Scottish Independence: Alex Salmond's currency defence

Key Points

  • UK Chancellor George Osborne said last week the rest of the UK would not want to share the sterling currency with an independent Scotland
  • Labour and the Lib Dems agreed that a vote for Scottish independence would mean walking away from the pound
  • Scotland's First Minister Alex Salmond has vowed to "deconstruct" the chancellor's case in a speech to business leaders
  1.  
    1047:

    Scotland's first minister Alex Salmond is to give a speech to the pro-independence Business for Scotland organisation in Aberdeen at 11:00

     
  2.  
    1049:

    Mr Salmond says he will deliver a "point-by-point deconstruction" of UK chancellor George Osborne's speech on a currency union with the rest of the UK.

     
  3.  
    1052:

    The Scottish government says that following a "yes" vote in September's referendum, it would be in everyone's interests for Scotland and the rest of the UK to share the pound.

     
  4.  
    1053:

    UK ministers argue such a deal would essentially see Scotland's monetary policy set by a foreign country.

     
  5.  
    1054:

    In its White Paper blueprint for independence, the Scottish government says a currency union is vital to let companies go about their business, otherwise there could be a damaging effect in the rest of the UK.

     
  6.  
    1055:

    The UK government asks why the rest of the UK should enter into a sterling union with Scotland, when recent experience in the euro area has shown how difficult these agreements are to maintain.

     
  7.  
    1058:

    As well as Conservative chancellor George Osborne, both Labour and the Liberal Democrats have indicated they are also opposed to a currency union.

     
  8.  
    11:02:

    Mr Salmond is about to be introduced at the Business for Scotland event in Aberdeen. The organisation has 1,400 members in Scotland, mainly from small to medium enterprises. The organisation says it prides itself on the diversity of its membership.

     
  9.  
    11:04:

    After those comments, we could be set to find out whether the Scottish government have a currency Plan B or if they will continue their call for a formal currency union.

     
  10.  
    James Bloodworth

    tweets: Alex Salmond needs to woo, not bully, the rest of the UK

     
  11.  
    1103:

    Business for Scotland believes that Scotland could and should be an independent country. It says it believes it is fundamentally better for Scotland if the people of Scotland take decisions which affect the country.

     
  12.  
    1106:

    Alex Salmond gets up to speak.

     
  13.  
    1107:
    Alex Salmond

    Mr Salmond reflects on returning to be SNP leader in 2004 and how unlikely it seemed that a decade later Scotland would be on the brink of a referendum.

     
  14.  
    1108:

    The SNP leader says he wants to make four points on currency but he insists he wants to remain positive in his campaigning.

     
  15.  
    1109:

    Mr Salmond says the three main UK parties have seen their intervention on currency "backfire" on them already.

     
  16.  
    1110:

    Mr Salmond points out that Chancellor George Osborne had been to the north east of Scotland more than two years ago and said he knew that the prospect of a referendum was deterring investment from Scotland. Mr Salmond says that inward investment has risen despite the referendum coming.

     
  17.  
    1111:

    Mr Salmond says there has been a fair amount of mutual cooperation between the parties over the past few years and he thinks that will continue despite the intervention last week.

     
  18.  
    1112:

    Mr Salmond says comments coming from Westminster about not honouring the result of a referendum are against the Edinburgh Agreement and he wants Prime Minister David Cameron to repudiate these comments. "Or better still he could come here and debate with me," Mr Salmond says.

     
  19.  
    1114:

    Mr Salmond speaks of the comments by European Commission President Jose Manuel Barroso. He says if Scotland were not to be allowed into the EU after independence it would be counter to the fundamental principles of the European Union.

     
  20.  
    11:15:

    European Commission President Jose Manuel Barroso told the BBC's Andrew Marr it would be "extremely difficult, if not impossible" for an independent Scotland to join the European Union.

     
  21.  
    1116:

    Mr Salmond says his government's Fiscal Commission Working Group, made up of international experts, concluded that sharing a currency with the rest of the UK in a monetary union was the best option. He says the chancellor seems unaware of the work which had gone in to the report and the credentials of those who wrote it.

     
  22.  
    1118:

    Mr Salmond says George Osborne presented a "caricature" of the work done by the Scottish government on the currency.

     
  23.  
    Colin

    Tweets: We're a 'family of nations' - except this member of the family is told they own nothing in the hoose, apart fae the overdraft. #indyref

     
  24.  
    11:20: INFORMATION

    David Cameron signed the Edinburgh Agreement - a deal setting out the terms of the referendum - alongside Mr Salmond on 15 October 2012.

     
  25.  
    Caron Lindsay

    Tweets: How many EU countries have actually said they would welcome an independent Scotland with open arms on current UK terms? That's be 0.#indyref

     
  26.  
    1119:

    Mr Salmond says Scotland's share of the bank levy was 7%. He says the Treasury's claim that Scotland had 25% of UK banking was arrived at by allocating London-based assets to the Scottish companies. Mr Salmond says the claim that Scotland's banking sector is too large for a small country is based on a misrepresentation.

     
  27.  
    1121:

    The first minister also accuses the chancellor of choosing his facts carefully on the impact of fluctuating oil prices.

     
  28.  
    1122:

    Mr Salmond says the chancellor down-played the disadvantage to the rest of the UK of not being in a sterling zone. He says transaction charges would cost UK businesses hundreds of millions of pounds. Mr Salmond calls this the "George Tax".

     
  29.  
    1124:

    The first minister also says the chancellor played down the positive impact to balance of trade of having Scottish oil and gas included in balance of payments.

     
  30.  
    11:25:

    Signing the Edinburgh Agreement committed both governments to work together constructively in the best interests of the people of Scotland, whatever the outcome of the referendum.

     
  31.  
    1125:

    Mr Salmond says Scotland has lived within a balanced budget since 2007 whereas the chancellor has borrowed half of the UK's £1.25 trillion debt since 2010. Hardly a reputation of financial rectitude, Mr Salmond says.

     
  32.  
    Mike Daley

    Tweets: @politicshome @AlexSalmond "pot calling the kettle black" springs to mind #indyref

     
  33.  
    1126:

    Mr Salmond says if there is no legal basis for Scotland having a share of the Bank of England then there is no legal basis for Scotland to take its share of the UK debt. He says the Scottish government's position is not based on law but on goodwill.

     
  34.  
    Craig Munro

    Tweets: Alex calmly filletting Osbourne's nonsense .. #indyref

     
  35.  
    1128:

    Mr Salmond says the chancellor's "diktat" had backfired badly in Scotland. No-one with an understanding of Scotland or its history would have made the speech George Osborne did last week, Mr Salmond says.

     
  36.  
    1130:

    Mr Salmond says the sight of a Labour shadow chancellor reading out a statement prepared by the Westminster Tory government was too much for many in Labour.

     
  37.  
    1131:

    No-one doubts that Scotland can be a successful independent country, Mr Salmond says. Even without North Sea oil revenues, Scotland has a strong economy, he adds.

     
  38.  
    11:33:

    The BBC spoke to leading social psychologists to find out how Scots would be likely to react to Mr Osborne's speech and if his intervention would backfire.

     
  39.  
    11:34:

    Mr Salmond says the No campaign has no plan for Scotland except leave it to Westminster and hope for the best.

     
  40.  
    James Millar

    Tweets: OMG Salmond is trying to claim 'Yes We Can' as an independence slogan. #indyref

     
  41.  
    11:34:

    The first minster says he want a partnership of equals with our friends in the rest of the UK. He concludes by saying Scotland can and should become an independent country.

     
  42.  
    1135:

    There is applause from the pro-independence business audience and there will now be a 10-minute question and answer session.

     
  43.  
    1136:

    The first question is about membership of the European Union. Mr Salmond says Scotland has been part of the EU for 40 years and wants to remain so. He says those negotiations are likely to be more successful than those south of the border where the UKIP agenda has driven the Tories to promise an in/out referendum of membership.

     
  44.  
    1138:

    Mr Salmond responds to a question on UK balance of payments. If Scotland is in the sterling area the revenues from oil and gas and whisky exports come to Scotland but they would show up on the balance of payments for the UK, Mr Salmond says. He says this shows why George Osborne's comments were "bravado". Scottish exports make a "substantial" contribution to UK balance of payments, he says.

     
  45.  
    Matthew Revett

    Tweets: still no clearer if my mortgage will be secure in SNP's vision for independent Scotland #currency #indyref

     
  46.  
    1144:

    Mr Salmond repeats that George Osborne predicted that having a referendum would hit growth in the Scottish economy and it didn't. He says that soon after Mr Osborne's "doom-laden" prediction, the Edinburgh Agreement was signed. Mr Salmond says he sees the need to separate the campaign rhetoric from the mature debate which will happen after the vote.

     
  47.  
    1147:

    Alex Salmond calls for a positive campaign because the day after a Yes vote the people in England and the rest of the UK "will be our closest friends and neighbours". He closes to further applause from the Aberdeen business group.

     
  48.  
    John Austen

    Tweets: If Salmond wants to keep the Pound then equally the rest of the UK ought to have a say in the referendum as well.

     
  49.  
    1154:

    BBC chief political correspondent Norman Smith says Mr Salmond attacked the Westminster government for its destructive negative campaign. He says it is fine for Mr Salmond to attack Mr Osborne but it is much harder for him to seek to discredit the governor of the Bank of England Mark Carney or the president of the European Commission who have raised issues over currency and over Europe.

     
  50.  
    1158:

    The BBC's Norman Smith says Mr Salmond's view is that once the campaigning is over everyone will sit down at the table and common sense will prevail and negotiations can begin.

     
  51.  
    1200:

    Norman Smith says the problem for Alex Salmond is that Mark Carney and EC president Jose Manuel Barroso are not part of the "argy-bargy" of the campaign.

     
  52.  
    1201:

    The BBC's Norman Smith says Mr Salmond was capable of putting strong arguments for a currency union and for Scotland's membership of the EU but he could not guarantee they would happen. These are things beyond his control, he says.

     
  53.  
    Pen Turnbull

    Tweets: I wonder how many companies are including discussion of #indyref in their 2014 business continuity prog? Potential for major implications...

     
  54.  
    1203:

    Angus Armstrong, director of macroeconomic research at the National Institute of Economic and Social Research, told the BBC news channel the chancellor made his position clear last week but Mr Salmond's response seemed to be that this would change after the referendum. Dr Armstrong says a currency union would be very difficult and he was wondering what currency strategy the Scottish government would pursue if it could not negotiate a union with the rest of the UK.

     
  55.  
    1207:

    Former Labour chancellor Alistair Darling, head of the anti-independence Better Together, says Alex Salmond was speaking as if last week's announcement had never happened. He called for Alex Salmond to outline his Plan B.

     
  56.  
    1209:

    Mr Darling says it is quite simple. "If you want to avoid the extra costs for businesses in Scotland and in the rest of the UK, do not vote for separation," he says.

     
  57.  
    1210:

    Mr Darling says the difficulties with transaction costs between England and Scotland are one "entirely of his own making".

     
  58.  
    1211:

    Mr Darling says Alex Salmond would say anything if it gets him out of a hole. He says Mr Salmond used to call sterling a "millstone" round Scotland's neck.

     
  59.  
    1212:

    Mr Darling points to the Euro currency union for the problems which would be caused.

     
  60.  
    1213:

    Mr Darling says the "wheels are coming off the Nationalist wagon" over the currency union and over Europe.

     
  61.  
    Jacqui Morris

    Tweets: Fed up with #indyref just want facts, how much is it going to cost? rather than bluster and bullying from both parties.

     
  62.  
    1215:

    People want to know what their money is worth, Alistair Darling says. The value of the pound in your wallet or purse actually excites people, he says.

     
  63.  
    1216:

    Alistair Darling says Alex Salmond is "reckless" to threaten to default on Scotland's share of the debt if he cannot get a currency union.

     
  64.  
    1217:

    BBC's chief political correspondent Norman Smith says Alex Salmond thinks that telling Scots they cannot have a currency union will fuel a backlash against the Westminster government.

     
  65.  
    1219:

    The BBC's Norman Smith says that Mr Salmond reckons that after a vote for independence people will cut the rhetoric and sit down and seriously negotiate. Mr Salmond says this is all bluff, according to Norman Smith. "Cometh the day that Scots vote for independence then the European Union will negotiate about membership and the UK treasury will negotiate about membership of sterling, Mr Salmond thinks."

     
  66.  
    1220:

    But Norman Smith says this is a high-risk strategy because these are two key pillars of the argument for independence. What do the Scottish people think? We don't yet know, he says.

     
  67.  
    Joe Pike

    Tweets: Definite change in @TogetherDarling's tone in media interviews. Fired up, angry, passionate. But do voters like that? #indyref

     
  68.  
    George Eaton

    Tweets: Salmond shouldn't assume that EU membership is a vote winner. Many polls show Scots are as eurosceptic as the English.

     
  69.  
    Dr Matthew Ashton

    Tweets: I dislike George Osborne as much as anyone, but Alex Salmond didn't do a convincing job of replying to him at all #indyref

     
  70.  
    1224:

    Responding to Mr Salmond's speech, economist Dr Angus Armstrong told the BBC news channel the current stock of UK debt is a UK liability so technically Scotland would not be in default if it did not pay its share. However, he says the rhetoric of saying Scotland could walk away from that debt if it did not get a currency union was "not particularly responsible" in terms of how Scotland would be run after independence. "It is quite serious stuff to suggest you are going to renege of what most people would consider to be a fair share of your liability," Dr Armstrong says.

     
  71.  
    Steve P

    Tweets: SNP view of "independence" very similar to that of teenager leaving home for first time to head off for Uni #ScotlandTheNotSoBrave #indyref

     
  72.  
    1231:

    That's the end of our live page on Alex Salmond's speech on currency union

     

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