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

    Comment number 4462.

    The has -been Scottish celebrities are already starting to come out of the woodwork to get their moment of fame by supporting SNP.Why are we Scots having to go through this, its bad for savers, businesses,plans, & relationships with good English friends .Lowering the voting age to 16, for the youngsters who cause drunken havoc every evening is the last straw.

  • rate this

    Comment number 4461.

    The only country that is likely to veto Scotland is rump UK. Spain will delight in annoying London France will actively push for Sco auld alliance Germany will not bother. Scot is most pro EU of UK parts. In fact many of new accession states E Europe may end up in Sco if UKIP further gains traction in England with its "Empire" view of current EU ie pre 1973.

  • rate this

    Comment number 4460.

    Salmond just wants independence in name only. A bit daft really, as we already consider Scotland and Scotland. However, everything specific that he brings up shouts that he wants to remain as close as possible to the rUK. The shared pound, BoE control over rates, BoE backing, no trade taxes with rUK. This is because he knows that is the best financial model available to Scotland.

  • rate this

    Comment number 4459.

    This situation is not unlike a Scotland v England football match which is going all one way for one team. Then, a player trips another player right on the edge of the penalty area and before you know it, there are shouts of "Foul!" and referee is waited on with baited breath. Which team has committed the foul? As the referee, its up to the Scots to decide whether a foul took place or not.

  • rate this

    Comment number 4458.

    Just people are anti Scottish gives you no justifucation for making disrespectful racist comments.

  • rate this

    Comment number 4457.

    Another own goal scored by Salmond. He clearly wants to get Scotland relegated.

  • rate this

    Comment number 4456.

    It's becoming more and more apparent that the BBC is now a willing partner for a NO campaign which lacks any positive vision for a future Scotland.

  • rate this

    Comment number 4455.

    14. Steve
    Just being devils advocate but, so what if 90% of the UK & EU oppose him.
    It's got, as many on here remind us, nothing to do with 90% of the UK & the EU.
    No one should oppose them other than other Scots.
    This is Scotlands choice, their decision to make.
    We all should support Scotland what ever decision they make.

  • rate this

    Comment number 4454.

    Mr Salmond the EU has a lot of similar situations where countries want to split so allowing Scotland easy entry is not likely to be very acceptable to France or Spain since it would set a precedent they would not be happy with. A currency union would be difficult as two independent countries would have to agree a common tax and interest rate policy. Not likely to happen just look at Europe!

  • rate this

    Comment number 4453.

    'If they want the Pound they've to accept monetary policy & fiscal restraint set by London.' - Nick @ 4384


    Correct - and they will.

    If Scotland vote 'Yes' to independence, negotiations will commence and the outcome of those negotiations (assuming they're conducted in good faith, which I'm sure will be the case) will be a mutually acceptable arrangement for a shared sterling zone.

  • rate this

    Comment number 4452.

    Considering the Great Socialist Republican deprived 800000 Scots of their God given right to a say in the land of their birth's affairs why do we have to be stuffed full of Salmond tripe on all main media channels outwith the area which he has selected for his phoney referendum. By all means let them broadcast in that part of the UK where the Church of Scotland is the established church.

  • rate this

    Comment number 4451.

    The SNP have lost the plot. If they want independence, they lose the Pound and EU membership.
    If you want the Pound and remain in The EU vote No to independence.
    I hope when The SNP and the pro independence grouping will finally shut up up when they lose this referendum. I suspect this wont be the case!

  • rate this

    Comment number 4450.

    "if Scotland is a new Country then so will the remains of the UK "

    Really? pray tell, what will the rest of the rUk have voted to leave? If Texas left the USA or Quebec Canada, would you claim America or Canada no longer existed? Barroso referred to "part of a member state leaving that state" being a new country. Clearly, this applies only to Scotland. Try harder please.

  • rate this

    Comment number 4449.

    I wish Mr Salmond had extended this vote to all Scots born. I would like to have had my vote and it would have to be no. He is making it quite clear that his plans for independance have been poorly thought out and now its coming to a head non-existant. He is now trying to crudely manipulate voters with his blusterings about bullying. There are two sides to this and Scots have to know them both.

  • rate this

    Comment number 4448.

    How much of our taxpayer's money is being wasted on debate and the referendum itself for something that can clearly never happen.

    The idea is absolutely farcical, how can Scotland start up with a new currency and no access to our NHS, defence and other services. There's no way we're going to let them have all the bits they want and set fire to our currency with their idiotic policies!

  • rate this

    Comment number 4447.

    Bye bye Mr Salmond .......enjoy being broke !

  • rate this

    Comment number 4446.

    My biggest hope for Scotland is if it does vote yes to be independent
    that it does not join EU

    That would be the biggest diss to every Scottish person who has always longed to be free

    Scotland is looking at things the wrong way-
    its not Britain thats the problem,
    its EU

    It would be utter stupitidy for Scotland to give up its independence to EU

  • rate this

    Comment number 4445.

    Does Slippery Salmond realise that when he's won independence, and the Scottish people turn on him as one when they realise its all lies, that no one is going to his aid.

  • rate this

    Comment number 4444.

    It would be crazyness for the UK to allow Scotland to keep on using the pound while having no leverage of that particular currency. Interest rates set at the bank of England only control part of the inflation rate. Taxes form another part, if taxes are to be vastly different and public services funded to different levels neither the UK or Scotland would be able to control inflation.

  • rate this

    Comment number 4443.

    So the Scots want to leave the union, fine, but they must appreciate that that is what they would be doing. The pound belongs to the UK and if you're not in it you can't use the currency. Alec Salmond seems to think he can pick and choose what Scotland will take and what they will leave - I hope all British politicians will let him know that is not so.


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