Independence: Scottish resources ‘bankrolling’ UK

Alex Salmond is still hopeful over a currency union. Picture: TSPL
Alex Salmond is still hopeful over a currency union. Picture: TSPL
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Scotland is “bankrolling” the rest of the UK with its oil and gas resources, and the pound would face a gloomy future if it was withdrawn north of the Border after independence, Alex Salmond has told MSPs.

• Alex Salmond also believes the pound would face a ‘gloomy future’ if sterling was withdrawn from Scotland post-independence

• Salmond rejected the possibility of a Euro-style set-up, after George Osborne dismissed a currency union

The Scottish Government wants to keep sterling as part of a currency union if Scots vote Yes in next year’s referendum, but Mr Salmond came under pressure from opposition leaders at Holyrood who insisted he would be relying on the goodwill of “neighbours we’ve just rejected”.

Earlier this week, Chancellor George Osborne said if Scotland broke away, it was “unlikely” the remaining UK would back a euro-style currency union after the fiscal meltdown across the continent in recent years.

But Mr Salmond rejected this during First Minister’s Questions yesterday, citing a report by the Scottish Government’s Fiscal Commission Working Group.

“The most substantial point is that Scottish resources bankroll the sterling area – £50 billion – what on earth would happen to sterling if that were outside the sterling area?” he said. “Therefore, we’re not depending on goodwill or munificence – just the obvious economic self-interest, the overwhelming self-interest of the rest of the United Kingdom.”

But Scottish Labour leader Johann Lamont said the absence of any plans for a separate Scottish currency meant Scotland would be at the mercy of UK Treasury officials in negotiations about any currency union.

“If you don’t have a plan B,

you boil down the First Minister’s position to simply this – ‘Please, gonna please let us be in a currency union’ – with no credibility about what you would take into that negotiation.

“It matters to families wondering what currency their wages will be paid in and how they will put food on the table. It matters to pensioners entitled to know how their pension will be paid. It matters to the person who saved all of their lives and now wonders what those savings will be worth if there is a Yes vote.

“The currency we have is a most basic question and it is astonishing that the First Minister has been unable to answer it. What the First Minister is saying is that he wants a divorce but to keep the joint bank account. Isn’t he gambling with Scotland’s future on the goodwill of neighbours we have just rejected?”

Mr Salmond also faced criticism over the absence of any contingency plans for a possible separate currency from Scottish Green leader Patrick Harvie, his pro-independence ally. “Securing the future of Scottish bank notes or any other favourable terms of a currency union with sterling might well be possible, might even be in Scotland’s and the rest of the UK’s interests,” Mr Harvie said.

“But how can we possibly be in a strong enough position to negotiate those favourable terms if the government has closed down the other option of a genuinely independent currency?”

Scottish Tory leader Ruth Davidson called on Mr Salmond to “come clean” on his alternative to a currency union. “He must have a plan B – he can’t seriously expect Scotland to believe he would go into any important negotiations with such a weak bargaining position and no back-up plan,” she said.