‘Independent Scotland would have to leave pound’

Comment on this story


George Osborne10101

Reuters.

Britain's Chancellor of the Exchequer George Osborne.

Edinburgh - British finance minister George Osborne warned Thursday that Scotland would have to leave the pound if it voted to become independent.

Osborne said there was “no legal reason” why the rest of the United Kingdom would have to share the pound with Scotland if its people opt to break away in a referendum on September 18.

The Scottish government wants Scotland to retain the pound in the event of independence.

But Osborne told an audience in the Scottish capital Edinburgh that such a currency union would “not work” and was “not going to happen”.

“If Scotland walks away from the UK, it walks away from the UK pound,” he said.

Backing up Osborne's speech, Britain's three main political parties were to join forces to say that they would not let an independent Scotland retain the pound.

Scotland's Deputy First Minister Nicola Sturgeon dismissed the warnings as the “Westminster establishment” trying to bully Scotland.

In the British government's strongest intervention in the independence debate so far, Osborne said the pound was “one of the oldest and most successful currencies in the world”.

He noted that the Scottish economy was growing faster than those of England, Wales and Northern Ireland.

“These hard-fought gains could be easily lost,” Osborne said.

“And nothing could be more damaging to economic security here in Scotland than dividing our United Kingdom.

“I want Scotland to keep the pound and the economic security that it brings,” he added.

First Minister Alex Salmond's Scottish National Party (SNP) has claimed an independent Scotland would have the right to retain the pound.

But Osborne, the Chancellor of the Exchequer, said: “There's no legal reason why the rest of the UK would need to share its currency with Scotland.”

Osborne said the SNP had offered “nothing more than confusion, wild assertion and empty threats”.

He dismissed Salmond's warning that an independent Scotland would refuse to accept its fair share of national debt if the United Kingdom refuses to share the pound.

“That's like saying: because my neighbour won't agree to my unreasonable demands, I'm going to burn my own house down in protest,” Osborne said.

He said: “They are like the angry party to a messy divorce. But the pound isn't an asset to be divided up between two countries after a break-up as if it were a CD collection.”

Osborne repeatedly cited Bank of England Governor Mark Carney's comments last month that an independent Scotland would have to cede some sovereignty if it wanted currency union, or risk the problems shown by the eurozone.

Osborne later tweeted: “I couldn't recommend a currency union with a separate Scotland; I don't think any other Chancellor could either.”

He said he was taking the “exceptional” step of publishing legal advice to the government from the Permanent Secretary to the Treasury, the most senior civil servant in the finance ministry, on the possibility of Scotland retaining the pound.

The advice says: “I would advise you against entering into a currency union with an independent Scotland.

“There is no evidence that adequate proposals or policy changes to enable the formation of a currency union could be devised, agreed and implemented by both governments in the foreseeable future.”

Prime Minister David Cameron took a softer tone in a speech last week, urging all parts of the United Kingdom to persuade their Scottish friends and family to vote against independence in the September 18 referendum. - Sapa-AFP


sign up
 
 

Comment Guidelines



  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.

     

Join us on

IOL-Social networks IOL-Social networks IOL-Social networks IOL-Social networks

Business Directory