Gaffe as Tory leader supports independent Scotland using sterling

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by a Newsnet reporter

Leader of the Scottish Conservatives Ruth Davidson has caused embarrassment for the Tories ahead of Prime Minister David Cameron’s visit to Scotland today by supporting the use of the pound in an independent Scotland, directly contradicting briefings by her Westminster colleagues.

In comments made in the Sunday Post (12 Feb), the Scottish Tory leader “seized on” a YouGov poll showing that a large majority of Scots favour Scotland continuing to use the pound.  However the poll in question was about an independent Scotland continuing to use sterling – matching SNP policy – and also showed that there was support across the UK for an independent Scotland to use sterling.

Previously, sources close to the Chancellor of the Exchequer warned that an independent Scotland would not be allowed to use the pound.  However critics have pointed out that it’s not within the power of the Westminster Government to refuse to allow an independent Scotland to continue to use sterling, which is a fully tradable currency.  There are many examples of countries unilaterally adopting a tradable currency as their own, without any agreement from the issuing country.  Within Europe, Montenegro, Kosovo and Andorra all use the euro as currency without having reached any agreement with the EU to do so.

Closer to home, the Irish Republic continued to use sterling after Irish independence.  The former currency of the Republic of Ireland, the punt, was tied to the sterling at par in a monetary union with the UK which lasted until 1979, when Ireland joined the European Exchange Rate Mechanism, the precusor to the euro.  For over 50 years between Irish independence and Irish membership of the ERM, the pound sterling and the punt circulated freely throughout Ireland.  The Republic of Ireland and the UK even adopted decimalisation on the same day, 15 February 1971, and harmonised the size and shape of coinage.  

The YouGov poll found large support for the retention of sterling as the currency of an independent Scotland.  Excluding don’t knows, 74% of Scots favour retaining the pound as the currency of an independent Scotland, with only 9% preferring the euro, and 18% a new Scottish currency.  51% of respondents across the UK also shared the view that an independent Scotland should retain the pound sterling, with 14% favouring Scottish membership of the euro, and 35% saying Scotland should adopt its own currency.  

The poll also found widespread support for the view that Westminster should not put any obstacles in the way of an independent Scotland retaining the pound.  84% Scots and 54% of UK-wide respondents agreed with this position, as did, apparently, Scottish Conservative leader Ruth Davidson.

SNP MSP John Mason, a member of the Scottish Parliament’s Finance Committee, said:

“Ruth Davidson has now created even more confusion in the ranks of the anti-independence parties by endorsing the SNP’s policy for sterling.  Sources at Westminster have briefed that Scotland wouldn’t be able to use the pound, followed by Michael Moore conceding we would.  Now Ruth Davidson backs sterling as the answer to the poll question ‘Which of the following do you think would be best for an Independent Scotland?’.

“Just what is the position of the Tory party on this?

“Of course the interesting thing about these suggestions is not just that they are both untrue, but also that they are economically illiterate – since sterling is a fully tradable currency, the UK Government has absolutely no power to stop an independent Scotland from using it.

“We will have exactly the same relationship with the central bank as the Westminster Chancellor – who has not set interest rates since 1997.

“More importantly, why would any sensible person wish to stop England and Scotland sharing a currency?  As the poll reveals, the majority of Scots want to stay in sterling when Scotland becomes independence, and that is exactly what the SNP intends to do.

“The anti-independence parties’ incoherence on the currency question is just another example of their desperate clutching at straws and will only confirm that Scots shouldn’t trust a word they say.”

Ms Davidson’s gaffe is the second time in recent weeks that the Scottish Conservative leader has embarrassed her colleagues in Westminster.  Despite attempts from the anti-independence parties to claim that the Scottish Government could not be trusted to propose a fair and straightforward question in the independence referendum, when First Minister Alex Salmond revealed the question to Holyrood, Ms Davidson reponded that it was “a fair and decisive legal question, which I welcome.”

Ms Davidson’s statement has seriously undermined attempts by the Conservatives in Westminster to claim that the question is biased and unfair.