First the EU shambles, now SNP accused of “wilfully misleading the people” on currency union


There is unlikely to be much Christmas cheer in the official residence of the Scottish first minister, Bute House; no sooner had the president of the European Commission, Jose Manuel Barroso, made crystal clear an independent Scotland would have to apply to rejoin the European Union than the next major plank of SNP policy has been knocked down, writes Ed Jacobs

Under plans by the nationalists, an independent Scotland would retain the pound with a guaranteed seat on the Bank of England’s Monetary Policy Committee, this despite such a move being rejected by the Treasury. Indeed, in September, the chancellor concluded that if Scotland decided to go it alone it could not keep the pound without the remainder of the UK approving its tax and spending levels.

Alex-Salmond-Nicola-SturgeonIn a report on the issue, however, Mark Allan – a specialist with AXA who at one time gave advice to the Monetary Policy Committee – has questioned the premise of the SNP’s policy.

The document, a briefing paper for investors, is quoted in the Herald as concluding:

“An independent Scotland almost certainly means a new currency.”

The Scottish government’s proposals to enter a currency union, the briefing adds, would:

“…surrender almost all fiscal sovereignty to London.”

The paper also warns an independent Scotland would have to take on £120 billion of national debt at a time of falling North Sea oil production, a point previously made by the Institute for Fiscal Studies.

Allan is quoted in the paper as saying:

“First minister Alex Salmond said an independent Scotland would continue using sterling, effectively giving birth to a ‘sterling zone’. I doubt this will be possible.”

Arguing the Bank of England would place strict conditions on Scotland as the price of currency union, he continued:

“Given the Scottish Parliament already has substantial autonomy on domestic issues, if the first act of an independent Scotland was to surrender almost all fiscal sovereignty to London in order to continue using sterling, one could reasonably ask: what was the point of independence?

“Facing such a choice, an independent Scotland would surely have to issue its own currency and make its own way in the global financial markets.”

It comes as the Bank of England has denied suggestions by the Scottish government it is engaged in a sustained dialogue with ministers at Holyrood on the issue.

Addressing the House of Lords economic affairs committee on Tuesday, finance secretary John Swinney spoke of  a “very helpful dialogue” with the Bank on the SNP’s plans for a monetary union, declaring “points raised by the bank” would “inform the model we bring forward”.

His comments, however, have been roundly rebuffed by the Bank, with a spokesman explaining:

“The Bank of England did no more than answer technical questions from representatives of the Scottish government.

“We have not entered a dialogue about the possibility of changing monetary arrangements for Scotland in future.”

Accusing ministers of “wilfully misleading the public”, shadow Scottish secretary, Margaret Curran, said of Swinney’s remarks:

“He tried to mislead not just the House of Lords but the people of Scotland when he claimed he was in dialogue with the Bank on an independent Scotland keeping the pound.

The Bank of England has now made clear that no such dialogue has taken place.

“They misled the people of Scotland on whether they had EU advice. They misled the people of Scotland on our membership of the European Union. Now John Swinney has joined Nicola Sturgeon and Alex Salmond in wilfully misleading the people of Scotland on something as basic as the currency we should have.”

Challenged on the issue during First Minister’s Questions yesterday, Alex Salmond told MSPs:

“The SNP government has pointed out – and I quote exactly – that:

“As indicated by Mr Swinney, the Scottish government has engaged with the Bank of England to discuss factual and technical matters around proposals for a macroeconomic framework.”

“That is exactly what has happened.

“The Bank of England does not – clearly – take a position on the question of independence for Scotland; that is not its job. However, it has responded, as it should as a public body, to a request for factual information, and it has engaged with a fiscal commission that – I remind the Labour Party – contains eminent economists, including two Nobel laureates.”

See also:

Swinney on Scotland currency – more questions than he answers?February 2nd, 2012

Bain: Salmond has questions to answer, because the evidence doesn’t support himJanuary 24th, 2012

Questions multiply over financial status of an independent ScotlandJanuary 20th, 2012

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  • LB

    Nothing like misleading and lying to people about their pensions.

    Not a debt is it.

    How much is owed?

    4,700 billion rising above inflation each year.

  • http://twitter.com/tristanpw1 TristanPriceWilliams

    We have been expecting this sort of thing. All the unionists in the country, including many being paid by the London government to do it, are trying to find anything they can to discredit the SNP and other unionist parties, because they desperately need our oil. Without it never mind the doubt about the AAA status. It would be “junk” tomorrow.

    They’v all seen letters that haven’t yet been written; they are all busily interpreting anything they can find as doom and gloom for too wee to poor, too stupid, too drunk, Scotland And all because the alternative of talking up the union is a dead duck. More of the same misery of being the most indebted country in the West, with a future for anyone not in the millionaire class of unbounded misery, poverty and exploitation by big business which will shortly own everything, including schools and hospitals.

    They keep telling us it is the most successful union in the world, ever, bar none. All I see is people sitting in shop doors with blankets around them begging for money. Oh, and students at St Andrews running along the beach pouring £600 of second rate champagne over their heads to show how incredibly rich they are.

    Still, we do have the bomb, and more embassies than anyone else, not to mention massive clout in the EU (cough, splutter).

  • http://twitter.com/tristanpw1 TristanPriceWilliams

    I should add that Curren has form on lying through her teeth. She criticised the SNP (in a speech at the TUC) for wasting the money it reveivedt for the G4 licences on constitutional affairs, when she either knew, or should have known (because it had been discussed in the London parliament, where she works, that Scotland would get no money at all from that deal. It would be all kept by London.

  • Newsbot9

    Yes, you love using your debt as a weapon for cuts, because you refuse to pay up. Keep trying to abolish pensions and kill more!

  • Newsbot9

    Ah yes, good collectivism. You lump together anyone who dares to consider themselves British, and spits at them, while claiming Scottish exceptionalism.

    Oil has nothing to do with Britain’s AAA rating, that’s down to the City, and the corrupt way in which rating agencies work. And given your unconditional support of the Tories for Britain, that is indeed your stance.

    You keep trying to rob your own people, yes, with a leader in bed with Murdoch. Demanding a blank cheque for your own aims. Refusing to admit the truth about anything. It’s pathetic. Grow up, and admit this is a referendum and that you need to argue your side rather than constantly spit at the British.

  • Newsbot9

    Wasted cash is wasted cash. You’re making excuses again,

  • Brian

    These writers at Left Foot Forward (who never respond to comments, so this is essentially a waste time…) haven’t got the honesty to proclaim their Labour party allegiance on this site, so the motivation for their constant stream of biased propaganda is hidden. The motivation certainly doesn’t seem to be the well-being of the Scottish people, but may be a blind adherence to dogma and a fear of losing a traditionally socialist power base. Or, more likely, they just do as they are told by the party hierarchy with no actual thinking required on their part

    A glaring fact here is that no actual case for the advantages of Union is presented, just a constant stream of negativity – ad hominem attacks and fear-mongering.

    I wonder why you’re trying so hard?

  • Newsbot9

    So only you are allowed to use propaganda? Only you are allowed to make claims? As ever, you’re making blind accusations – the authors here use their real names, nothing hidden and the conspiracy theory you see creeping up is entirely in your imagination.

    And yes, why are your pro-seperatist trolls pushing out a barrage of comments, rather than writing your own articles and reasons? Truthful ones, I mean.