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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Scotland Decides: SCOTLAND VOTES NO

  1. No 2,001,926
  2. Yes 1,617,989
After 32 of 32 counts Results in detail

Referendum Live

  1.  
    Text 80295 07:58: Referendum - Your Views

    Martin, Glasgow: I don't think a single person in Scotland wants the West Lothian Question to remain. We understand fairness. Why, then, is fixing it supposedly the reason for the collapse of the great Scottish bribe off?

    Lorna, Glasgow: These tax proposals are exactly what Better Together objected to for independence: cross border, tax etc. We should have had more info on this before the referendum.

    Anon: Nicola Sturgeon for first minister... mon the Irn Bru Lady.

     
  2.  
    07:53: PM has 'muddied the waters'

    David Cameron has "muddied the waters" on devolved powers in the wake of Scotland's referendum vote, according to a Labour MP.

    Graham Allen, the MP for Nottingham North and chairman of the House of Commons political and constitutional reform committee, said the prime minister should deal with devolution for England separately.

    Labour MP Graham Allen

    "Promises were made by all the union parties; they have to be honoured and they will be honoured," Mr Allen told BBC Radio's Good Morning Scotland programme.

    "What's confusing people is the prime minister, threw in on Friday morning, that he wanted to look at English MPs and English votes.

    "I think that's muddied the waters and everyone would be happier if those issues were dealt with separately.

    "That won't compromise any promises that were made by those parties last week before the [referendum] vote took place.

    "There is a separate issue, which is very important, which is Scotland, through their fantastic democratic adventure of the referendum, has raised devolution for everyone else in the union.

    "Really, we just need to be honest about this. We're going to have, at some point, a federal parliament and system in the UK."

     
  3.  
    Text 80295 07:40: Referendum - Get Involved

    Anon: UK parties letting Scotland down already; we've had broken promises before. Will we ever learn?

     
  4.  
    07:34: Salmond claims voters were 'tricked'

    "No" voters in last week's independence referendum were "tricked" by a late vow of more devolved powers, according to Alex Salmond.

    Salmond, who is stepping down as Scotland's first minister, accused the three UK party leaders of "reneging" on the pledge they made days before Thursday's referendum which he claimed won the "No" vote.

    Alex Salmond

    No 10 dismissed his claims, as the three parties continue to disagree over handling the process of devolution.

    Voters in Scotland rejected independence by 55% to 45%.

     
  5.  
    haveyoursay@bbc.co.uk 07:25: Referendum - Your Views

    John Mason, Falkirk: Surely the big problem for the Tories is convincing their back-benchers that nothing is being given away to Scotland under increased powers, without letting the cat out the bag to those poor Scottish voters who misguidedly switched? While it's proposed the Barnett Formula remains, alas all new tax-raising powers are deducted from it. Hence, 'devo max' only works for Scotland if the new tax-raising powers exceed the Barnett block grant, and that's not likely to happen! Yes, Mr Brown, you can fool most of the people most of the time, you just did it!

    Ian: How dare you Alex! The people have spoken - let us do what we as a people and nation have done so well! Keep the heid, respect the democratic process and, aye, be humble. We helped create the modern world that way.

     
  6.  
    07:18: West Lothian Question David Porter Westminster correspondent

    Here in Manchester [Labour Party conference] there's a palpable sense of relief at the result of the referendum vote. Most delegates enthusiastically back the idea of more powers for Scotland but many, particularly from Labour's English heartlands, want further devolution for their areas too.

    A growing number also believe that the West Lothian Question, concerning the voting rights and responsibilities of Scottish MPs, also needs to be looked at.

    The conference will get the chance to make its feelings about Scotland known this afternoon when the Scottish leaders address delegates in their formal report on Scotland.

    The shadow Scottish secretary Margaret Curran will say that the Labour Party must reach out to people who voted Yes across Scotland last week and assure them that real change is coming.

     
  7.  
    Text 80295 07:10: Referendum - Get Involved

    Anon: Surely English people have some entitlement too? I feel Scots MPs should be banned from voting on English-only issues. In return, then Scotland will get some more powers. Let's hope the Scots don't feel that somehow they're more worthy then all others, they're not.

     
  8.  
    07:04: Commons voting rights limited?

    David Cameron is hosting a summit of senior Conservative MPs at Chequers to discuss plans to limit the Commons voting rights of Scottish MPs.

    The prime minister has said a pledge to give Scotland more powers should go hand in hand with changing the role of Scottish politicians at Westminster.

    Alex Salmond (left) and David Cameron

    However, Labour leader Ed Miliband is opposed to linking the two issues.

    The three main parties pledged more devolution during the campaign to encourage Scots to reject independence.

     
  9.  
    07:01: Labour 'reaches out' to 'Yes' voters

    Labour aims to reach out to supporters who voted for independence in last week's referendum.

    Shadow Scottish Secretary Margaret Curran said senior party figures would meet Labour voters who backed independence in last week's referendum.

    Three of the four local authorities where a majority of people voted "Yes" were Labour-controlled.

    And the SNP, Scottish Greens and Scottish Socialist Party say they have recruited many former Labour members.

     
  10.  
    07:00: Thomas McGuigan BBC Scotland News

    Good morning and welcome to today's live page coverage of the latest post-referendum news and analysis.

     

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