Could fears over their future currency sway the Scottish people against independence?

YES
The currency debate will matter when voters go to the ballot box because an independence referendum cannot just be about the heart, it must also be about the head. Leaving a union – be it the UK or the EU – might seem obvious to someone who is already convinced, but most voters will need reassurance that, if they jump, they will have somewhere safe to land. Alex Salmond made great play of his plan for an independent Scotland, boasting of the hundreds of pages it took up. But it has now fallen apart under the slightest scrutiny. Salmond seems to think it’s politically risky to argue for full independence, and is instead trying to build a halfway house based on a currency union. The fact that his fellow Yes campaigners have resorted to claiming George Osborne’s intervention is “bullying” shows quite how badly this has hurt the Yes campaign. They tried to build a concrete idea of independence, but now it looks as solid as a mirage. Mark Wallace is executive editor of ConservativeHome.
No
An independent Scotland may be better off outside a currency union with the rest of the UK, so the Scots shouldn’t worry much. Scottish banks could continue using the pound as a reserve on which they issue their own promissory notes, as happens already. Banks would have to hold higher reserves and could arrange private clearing-houses to provide liquidity to others in need. The only real difference would be that the Bank of England would not be there to bail out insolvent banks, which may mean that RBS would relocate to England. But the Latin American states which use the US dollar have highly stable banking systems precisely because their banks cannot expect help if they run into trouble. Neither should Scots fear life outside the EU – Iceland, Norway and Switzerland do well enough. The debate should hinge on a much bigger question: would Scotland be a statist throwback to the last century, or an open nation looking forward to this one? Sam Bowman is research director at the Adam Smith Institute.

Mark Wallace

Mark Wallace is executive editor of ConservativeHome.

Wednesday 09 July 2014
Mark Wallace, executive editor of ConservativeHome, says Yes.
Wednesday 22 May 2013
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Alex Salmond
Wednesday 20 August 2014
When Scottish voters go to the polls in their independence referendum next month, they may ultimately make their decision on the basis of a single question: if we voted Yes, what currency would we use?
Thursday 14 August 2014
Sam Bowman, research director at the Adam Smith Institute, says Yes.
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City A.M.'s Opinion pages are a place for thought-provoking opinions and views. These are not necessarily shared by City A.M.

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