Beveridge trashes Treasury’s ‘fear factor’ over currency union


  By Lynn Malone
A Scottish government adviser has accused the UK Chancellor of creating a “fear factor” over an independent Scotland’s currency options.
Crawford Beveridge, an economic expert and chairman of the Scottish Government’s council of economic advisers also accused George Osborne of “bluffing”.

In an interview with the BBC Mr Beveridge said: “…he’s part of a party that does not want to be known for being the party in power when the UK was broken up.”

“He, like the rest of his colleagues down there, are doing what I would do, which is to put as many fear factors into the environment as I possibly could.”

Mr Beveridge is chairman of the Fiscal Commission Working Group who advises the Scottish government.  It published its first report into the “macroeconomic framework” of an independent Scotland in February and recommended the adoption of a formal sterling area.

The group say that a formal currency union between Scotland and the rest of the UK would be “in the interests of both economies”. 

The accusations came after Westminster politicians said it was “unlikely” the rest of the UK could agree to a formal currency.  The currency issue has been one of the most antagonistic arising in the independence referendum debate.

But Mr Beveridge told BBC News that sharing a currency with the rest of the UK would be best because of the high levels of cross-border trade.

He said: “Nobody’s said it can’t be done and so I am confident that’s what we’re going to get to.”

Mr Beveridge added that Scotland could still be successful using the pound outside a monetary union, with its own currency or in the Euro.

He said: “If it all blew up then there are at least these three other options we could go and look at very seriously.”

The Fiscal Commission are unhappy that they have been ignored by the UK government and said in the Times newspaper earlier this week they were disappointed that “where the UK Government paper poses questions around governance, sustainability and financial regulation, it ignores issues which we have already addressed as part of our proposal.”

They have renewed calls for “technical discussions” on currency to take place between the two governments before the referendum in September 2014.

The group said “We repeat our call for technical negotiations and discussions to take place in advance of the referendum and believe that based on our proposals there is an opportunity to offer clarity ahead of the referendum.”

A Treasury spokesman said the Holyrood administration had failed to provide answers to “crucial questions”, according to the BBC.

He added: “The Fiscal Commission want Scotland to keep the pound; the best way to ensure this is for Scotland to remain inside the United Kingdom.”