Scotland politics

Scottish independence: Treasury official says currency union advice was 'my duty'

George Osborne
Image caption Chancellor George Osborne ruled out a currency union in February

A senior UK civil servant has said it was his decision and "duty" to publish advice against a currency union with an independent Scotland.

Sir Nicholas Macpherson said he put his name to the advice because the Scottish government were "casting aspersions on the UK government's integrity".

Chancellor George Osborne has ruled out sharing the pound if Scots back independence.

The SNP said: "Westminster's currency bluff has completely crumbled."

Sir Nicholas made the comments to the MPs on the Commons Public Administration Committee, who were examining civil service impartiality.

In February the chancellor made a speech in Edinburgh in which he said a vote for Scottish independence in September's referendum would mean walking away from the pound, a position backed by Labour and the Liberal Democrats.

The Treasury also published analysis of a sterling union but took the additional, and unusual, step of publishing civil service advice from Sir Nicholas, the Treasury's permanent secretary, which argued strongly against a currency union.

Usually, civil service advice to ministers is kept private.

'Casting aspersions'

Sir Nicholas said he put his name to the "short covering note" to the Treasury analysis because "the soundness of our currency, sterling, is absolutely central to the national interest".

He continued: "Throughout the debate on economic issues the Scottish government has sought to cast doubt on the British government's position.

"It has claimed that we are blustering, bluffing - in effect, casting aspersions on the UK government's integrity.

"My view in this case, and it's a very exceptional case, is that if publishing advice could strengthen the credibility of the government's position, then it was my duty to do it."

Image caption Chancellor George Osborne, Labour shadow chancellor Ed Balls and Liberal Democrat Chief Secretary to the Treasury, Danny Alexander, want to block a currency union

Sir Nicholas said Mr Osborne had not asked him for the note.

"It reflected discussion with the chancellor but ultimately this was my call," he said.

"The chancellor is a traditionalist in his approach to the civil service. I am quite certain that if I had said that I did not want to publish this advice that he would not have pressed me."

In March the Guardian newspaper quoted an unnamed UK minister, who said a deal could be done to allow an independent Scotland to use the pound. Mr Osborne and Treasury Chief Secretary Danny Alexander denied the claim.

'Currency bluff'

Responding to Sir Nicholas's comments, SNP MSP Kenneth Gibson, convener of the Scottish Parliament's Finance Committee, said: "Westminster's currency bluff has completely crumbled.

"Regardless of the Treasury's actions we know the real position of the UK government, as an unnamed government minister admitted last week that 'there will be a currency union… everything would change in the negotiations if there were a Yes vote'.

"Even Alistair Darling himself has said that a shared sterling area is 'desirable' and 'logical'. It's time for the No campaign to stop the foolish bluffing, put its money where its mouth is and back sharing the pound."

A spokesperson for Better Together, which campaigns for Scotland to remain in the UK, said: "A currency union would not happen. It wouldn't be in the interests of a separate Scotland and it wouldn't be in the interests of the continuing UK.

"The prime minister, the chancellor, the shadow chancellor, the chief secretary to the Treasury and the permanent secretary at the Treasury, who has reaffirmed his position today, have all said that a currency union is off the table."

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