UK Government set to admit independent Scotland could use pound


   By Martin Kelly

The anti-independence campaign has suffered another significant blow today after media reports which claim that the Westminster Government will next month admit that an independent Scotland can use sterling.

According to reports, the Westminster Government has decided to back down from earlier claims that they could veto such a decision if Scotland voted yes in the 2014 referendum.

It is expected that London will insist that a sterling zone can only be created on the basis of an agreement on budget constraints between the two administrations.  Such fiscal safeguards have already been hinted at by First Minister Alex Salmond who has always maintained in interviews that Scottish debt levels would have to stay within acceptable limits.

Previously, anti-independence campaigners had insisted that Scotland could be blocked from using the pound and that the country would instead find itself forced to adopt the euro.

In a speech last year to business people in Glasgow, UK Chancellor George Osborne warned that a new RoUK government could block the sterling zone being proposed by the SNP.

Mr Osborne told his audience that it was not possible to have such a currency union without full political union: “The conundrum of the eurozone crisis is how difficult it is to combine currency union with full fiscal and political independence.

He added: “The members of the eurozone are now faced with what I’ve described as the ‘remorseless logic’ – the very lesson of the eurozone crisis – that you can’t have monetary union without greater fiscal and political integration.”

The claims that the remainder of the UK could prevent an independent Scotland from keeping the pound were also made by Better Together head, Labour MP Alistair Darling who said that England could veto such plans.

Speaking last month, Mr Darling said: “Once you start sharing things, you have to ask the other lot,”

Last summer, Mr Darling also suggested that England would not want a currency union: “…nobody is asking people in England, Wales and Northern Ireland what they think,”

“It’s entirely conceivable they may think let’s make it the Bank of England in fact as well as in name.”

However, in a BBC interview last month the Labour MP appeared to back-track on his earlier statement and said that, if Scots voted yes then a currency union would be in the interests of both Scotland and the rest of the UK.

He said: “Of course it would be desirable to have a currency union…” and described a sterling zone as “desirable” and “logical”.

The U-turn would be the second major blow to the anti-independence campaign in recent days.  News that it is being planned comes after the UK suffered a humiliating downgrade to its credit rating when Moody’s placed the UK on AA1, a drop from the coveted AAA.

The anti-independence campaign has used the UK’s AAA rating as one of the core arguments not to vote Yes in 2014 , which according to the SNP has now been shown to be misleading scaremongering.

SNP Treasury spokesperson Stewart Hosie MP said:

“The anti-independence campaign used the UK’s triple-A credit rating as one of their core reasons not to vote Yes in 2014 but this has been dealt a hammer blow.

“With the Moody’s downgrade this argument is in tatters and the No campaign has been left with a triple-ZZZ credibility rating.

Mr Hosie claimed the No campaign now lacked credibility and added:

“They have been peddling the triple-A myth for months now and it has been blown out of the water. Nobody can trust a word they say.

“Indeed, the record of our neighbours shows that small, well managed independent countries can have every expectation of enjoying the highest credit rating, and more importantly favourable bond yields.

“Almost two-thirds of the countries that now hold triple-A status have populations of less than ten million – including Finland, Sweden, Denmark, and Norway.

“Scotland is in better financial shape than the UK as a whole, and a Yes vote in 2014 will allow us to build a strong economy and fair society with the powers of an independent Scotland.”

It has also emerged that the pro-Union Better Together campaign have been distributing leaflets boasting that the UK’s triple A credit rating saves Scots billions in mortgage payments.

According to the leaflet: “Scots save billions on the cost of mortgages due to the UK’s AAA credit rating.”

The SNP has called for the Better Together campaign to withdraw the leaflets and said: “No campaigners used the UK’s AAA credit rating as one of their core arguments against independence.  Now that it has been shown up as misleading scaremongering, people will rightly ask if any of the other claims on their leaflets can be believed.”