John Swinney sets record straight after claiming Scottish Government were involved in currency union talks with Bank of England, Daily Record

SNP finance secretary John Swinney yesterday made a climb-down six days after claiming the Scottish Government were already having technical talks over the use of the pound after independence.

He set the record straight in Holyrood by conceding he did not mean to make people believe discussions are under way.

Swinney told MSPs: “If by my choice of words last week I have given the impression that the Bank of England has been in negotiating a currency union, I can say to Parliament that was not my intention.”

Technical and factual discussions have taken place between government officials and the bank in the run up to the referendum - but not on the specifics of the SNP’s preferred deal, he admitted.

The bank had taken the highly unusual step of publicly rubbishing his original claim at the end of last week.

At the time, Swinney’s aides said they were baffled by the reaction.

Tory MSP Murdo Fraser - who raised the issue in Holyrood yesterday - said Swinney was at risk of losing his reputation as a “straight talker”.

Fraser said: “I cannot understand why it has taken six full days for the finance secretary to set the record straight on such a critical matter.

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Alex Salmond on the ropes: Bookies say he’s 4/1 to stand down as First Minister, Daily Express, updated

EMBATTLED Alex Salmond was ­fighting on two fronts last night to quell growing SNP rage over his disastrous TV debate and save his currency plans.

Questions were raised about the First Minister’s future after senior lieutenants started briefing against him following his defeat to Alistair Darling in the live showdown.

Last night, bookmakers William Hill offered odds of 4/1 that Mr Salmond would stand down before the next Holyrood elections in 2016.

The plotting came amid renewed splits in the Yes camp with nationalist figureheads Jim Sillars and Dennis Canavan demanding a Scottish currency.

However, their guns may well have been spiked as Mr Salmond sparked a fresh battle for an independent Scotland to retain sterling, declaring: “It’s our pound and we’re keeping it.”

The SNP leader give his clearest hint yet this could mean using the pound without a formal currency union with the rest of the UK – an option known as dollarisation or the Panama option. He also repeated his threat that a breakaway country would refuse to accept its share of the UK’s national debt unless a deal was made.

But there was more embarrassment for Mr Salmond when it emerged that his own blueprint for secession contained a serious error in dealing with the currency for a go-it-alone Scotland.

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Banks ‘could quit’ if dollarisation used post-Yes

Comment:

It is interesting that Mr Salmond keeps insisting that a break away Scotland will keep the Pound ,  this is known as dollarization or the Panama option,  (Panama uses the US Dollar as it’s currency) this would be known as de-facto or unofficial currency substitution,  The main UK parties have already said that there will be no sterling zone or currency union between England, Wales and Northern Ireland and a break away Scotland, despite this Mr Salmond insists that Scotland will keep the Pound and if he isn’t allowed to use the Pound,  an independent Scotland will not pay it’s fair share of the UK national debt,  a majority of international financial organisations including  France’s  Societe Generale  have stated  that any official or  unofficial currency union would affect Scotland greatly and if Scotland’s defaults on it’s international debts, Scotland would face  economic  hardship, Alex’s Salmond’s plans are economically incoherent, and Scotland with  the rest of the UK  forming a Sterling Zone isn’t an option. It’s interesting that using the Pound in an un-official currency union is known as the Panama option,  any student of Scottish History or British History will know  the results of what  happened the last time Scotland took a Panama option see The Darien Colony.