Scottish Conservative Deputy Leader backs currency union in event of Yes vote

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  By a Newsnet reporter  
 
Deputy leader of the Scottish Conservative Party Jackson Carlaw has distanced himself from UK Chancellor George Osborne’s rejection of a currency union with an independent Scotland, agreeing that it would be “rational and sensible” to keep the pound.
 
In a blow for Chancellor Osborne, Mr Carlaw added that he would be “manning the barricades” to keep the pound and said he’d argue for Scotland to be retained automatically within the European Union.

Speaking on Brian Taylor’s Big Debate programme on BBC Radio Scotland on Friday, Mr Carlaw said:  “Brian, if we vote for independence in September, I’ll be manning the barricades with Bill Kidd, because I will be a Scot in a country that has decided to vote for independence and I will be arguing for us to keep the pound – I will be arguing for us to be automatically in the European Union.”

The comments came as a backlash against Mr Osborne continued after he last week rejected the idea of a formal currency union with Scotland in the event of a Yes vote in the independence referendum.  Labour and the Liberal Democrats also indicated similar opposition to a currency union with Scotland.

However, shortly after Mr Osborne’s declaration, a poll showed that only 37 per cent of voters believed the Westminster parties would refuse to agree a currency union.  Strathclyde University’s professor of politics, John Curtice, said the Westminster move had “backfired in spectacular fashion”, while First Minister Alex Salmond branded Mr Osborne’s stance as “ill-thought-out and misinformed”.  The SNP dismissed the Chancellor’s comments as “bluff, bluster and bullying”.

In response to the latest development, Convener of the Scottish Parliament’s Finance Committee Kenneth Gibson MSP said that Mr Carlaw’s position showed that the Tories would not reject a currency union and showed up Mr Osborne’s “rhetoric”.

“Jackson Carlaw’s comments are a welcome confirmation that a currency union is the right option not just for an independent Scotland but also for the rest of the UK – a fact made clear by the Fiscal Commission Working Group’s comprehensive analysis,” he said. “The public backlash against George Osborne’s sermon on the pound is growing – and the Tories and No campaign know it.
 
“Mr Carlaw’s admission shows that the Tories will support a currency union after a Yes vote – and confirms that George Osborne’s recent bluster on the pound was just campaign rhetoric designed to try and threaten people in Scotland into voting No.”

He added: “After a Yes vote, the bluff and bluster will come to an end and the Scottish and UK Governments will negotiate a currency union in the mutual interest of both countries – and I look forward to Jackson Carlaw being on Scotland’s side when those negotiations take place.”

The issue of currency has dominated the independence debate with both sides standing firm.  Pro-Union parties have demanded a so-called Plan B from the Scottish Government in the event that Westminster does indeed refuse to accept a currency union.

However recent figures released by the Scottish Government indicate that businesses south of the border would be hit with an extra five hundred million pounds in transaction costs should the currency threat be enforced.  Both John Swinney and Alex Salmond have argued that no UK party will enter a general election pledging such a policy.

The Scottish Government has also argued that the Bank of England and the pound are assets that should be shared in the event of independence and that they would, in a spirit of good faith, agree to shoulder a share of the £1.4 trillion of UK debt in return.

Speaking in January last year, head of Better Together Alistair Darling agreed that a currency union would be in the interests of the rest of the UK and Scotland, calling such an agreement “logical” and “sensible”.