Division over Scottish currency

The Treasury and Scottish Government are clashing over whether Scotland should keep the pound if the country votes for independence.

Treasury and Scottish Government clash over currency

The Treasury and Scottish Government have clashed over whether Scotland should keep the pound if the country votes for independence.

Chancellor George Osborne said: "I want the best for Scotland and for all our United Kingdom. We're better together."

Scottish Finance Secretary John Swinney said Scotland could walk away from its share of the UK's debts if the Westminster government refuses to come to "a rational and considered agreement".

Debi Edward reports:

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Salmond accuses Chancellor of 'political sabre-rattling'

Scottish First Minister Alex Salmond, speaking to BBC News 24, accused the Chancellor of "political sabre-rattling".

This is a Tory Chancellor trying to scare people in Scotland, trying to stop them voting for independence.

But the day after a resounding Yes vote in the referendum, when people sit down and start to negotiate in the best interest of the people of Scotland and the rest of the United Kingdom, he will sing an entirely different tune."

It's in everyone's interests to have a currency area after independence - it's in the interests of Scotland, it's also overwhelmingly in the interest of the rest of the United Kingdom.

– Alex Salmond, Scottish First Minister

He said that was for the "very simple reason that huge Scottish resources such as oil and gas would continue to protect the sterling balance of payments"

Only way to keep pound in Scotland is to 'stay in the UK'

Speaking in Glasgow the Chancellor has said:

The SNP asserts that it would be in everyone's interests for an independent Scotland to keep the pound as part of a eurozone-style sterling zone.

But the Treasury analysis we are publishing today shows that is not the case. Let's stop speculating and look at the evidence.

Would the rest of the UK family agree to take that risk? Could a situation where an independent Scotland and the rest of the UK share the pound and the bank of England be made to work? Frankly it's unlikely because there is real doubt to the answers of these questions.

In other words the only way to be sure of keeping the pound as Scotland's currency is to stay in the United Kingdom.

– George Osborne, Chancellor

Scottish independence 'a dive in to uncharted waters'

George Osborne speaking in Scotland today.
George Osborne speaking in Scotland today.

George Osborne has said that breaking the union between Scotland and the rest of the UK, "would represent a very deep dive in to uncharted waters."

"Let's be clear, abandoning current arrangements would represent a very deep dive in to uncharted waters. Would a newly independent Scottish state be prepared to accept significant limits on its economic sovereignty.

"To submit its budgetary plans to Westminster before Holyrood, to constraint the degree of tax competition between Scotland and the rest of the UK. To accept some continuing oversight and what is the economic case for the remaining UK?"

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Breaking up UK would leave Scotland with 'difficult choices'

Analysis has been prepared by Treasury civil servants and their analysis shows that the current arrangements of a full monetary, fiscal, political union bring economic benefits to all parts of the United Kingdom.

Breaking up that union would represent a fundamental change and confront an independent Scottish state with difficult choices about what to put in its place.

– George Osborne, Chancellor

If Scotland loses the pound 'it should drop UK debt'

Scottish Finance Secretary John Swinney warned the Chancellor that he was "playing with fire". He told the BBC that Scotland could walk away from its share of the UK's debts if the Westminster government refuses to come to "a rational and considered agreement".

What the Treasury paper is designed to do is to make things sound as difficult and as obstructive as possible. I don't really think it is a particularly helpful contribution to the debate.

He is arguing in his paper this morning that the UK would be the successor state, that it would hold on to the pound and we somehow couldn't get access to that.

If that's his position, then the UK as the successor state is obliged to hold on to all of the debt. We would be liberated from a population share of UK debt of £125 billion.

If that's the kind of game of negotiation the Chancellor wants to play, he's welcome to do that.

– John Swinney, Scottish Finance Secretary

Scotland 'to give up economic control' to keep pound

An independent Scotland would have to give up control over key elements of its economy if it wants to keep on using the pound, Chancellor George Osborne warned today.

Mr Osborne told the BBC Radio 4 Today programme:

I think it is unlikely that the rest of the United Kingdom would agree to or we could make work a euro-style currency zone with Scotland.

It is all very well for the SNP to assert that's what they would like. I think it is unlikely that it could be made to work and therefore if Scotland wants to keep the pound the best way to do that is to stay in the United Kingdom.

Scotland could go on using the pound, rather like Panama uses the American dollar, but it would have absolutely no control at all over its currency or its macroeconomic framework.

There are some countries in the world that use other countries' currencies without their consent if you like, but it's a very, very difficult option for a country to undertake.

Treasury chief: 'I want Scotland to stay in the UK'

Treasury Chief Secretary Danny Alexander Credit: Dominic Lipinski/PA wire

Treasury Chief Secretary Danny Alexander has told Daybreak: "I want Scotland to vote to stay in the UK".

Speaking about the independence vote, he said: "The disruption of unnecessarily erecting a new border on our island would be hugely damaging and that's what I want to stop."

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