Gloves come off in Scotland row
GEORGE Osborne’s tough stance on currency union with Scotland has sparked a political war of words, as the Scottish National Party refuses to yield to Westminster’s warning that a vote for independence would mean giving up the pound.
In a departure from the norm, Osborne, Liberal Democrat Danny Alexander and Labour’s Ed Balls all warned yesterday that Scotland would not be allowed to keep sterling if it voted for independence. “If Scotland walks away from the UK, it walks away from the pound,” the chancellor said in a speech in Edinburgh.
And in an unprecedented move, permanent secretary to the Treasury Sir Nick Macpherson, the longest serving civil servant in Whitehall, wrote a letter demolishing Scotland’s plan to keep the pound.
In it he said: “I would advise strongly against a currency union,” adding: “If you follow Treasury advice and this week rule out a currency union in the event of Scottish independence, you can expect the Scottish government to threaten not to take on its share of the United Kingdom’s debt. I do not believe this is a credible threat.”
The letter is a startling departure for Macpherson and the whole civil service, as advice to ministers is not normally made public. But the SNP hit back, with deputy first minister Nicola Sturgeon warning that “neither George Osborne nor anyone” would be able to prevent an independent Scotland from keeping the currency.
“This is a panic move which will backfire spectacularly. People won’t take kindly to the Westminster establishment ganging up to try and bully Scotland,” she added. The race is now on for the SNP to develop a credible alternative to currency union, something critics say it has failed to do so far.
David Watt, executive director of the Institute of Directors Scotland, warned: “Currency is such a massive issue for business that a lack of clarity leads to uncertainty. The financial services industry in particular has concerns in this area.”
Alexander challenged Salmond to a public debate last night, telling the Daily Mail: “It’s time that Alex Salmond got out of his bunker and started to engage in the debate.”