Scottish independence: Currency union block could hurt firms, says Alex Salmond

 

Alex Salmond's speech came after Chancellor George Osborne last week ruled out a currency union with an independent Scotland

Blocking an independent Scotland's ability to share the pound could damage business in the rest of the UK, First Minister Alex Salmond has said.

Mr Salmond said the UK Treasury could impose "hundreds of millions of pounds" in costs on firms if plans for a post-Yes currency union were rejected.

Last week Chancellor George Osborne said a vote for independence meant walking away from the pound.

Prime Minister David Cameron said Mr Salmond was "a man without a plan".

The row came ahead of the 18 September independence referendum, in which voters in Scotland will be asked the Yes/No question: "Should Scotland be an independent country?"

Mr Salmond hit back at Mr Osborne during a speech in Aberdeen, as he published Scottish government analysis which said that a separate Scottish currency under independence could mean £500m in transaction costs for the rest of the UK.

Alex Salmond's demeanour in his Aberdeen speech was intriguing.

He was addressing business supporters. His audience like independence. Yet, from the first minister, zero in the zone of rhetoric, no Nationalist bombast whatsoever.

Why? Because, of course, his true audience lay well beyond the Aberdeen hotel - where, incidentally, Mr Salmond launched his campaign for re-election as party leader; an initiative that led us, albeit circuitously, to today's referendum.

Mr Salmond knows well that the faithful will vote 'Yes' in the referendum, regardless of George Osborne's comments upon the currency.

They yearn for independence, they cleave to it. Indeed, if anything, their zeal may be reinforced by the latest controversy.

However, to win this referendum, the first minister knows he has to convince the sceptical, the fretful, the anxious, the uncertain, the disquieted.

Those who gaze upon the independence project and mutter: "Aye, but . . ."

He said the bill would be incurred by industry and customers wanting to import and export from an independent Scotland.

The first minister said Mr Osborne had downplayed the disadvantages to the rest of the UK from a sterling zone.

"He said you don't need to be in a currency union to trade with other countries. No you don't. But it can impose a cost - a big cost," he said.

"I am publishing today an estimate of the transactions cost he would potentially impose on businesses in the rest of the UK.

"They run to many hundreds of millions of pounds."

Mr Salmond added: "My submission is that this charge - let us call it the George tax - would be impossible to sell to English business.

"In fact if you remove oil and gas from the equation, Scotland is one of the very few countries in the world with which England has a balance of trade surplus."

Mr Osborne's position that he could not support the Scottish government's currency union plan was backed by the other two main Westminster parties, Labour and the Liberal Democrats.

Mr Salmond said "attempts to dictate from on high" the terms of the debate were damaging the democratic process.

Alex Salmond Alex Salmond said Westminster ministers downplayed the disadvantages to the rest of the UK from a sterling zone
Alex Salmond Mr Salmond said the "George tax" would be impossible to sell to English businesses

He said Mr Osborne's position was not an economic assessment, but a "campaign tactic", adding that the "accumulated negativity" of the campaign to keep the Union, would "differ greatly from the reality of life" after the referendum.

The Scottish first minister said: "To be told that we have no rights to assets jointly built up is as insulting as it is demeaning.

You may agree with the Scottish government that it's bluff, and there will be goodwill and co-operation once negotiations get under way.

Having digested it, and Alex Salmond's response this morning, my reckoning, for what it's worth: that would be a brave thing to do.

It's your judgement as to whether it's bullying or ill-judged in tone.

But I got the sense these Treasury officials meant what they wrote.

"To be told there are things we can't do will certainly elicit a Scottish response that is as resolute as it is uncomfortable to the 'No' campaign.

"It is, 'yes we can'. It is a sign of just how out of touch and arrogant the Westminster establishment has become."

In response, Mr Cameron said the first minister had not delivered on his promise of a detailed response to the arguments put forward by Mr Osborne.

"Alex Salmond is now a man without a plan," said the Prime Minister.

"He told us he wanted to have a currency union and that now looks under threat.

"He's told us that he wanted Scotland as part of the European Union - that is under threat."

Mr Cameron added: "And he's making, I think, quite an empty and rather angry speech today - but he hasn't got a plan and I think people will see he hasn't got a plan."

David Cameron: ''Alex Salmond is now a man without a plan''

Mr Salmond's speech also came after European Commission President Jose Manuel Barroso cast doubt on Scotland's membership of the European Union in the event of a "Yes" vote.

Mr Barroso said it would be "extremely difficult, if not impossible" for an independent Scotland to join and that it would have to apply for membership and get the approval of all current member states.

But the first minister said the EU had admitted so many countries that a "pragmatic way" would be found in the case of Scotland.

Mr Salmond said no member state had suggested it would seek to block an independent Scotland from becoming an EU member.

 

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  • rate this
    -3

    Comment number 2.

    Its not up to Osbourne to decide whether there's a currency union or not (it should also be pointed out that while in opposition this govt opposed the British bank bail out... when in power they underwrote Irish debt) but Jose Manuel Barroso's comments carry much more credibility. Being forced to apply to the EU as a new member should automatically require signing up to the Euro.

  • rate this
    +685

    Comment number 1.

    It doesn't really matter whether you think its right or wrong Mr Salmond, the currency is part of the UK, which you are choosing to leave, the decision is ours not yours.

 

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