Doubts raised about Scottish post-separation currency

There’s a peculiar, contradictory symmetry to the arguments about politically reshaping the United Kingdom, both about Scottish independence and the UK’s relationship with Europe. With, on key issues, the same people, unionist on Scotland and Eurosceptic, asserting simultaneously diametrically opposed positions in each debate. But then, this is politics, and we are perhaps unreasonable to expect consistency.

Central to both arguments for independence are hotly disputed questions about what attitude the deserted state/entity will take to the deserter about things the latter might wish to maintain in the relationship once apart, the terms of divorce and alimony. In the Scottish case, the currency and EU membership. In the UK/EU case, unfettered continued access to the single market.

When the great charmer and political street fighter, First Minister Alex Salmond took on Britain’s mildest, to the point of utter dullness, ex-Labour chancellor Alistair Darling on Tuesday in the first TV leaders’ debate on Scotland’s referendum, the expected rout of the latter did not materialise. Darling unsettled his opponent, commentators seemed to agree, most effectively by repeatedly injecting doubt into the debate about Scotland’s post-separation currency.

Salmond argues that, whatever London may say now to the contrary, Scotland will be able to preserve its link with sterling and, once the smoke of political battle has passed, negotiate a role for itself within the Bank of England in the currency’s management. He quoted a Tory minister who appeared recently to suggest London’s firm No is a negotiating ploy.

‘Plan B’ Not so, insist all the unionist parties and Darling, currency union is out of the question technically and politically as, like a petulant small boy, they threaten to march off the playing field with their ball should the Scottish people’s decision go the wrong way.

“What’s your Plan B if you don’t get currency union, this is a most important question,” Darling asked repeatedly. There is no Plan B, of course. For Salmond to admit that there is one, would be tantamount to making it instantly Plan A. And uncertainty and fear are the key elements of the unionist armoury.

The truth is that currency union may be a complex project, would be of mutual benefit to traders on both sides of a new border, may require lengthy negotiation, may require a Bank of England input into Scottish fiscal policy that some would see as undermining “pure” independence. But – remember we were in a union with sterling for 50 years – impossible it is not, given goodwill on London’s part.

It is a goodwill that unionists of all shades insist will not be forthcoming – a strange posture for those also arguing with such passion that the basis of the union that should be maintained is a warm, unbreakable relationship between two peoples, infused above all with a mutual goodwill.

Break the bond, they seem to be saying, and it’s all gone. Forget solidarity, working together on mutually interesting projects, forget the ties that bind. Break the bond, and it’s obstruction all the way. Almost vindictive, and just like the divorce courts. But it’s a strange way to encourage the maintenance of a voluntary union.

And yet it is bewildering how the same people can also insist that when it comes to parting company with the EU, the same logic does not apply.

Take Boris Johnson, lord mayor of London and PM in waiting. Johnson has been positioning himself as one of his party’s leading Eurosceptics and this week suggested that Britain, if it failed to renegotiate its position in the union, could see a “glorious future” outside it, “as an outward-looking trading economy that has great trading relations with Europe”.

The presumption, shared by many Eurosceptics, is that Britain can leave the EU and all its “onerous” obligations, while preserving, apparently at no cost, access to the single market. Why EU member states should willingly accept new unfettered competition from businesses operating under laxer social and environmental rules is unclear. Goodwill? Of course they wouldn’t.

Here the presumption of goodwill on the part of the normally-maligned EU partners is unstated , but it is a crucial if bizarre assumption for the Eurosceptics. To concede that Britain outside the EU would have to negotiate its way back into the markets, and in doing so pay a cash price as well as a commitment to enforce product regulations set in Brussels (and in whose formulation the UK no longer played a part) would be fatally to undermine the Johnson free lunch thesis.

In business “goodwill” has a specific meaning – it can be bought and sold with a company. In politics, not.

psmyth@irishtimes.com

@PatrickSmyth1