Whilst I’m no fan of the chancellor, what he will say tomorrow will be a perfectly rationale defence of the interests of the rest of the UK if Scotland voted for independence.
The SNP’s reaction to the news that George Osborne is set to reject their plans for a currency union with the rest of the UK should Scotland vote for independence has been predictable to say the least.
In his response to news, Scotland’s finance secretary John Swinney has accused the chancellor of seeking to “bully Scotland”. Good party political stuff it might be, but what Osborne’s speech tomorrow will highlight is the naivety of the SNP’s proposals.
The fact remains that it would not be for an independent Scotland to dictate to the rest of the UK whether it would be able to stay within Sterling.
Yes it is true that the pound is as Scottish as it is English, but the very act of independence would mean divorcing Scotland from the rest of the UK. It would end Scottish inclusion in a UK wide military, it would end Scottish representation within the UK wide diplomatic service and ultimately it would end Scottish claims to remain within Sterling.
What Osborne’s speech will do is to highlight the SNP’s failures to convince the very people they would need to convince that an independent Scotland, keeping the pound, would be good for the rest of the UK.
Already Wales’ first minister Carwyn Jones has opposed the idea of a currency union on the basis that it would not be in the best interests of Wales. Speaking in November, he declared:
“Given the experience of the Eurozone in recent years, and the uncertainty which surrounded the various bail-outs, I am not convinced that a shared currency would work from the Welsh perspective.
“I would be uncomfortable being part of a currency union where there are competing governments trying to run it. If there is a disagreement, who has the final say? This is a recipe for instability and these things matter, particularly in times of crisis.”
Is this bullying Scotland as John Swinney might put it? Or is it a perfectly rationale argument put forward by a leader standing up for the interests of his nation?
Likewise, is it bullying Scotland when the ratings agency Fitch warned in December that an independent Scotland remaining in a sterling zone would create instability?
And is it bullying when the former deputy leader of the SNP Jim Sillars last month dubbed Alex Salmond’s currency plans as “stupidity of stilts”?
Whilst I’m no fan of the chancellor, what he will say tomorrow will be a perfectly rationale defence of the interests of the rest of the UK if Scotland voted for independence.
Far from bullying Scotland, it is a warning to voters that they might promise the earth, but on the currency union the SNP would need to embark on tough and unpredictable negotiations with the rest of the UK with no guarantee of success.
Rather than sniping and throwing accusations of bullying around, Swinney would do better to persuade the UK why it should accept an independent Scotland within a Sterling zone. So far, he’s failed quite spectacularly to do so.
57 Responses to “The SNP are wrong on currency union”
NMB
What do you think the money markets would make of Scotland walking away from a £150billion liability? Get a grip, you would get the credit rating of a third world country – do you not understand confidence and the money markets?
NMB
Andy – you are spot on.
When it suited the SNP they werent interested in sterling but now the Euro has gone belly up they are crying their eyes out – but apparently they are doing rUK a favour? Mmmmmm the rUK economy is 10 x the size of the Scottish economy – who would have most to gain from a currency union? Who would get bailed out by rUK if we have another banking crisis. Yes, the SNP want independence but they want the rUk to be the fall guy, the lender of last resort. What world do these people live in?
NMB
Two questions – if the whole SNP independence ideal is built around a sterling currency union, why did they not find out the answer about whether it would happen before starting this whole movement? You wouldn’t buy a house and then see if it has foundations would you?
Perhaps more important for Scotland – why is there no Plan B?
My prediction – the SNP will spit the dummy out and come out with the “Well we didnt want sterling anyway, lets go for the euro” or they will say “But we can have a currency union without the approval of rUK”. The fact is you cant, you can use sterling or peg your own currency to sterling but you would have no input or control over interest rates or monetary policy – these would all be put in place to suit the rUK economy and could literally ruin Scotland. That in my book is not independence – without a currency union everything will come crashing down.
NMB
That’s it quit while you are ahead – not. Did you actually listen to what Mark Carney said? Or did you do the SNP trick of putting your fingers in your ears and should loudly when he said something you didn’t like?
He said that an independent Scotland could enter a currency union with sterling but would have to hand over the power to set interest rates and monetary policy to a body which would set these in favour of rUK and not Scotland.
NMB
So you want independence but you are willing to let an unconnected third party set interest rates and monetary policy on your behalf – major policies which will impact your economy but which will be set to suit rUK?