Scottish independence: Pound union ‘bad politics’

A mooted currency union would be "bad politics", according to the chairman of the Treasury select committee. Picture: PA
A mooted currency union would be "bad politics", according to the chairman of the Treasury select committee. Picture: PA
Share this article
Have your say

THE UK and Scottish governments should “rule out a currency union now” in the event of independence because it would be “unacceptable” to voters on either side of the Border, the chairman of the Commons Treasury committee has demanded.

Speaking in a debate on Scotland’s place in the UK, Andrew Tyrie, the Conservative MP for Chichester, told MPs that SNP First Minister Alex Salmond’s plan for a sterling zone between an independent Scotland and the rest of the UK was not realistic and “bad politics.”

His demand came in an highly charged debate, brought about by Glasgow North East Labour MP Willie Bain, on Scotland’s future where Tory Penrith MP Rory Stewart told Scotland “I love you” and calling on his fellow unionist MPs to make express their emotions better.

But the debate was also notable for the absense of big figures including senior Scots former Prime Minister Gordon Brown, ex-Lib Dem leader Charles Kennedy, Lib Dem Chief Treasury Secretary Danny Alexander and Aberdeen born Tory education secretary Michael Gove and the leaderships of the three main parties.

Former Labour chancellor Alistair Darling, who heads the Better Together campaign, was present in the chamber but did not speak in the debate.

‘Union should not be attempted’

Mr Tyrie’s call for ruling out a sterling zone was rejected by the SNP, while the Treasury pointed to Tory Chancellor George Osborne’s statement that a sterling zone is “highly unlikely”.

But in his speech Lib Dem Scottish Secretary Alistair Carmichael came close to ruling out a currency zone altogether by noting: “Voting for an independent Scotland means leaving the pound sterling.”

Mr Tyrie insisted it “should not be attempted”, and said that voters in both countries would reject the proposals.

Tyrie said: “What [currency union] means in practice is the Bank of England and the Treasury would have the power to direct a large part of Scottish economic and financial policy - for example, the Scots would probably be required to seek their approval before they could borrow to build schools and hospitals.

“A currency union would have to be a two-way street - now is it realistic to expect the rest of the UK, much the bigger partner both economically and by population, to accept Scottish oversight of fiscal policy here?

“I don’t think such arrangements would be acceptable to the electorate; what’s more I doubt a majority could be mustered for them in this House of Commons.

“Whatever the economics of trying to create a currency union, it seems to me it is bad politics for these islands.”

‘Out of touch’ claim

Dundee east MP Stewart Hosie , the SNP’s Treasury spokesman described Mr Tyrie as “sadly out of touch”.

He said: “The pound is as much Scotland’s as it is the rest of the UK’s, and the Fiscal Commission Working Group, with experts including two Nobel Laureates, have concluded that it’s in the interests of both Scotland and the UK to continue to retain Sterling in a formal monetary union.

“As Scotland is the UK’s second largest trading market, it would be absurd for Andrew Tyrie or anyone else at Westminster to stand in the way of protecting the benefits this brings to businesses and consumers in the rest of the UK.”

The debate at times became rancorous with Lanark Labour MP Jimmy Hood describing Mr Salmond and the SNP as “liars”.

He said: “I know that the Scottish National party is lying about Europe, as it is about pensions and welfare, and about keeping the pound.”

East Kilbride Labour MP Michael McCann said that the SNP independence white paper was a “deceit” which “makes my blood boil”.

Highlighting attempts by the Scottish Government to turn the bedroom tax into an independence issue when it had the power already to deal with it, he said: “What could be more despicable and reprehensible than preying on the fears and concerns of the most vulnerable people in Scotland?”

Pleas for UK to stay intact

West Aberdeenshire Lib Dem MP Sir Robert Smith warned of “an undercurrent of a bullying culture in respect of some of the voices that come forward in this debate” from the Nationalists.”

DUP MP Ian Paisley Jr. warned that Scottish Nationalism was “stirring up” Irish Republicanism in Northern Ireland.

But, in the spirit of David Cameron’s speech today, many Tory MPs made the emotional case for keeping the UK together.

Aldershot MP Gerald Howarth told the House how his mother’s family came from the Borders and helped define the English Scottish Border.

In an impassioned speech, he said: “This is no foreign country; this is where a large part of my soul resides. When I cross the border back into Scotland, I think of the words of Sir Walter Scott: ‘Breathes there the man, with soul so dead, Who never to himself hath said, This is my own, my native land!’”

Milton Keynes South MP Iain Stewart told MPs that his birthday is 18 September, the same day as the referendum.

He said: “I want to celebrate it — hopefully for many years to come — with a glass or two of a good single malt and a celebration of my country. I do not want it to be a permanent reminder of the day that my country was lost.”

SNP Perth and North Perthshire MP Pete Wishart told MPs that independence was “a great opportunity” for a Tory free Scotland.

He said: “We will run an independent Scotland better than the Westminster Tories because of one key and very important fact: we care more about Scotland than the Westminster Tories do — of course we do, and that is why we will run it better.

“Never again will we have a Tory Government without our democratic consent. We want no more picking on our vulnerable; no more obscenities such as the bedroom tax; no more of Labour’s illegal wars and no more Tory or Labour weapons of mass destruction defiling our beautiful country.”


SNP accept currency union means loss of powers

Comment - Andrew Wilson: We all want currency union to work

Tom Peterkin lays out Scotland’s currency options - the pound, the euro, a new currency and more