Scottish independence: Questions raised about alternative currency for Scots

An independent Scotland will have to look at setting up its own currency, according to one of the “Yes” campaign’s leading figures.

Green co-leader Patrick Harvie has raised questions over the SNP’s plans to keep the pound after Scottish independence, insisting that the currencies of Scotland and the UK would inevitably diverge if both countries go their separate ways.

Mr Harvie said there are “problems” with the idea of a currency union without political union.

He said: “Staying with sterling may be the ‘least worst’ option in the short-term but I think we need to consider the timescale for moving to a more sustainable currency situation.

“We seem to be told that our only choice is between the euro and the pound.

“I think we should open up the debate and look at whether an independent Scotland could have an independent currency, even if it might take years to reach that point.”

Former SNP deputy leader Jim Sillars has previously called for the creation of a Scottish dollar after independence is secured.

The SNP had previously been in favour of joining the euro but now wants to stick with sterling, and finance secretary John Swinney recently ruled out joining the euro for at least ten years.

The policy of retaining the pound has prompted criticism that an independent Scotland’s interest rates will be set by a foreign country through the Bank of England. Deputy First Minister Nicola Sturgeon suggested this week that a Scottish finance minister could appoint members to the committee of the Bank of England that sets interest rates.

But Labour’s shadow Scottish Secretary Margaret Curran refuted Ms Sturgeon’s claims.

“Nicola Sturgeon’s latest position doesn’t make any sense. Bald assertions won’t win many converts to her cause and shows the SNP are just making it up as they go along,” Mrs Curran said.

“If she wants to stand by her claim, she should publish the correspondence she has had with the Treasury and Bank of England on this point.

“But there is a more profound question. If Scotland leaves the UK, but the UK then sets our currency, interest rates, borrowing levels, fiscal rules and monetary policy until such a point until Scotland joins the euro, why on earth would that be better?

“Under the SNP’s plan, separation seems to involve someone else making all the rules.”