Currency union plans are incoherent, claims Carmichael
The Scottish National Party’s plans for a “currency union” between an independent Scotland and the rest of the UK are increasingly complicated and unclear, isles MP Alistair Carmichael claims.
Speaking in the wake of a report released on Tuesday by HM Treasury which challenged the SNP case for a currency pact in the event of the electorate voting “yes” in next year’s referendum.
The treasury outlined how the proposed currency pact would constrain an independent Scotland’s tax and spending policies.
Highlighting the Eurozone, the report also explained that currency unions did not necessarily add any additional protections against funding problems.
Mr Carmichael said: “The SNP would have us believe that a currency pact is an easy option. In fact their plans look increasingly complicated and unclear.
“A currency union of the sort they propose would require a mass of arrangements and common agreements which would, as the report today makes clear, constrain Scotland’s fiscal freedom.
“Above all else, there is no guarantee that Scotland could even join the pound – that is a deal that would require negotiation between an independent Scotland and the remainder of the UK.
“The more that the case for independence is scrutinised, the faster it unravels. On a question as basic as the currency that an independent Scotland would have there are no coherent answers.
“An independent Scotland would have no influence over the Bank of England but would still effectively be under its control.”
In a speech in Glasgow about the proposed currency pact Chancellor George Osborne said the move would be a “dive into unchartered waters” and questioned whether the rest of the UK would want to “give away some of their sovereignty over monetay and potentially other economic policy”.
He added: “Let’s be clear – abandoning current arrangements would represent a very deep dive indeed into uncharted waters.
“Would a newly independent Scottish state be prepared to accept significant limits on its economic sovereignty? To submit its economic plans to Westminster before Holyrood?”
However, the Scottish government has dismissed the concerns and Scottish finance secretary John Swinney said a currency pact could easily work in Scotland’s – and the UK’s – interests.
He told the BBC <i>Today</i> programme: “What the Treasury’s paper is designed to do is to make things sound as difficult and obstructive as possible and I don’t really think it is a helpful contribution to the debate.”
If voters back independence Scotland would have four currency options: a currency union, join the euro, keep using sterling, or adopt a new currency.