish Labour leader added: “Isn’t it the truth that the SNP push for separation isn’t about people’s savings, isn’t about people’s mortgages, isn’t about people’s pensions, it’s about the First Minister’s blind faith that it will be better because he says so?

“Why is he prepared to take unnecessary risks with people’s mortgages, their savings, their pensions in the midst of the worst economic global crisis since the 1930s for no good reasons, because what it will create is political separation, yes, but with less economic control, in order to serve the people of this country?”