Salmond lays down law to Osborne – Debt and Pound go together


  By Martin Kelly
Scottish First Minister Alex Salmond has insisted that a currency union between a newly independent Scotland and the rest of the UK is in the best interests of both countries.
In a speech today, Mr Salmond outlined what he said were the reasons George Osborne’s threat to rule out an agreement between a newly independent Scotland and the rest of the UK would be damaging to both parties.

Speaking in front of an audience of business leaders, the First Minister said a refusal to introduce a currency-union, he labelled the ‘George Tax’, would cost businesses south of the border “many hundreds of millions of pounds”.

Mr Salmond described the UK Chancellor’s decision as more a “campaign tactic” than an economic assessment.

The First Minister also criticised what he called a “one sided Westminster view” of what constituted assets and liabilities.

Mr Salmond said the problem with taking that approach was obvious to anyone across the country, “If there is no legal basis for Scotland having a share of the public assets of the bank of England, nationalised in 1946, then there is equally no legal basis for Scotland accepting a share of the public liability of the national debt”.

However, responding to attacks from Unionists who have accused the First Minister of threatening to refuse to shoulder a share of the UK’s debt burden, Mr Salmond said the Scottish Government would adopt the issue with “goodwill”.

“We are willing, despite the legal tradition, to accept a share of liabilities, but on the basis there’s also a share of assets.

“One of which of course is the Bank of England which holds title to almost a third of UK debt.”

Mr Salmond said the debt issue weakened the hand of the Chancellor, and said his speech last week had backfired badly.

“To be told that we had no rights to assets jointly built up is as insulting as it is demeaning” he told the audience.

“To be told there are things we can’t do will elicit a Scottish response that is as resolute as it is uncomfortable to the No campaign … it is … Yes we can.”

On Labour Shadow Chancellor Ed Balls’ decision to join with the Tory Chancellor, the First Minister said it would be seen as “one of Labour’s biggest misjudgements”.

“Siding with the man who is intent on dismantling the post-war welfare state, imposing permanent austerity, will haunt the two Eds.”

He said people had been left “dismayed” at the actions of the Labour party and that it had reignited the independence debate in many people’s eyes.

He concluded by admitting honest differences on both sides of the independence campaign.  However Mr Salmond highlighted Scotland’s huge resources which included the benefits from oil and gas which had meant Scotland had generated more tax revenues per head than the rest of the UK as a whole over the last thirty years.

Aside from oil and gas, said Mr Salmond, Scotland was rich in human talent and other natural resources such as renewable energy.  The choice for Scots this September, he said, was whether to take charge of our own destiny or opt for the ‘hope for the best’ plan from the No campaign.

Earlier Mr Salmond had dismissed comments from EC President Jose Manuel Barroso who on Sunday had claimed Scotland’s EU membership was next to impossible.  The SNP leader insisted that the EU would find a pragmatic way to accommodate a newly independent Scotland.

The First Minister drew attention to the democratic and inclusive ethos of the European Union and said: “Not to recognise the democratic will of Scotland would run counter to the entire European Union ideal of democratic expression and inclusion.

“It would pose a challenge to the integrity of the European Union, even greater and more fundamental than the threat of British withdrawal.

“That is why of course than no member state has suggested they would seek to block Scottish membership.”

Responding to the First Minister’s speech, Scottish Labour leader Johann Lamont said: “Instead of complaining about being told some home truths, Alex Salmond needs to tell Scotland what are his alternatives.”

UK Prime Minister David Cameron joined the Scottish Labour leader and said: “Alex Salmond is now a man without a plan,”

He added: “He told us he wanted to have a currency union and that now looks under threat.

“He’s told us that he wanted Scotland as part of the European Union – that is under threat.”

Mr Salmond’s speech in full.