Alistair Darling backs currency union between Scotland and rUK


darling  By a Newsnet Reporter 

The chairman of the Better Together campaign against Scottish independence has said that it would be “desirable” and “logical” for an independent Scotland to keep the pound.

In an interview with Gordon Brewer on Thursday’s Newsnight Scotland programme, Alastair Darling said that a currency union between Scotland and the rest of the UK would be the best available option for both parties.

Echoing remarks made last month by fellow Unionist and Scottish Lib Dem leader Willie Rennie, Mr Darling said:

“Of course it would be desirable to have a currency union, but you also have to understand there are consequences. Because a currency union means you have both got to agree your budgets.  You’ve both got to agree how much you can tax, spend and borrow.”

However, the ex-chancellor immediately seemed to contradict himself by suggesting the this would only apply to Scotland’s budget, saying: “This is something we all agree on, you’ve got two partners who have to agree Scotland’s budget.”

When pressed by Brewer on whether a monetary union with Scotland would be in the interests of the rest of the UK, Darling replied: “Of course! If you have independence, or separation, of course a currency union is logical.”

Commenting on the interview, SNP Treasury Westminster Spokesperson Stewart Hosie MP said:

“Because of their very negativity, the No campaign are all over the place when it comes to having a positive vision for Scotland’s future.

“Last month, the Scottish Lib Dem leader Willie Rennie clearly implied his support for an independent Scotland keeping the pound, when he said about the issue: ‘We will work with our partners in the United Kingdom, who we’ve worked with before.’

“And last night the Chairman of the No campaign, Alistair Darling, went even further – saying that it would be ‘desirable’ and ‘logical’ for an independent Scotland to retain sterling, as indeed it would.

“A sterling zone is in the interests of Scotland and the rest of the UK, and with independence Scotland would also have the economic and fiscal powers needed to grow the economy and boost jobs.

“In other words, if there is a Yes vote in the referendum, the No campaign now supports the policy that the Scottish Government is advocating – which the anti-independence parties spend all their time attacking.

“This is a very significant admission from Alistair Darling – it is as helpful to the Yes campaign as Mr Darling’s failure the vote against the Tory benefit cuts in the House of Commons this week is damaging to No.”

Last year, during evidence gathering sessions of the Commons select committee on Scottish Affairs, a number of expert witnesses gave their views on Scotland retaining the pound and entering a sterling zone with the rUK.

Professor John Kay: — “If one is pushed towards looking at the groat [Scottish currency] seriously, it is mainly because in the present circumstances it might be quite difficult to negotiate what would plainly be the best arrangement, which would see the Bank of England continuing to be the monetary authority for both Scotland and England, with a substantive monetary union between the two independent states.”

Professor Charlie Jeffery: — “The debate here is now dominated by that single option—if Scotland votes yes, it will use the pound sterling. That is an option that has attractions for the advocates of independence by providing a sense of reassurance and continuity, but I think it is probably also an option that has significant popular resonance. So I think in both senses, with a special emphasis on popular resonance—we perhaps all too easily lose sight of what citizens think and want—the pound sterling is the best option in an independent Scotland.”

Professor Alex Kemp: — “From the point of view of the balance of trade, oil exports would be a big plus for the Scottish economy. If Scotland were part of the EU, there would be an obligation not to discriminate against EU partners on exports. It would depend on the open market as far as Europe was concerned. One point is worth bearing in mind. Although it is a big plus for Scotland, it would help the rest of the UK as well. If Scotland were in the sterling area, it would help sterling as well, as there would be a need to acquire sterling to buy the oil.”

Jeremy Peat: — “There are a whole host of interdependencies between the economy of Scotland and the economy of the rest of the United Kingdom. That constitutes a very good reason, at least initially, for the maintenance of exchange rates to create certainty between Scotland and the rest of the UK, and hence continuing with sterling as the currency has advantages.”