Scottish independence: Pound claims ‘are flawed’

Advocate General Lord Wallace will say SNP claims are 'fundamentally flawed' on legal grounds. Picture: Robert Perry

The Lib Dem peer will tell an audience at 80 Club in London that Chancellor George Osborne’s statement that there will be no sterling zone with an independent was based on legal advice as well as economic interests for the rest of the UK in the event of a Yes vote in the independence referendum.

Lord Wallace, the United Kingdom Government’s Law Officer for Scotland, will explain that international law is clear that if Scotland decides to leave the UK then we would also leave behind UK institutions like the Bank of England.

He will also compare the Scottish Government to a group of golfers who are proposing to leave their golf club and threatening to take the 7th and 18th holes with them.

He will also describe the threat by Scottish Government Ministers to walk away from paying a fair share of UK debt as ‘disappointingly petulant’.

He will say: “The Chancellor of the Exchequer set out the economic rationale for rejecting a sterling currency union as being in the interests of neither Scotland nor the continuing UK. But this issue is also underpinned by a legal analysis.

“It is important to understand this, as it knocks on the head the assertion made by the First Minister, Deputy First Minister and others that the rest of the UK is just trying to be beastly to Scotland.

“When UK ministers say that the Bank of England would not belong, in part, to an independent Scotland, that is an expression of the legal position, not a calculated asset-grab.”

He will claim that the arguments made by SNP ministers is fundamentally flawed in two ways.

He will say: “In their White Paper, Scottish Ministers claim that ‘the pound is Scotland’s currency just as much as it is the rest of the UK’s’ and the Cabinet Secretary for Finance in the Scottish Government, John Swinney MSP, has argued that the Bank of England is ‘as much our bank as it is anybody else’s’. With respect, they are wrong on both counts.”

He will explain that the legal analysis set out in the UK Government’s first Scotland Analysis Paper makes it clear that in the event of Scottish independence, the institutions which currently serve the United Kingdom will serve the continuing United Kingdom.

He will say: “For obvious reasons, the Scottish Government doesn’t assert that it should continue to have a share of the UK Parliament. By a similar token, the UK central bank, the Bank of England would continue to serve the continuing UK as its central bank, but would not do so for the newly independent Scotland.

“The flaw in the Scottish Government’s position is to equate currency with assets

“There is no principle of international law which obliges a country to enter into a currency union with a foreign country.”

He will add: “As indicated in the paper just referred to, UK ministers have acknowledged that, according to the well accepted principles of public international law, there would, on independence, have to be a detailed negotiation as to how relevant UK assets and liabilities fall to be equitably divided between the continuing UK and the new independent Scottish state.”

SEE ALSO

• Plan B to keep using pound

• Independent Scotland ‘would leave pound’

• Bill Jamieson: Scotland can’t bank on the pound

• Independence support rises in wake of pound row

• Salmond hits back at UK’s ‘insult’ on pound

• Independent Scotland ‘will retain pound’ - Salmond