Referendum : Keeping the £ - No Cast-Iron Guarantee


17 November 2013

With the publication of the Scottish Government’s White Paper on Independence almost upon us, it was left to a Scottish Government employee, not a Scottish Government Minister, to admit that the White Paper would be unable to give a cast-iron guarantee that an independent Scotland could keep the £ after it left the UK and establish a currency union with the rest of the UK .

Alex Salmond’s Chief Strategist, Colin McKay, told a legal conference :

"We cannot assert as an a priori fact we can achieve a currency union with the UK, but we can set out why we think it is the best option."

The existence of any Plan B from Mr Salmond  still remains unknown.

Plan B would be a necessary fall-back position that would be required to put in place if the currency union could not be agreed upon.

Mr Salmond can find no friends for his “currency union” in the devolved administration in the Welsh Assembly , the Labour First Minister of Wales Carwyn Jones saying,

“There would be a real risk for the continuing UK if it were to enter a euro-style currency zone with an independent Scotland.”

Over the summer, Alex Salmond sought comfort in attempting to draw a comparison with his plans for his Scottish £ and the Manx £ , the currency of the Isle of Man, and thus comparing a country of over 5 million people with an island with a population of around 85,000.

However Better Together responded to Mr Salmond thus :

“The Isle of Man is a Crown Dependency and is not in a currency union with the UK.

“It has no central bank and no lender of last resort.

“Is he honestly trying to tell the people of Scotland that it is a good idea to have no-one standing behind our banks and to have no say in how our mortgage or savings rates are set?"

They also pointed out that Mr Salmond’s own Fiscal Commission had dismissed comparing Scotland with the Isle of Man economically.

The issue of keeping the £ is at the very centre of the economic argument in debate over independence.

Alex Salmond’s problem is this :

He wants to keep the £ in an independent Scotland , but he knows that most people in Scotland acknowledge that the best, the easiest and the most straightforward way to keep the £ in Scotland is for Scotland to remain within the UK.