‘No currency union’ with independent Scotland - Osborne

Coalition moves to dismiss comments from anonymous minister reported by Guardian

UK chancellor of the exchequer George Osborne (centre) has today insisted there will be no currency union with Scotland if it votes in favour of independence. Photograph:  Lynne Cameron/PA Wire.

UK chancellor of the exchequer George Osborne (centre) has today insisted there will be no currency union with Scotland if it votes in favour of independence. Photograph: Lynne Cameron/PA Wire.

Sat, Mar 29, 2014, 10:40

UK chancellor George Osborne has dismissed the idea of a currency union with an independent Scotland.

The comments came as the government moved to distance itself from damaging comments made by an anonymous minister suggesting that the pound would be shared in the event of a Yes vote.

In a joint statement with Liberal Democrat treasury chief secretary Danny Alexander, Mr Osborne insisted independence would mean “walking out of the UK pound”.

An identical statement was also issued by No 10 as the coalition government sought to limit the impact of the unnamed minister’s comments on the politically sensitive issue.

The minister told The Guardian that “of course” there would be a decision to share the pound, indicating that a deal could be done with Scotland in exchange for the UK’s nuclear submarine fleet remaining at Faslane.

All three main parties at Westminster have officially ruled out sharing sterling with an independent Scotland and made it a key plank of the No campaign, but the minister told newspaper:

“There would be a highly complex set of negotiations after a Yes vote with many moving pieces. The UK wants to keep Trident nuclear weapons at Faslane and the Scottish government wants a currency union — you can see the outlines of a deal.”

But Mr Osborne and Mr Alexander insisted: “There will not be a currency union in the event of independence. The only way to keep the UK pound is to stay in the UK. Walking out of the UK means walking out of the UK pound.

“A currency union will not work because it would not be in Scotland’s interests and would not be in the UK’s interests,” he said. “Scotland would have no control over mortgage rates, and would be binding its hands on tax and funding for vital public services.”

“The Scottish Government are proposing to divorce the rest of the UK but want to keep the joint bank account and credit card. The UK would not put its taxpayers at risk of bailing out a foreign country and its banks. Parliament wouldn’t pass it, and the people wouldn’t accept it. Any suggestion to the contrary is wrong.”

Scottish secretary Alistair Carmichael said: “An anonymous, off the record quote does not change the stark reality on the currency.”

The minister’s comments were seized on by deputy first minister Nicola Sturgeon, who said they gave a big boost to the Yes campaign.

She said: “This was supposed to be the No campaign’s trump card, but as the polls show it has backfired badly — the gap between Yes and No has halved since November, and most Scots simply do not believe the bluff and bluster we had from George Osborne, Ed Balls and Danny Alexander.”

The Scottish Government’s White Paper on independence, published last November, says a shared currency is in the ”economic interests” of Scotland and the rest of the UK.

Almost half of voters north of the border think that Mr Osborne’s pledge to rule out a formal currency union with an independent Scotland is a bluff, according to a poll published this week.

PA