UK Ministers want answers on independence currency, The Scotsman

TWO UK CABINET Ministers have today challenged the SNP Government to provide answers on currency after Alex Salmond’s top adviser said that his post-independence plans may be blocked.

The SNP Government wants to share the pound in a currency union with the rest of the UK but this has been ruled out by the Coalition Government and Labour opposition. Crawford Beveridge, who heads up Mr Salmond’s fiscal commission working group, admitted in a keynote speech last night that “politics” could see the plans blocked and suggested using the pound without UK agreement - so called sterlingisation - could work as an alternative.

With only a week to go until postal voting starts in the referendum both Chief Secretary Danny Alexander and Scottish Secretary Alistair Carmichael are now pressing the SNP Government to set out its currency ‘Plan B’.

Mr Alexander said the Scottish Government is ‘fast running out of time’ to come up with a Plan B on currency.

Liberal Democrats at Holyrood have this morning called for an urgent ministerial statement from Alex Salmond on the currency after Mr Beveridge suggested the SNP’s threat to walk away from Scotland’s share of UK debt after a Yes vote “looks like a default and it smells like a default” to credit ratings agencies.

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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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Why is everything going wrong for the Scottish Yes campaign?, The New Statesman

With little over a month to go until the referendum, the No campaign is buoyant. Alex Salmond’s unexpectedly weak performance against Alistair Darling in the first televised debate has convinced unionists they are winning the argument as well as the vote. The polls are consolidating in favour of the Union. The currency issue is eating away at the SNP’s economic credibility. The Yes activists I speak to are uncharacteristically downbeat as they begin to accept, some of them for the first time in 24 months, that they might actually lose.

Amidst the gloom, nationalists are telling themselves comforting stories. One is that polling companies haven’t picked-up what’s happening "on the ground"; that the network of Yes groups in poor neighbourhoods will deliver a burst of working class enthusiasm strong enough to propel independence over the line on referendum day. Another is that the SNP has been in this situation before – three years ago, as the last Holyrood election approached – and will turn things around now as it did then.

We won’t find out how credible the first story is until the vote itself, but the second one just doesn’t stack-up. "The difference between 2011 and 2014", one senior Better Together figure told me recently, "is that in 2011 [Scottish Labour] knew the fundamentals, like leadership and the economy, weren’t on its side. This time we know they are." This is surely right. At the end of June, 49 per cent of Scots said independence would make them worse off, compared to just 27 per cent who said it would make them better off. It would be difficult for any party to win an election battling against these sorts of numbers, let alone a referendum on something as far-reaching as national sovereignty.

So where did it all go wrong for the Yes campaign, which only a few weeks ago was fizzing with confidence? The left claims Yes Scotland and the SNP have spent too much time trying to persuade voters that independence will be achieved seamlessly, with little or no disruption to Scotland’s economy or its institutions, when it should have been emphasising Scotland’s bleak prospects as part of an austerity-bound UK. Had the SNP made September 18 a referendum on the current state of Britain, rather than the future state of Scotland, Yes support would be higher than it is now, they argue.

It’s a legitimate point. The weakest feature of the SNP’s independence prospectus – its plan for a post-UK sterlingzone – is also the centrepiece of the party’s "continuity strategy" – the various triangulating gestures the SNP leadership has made over recent years to reassure undecided voters that radical constitutional change needn’t entail radical political change. But the public knows, intuitively, that this isn’t true. You can’t sell a grand political vision like self-determination with a series of (supposedly) pragmatic compromises. Why bother with all the upheaval – and, for some, the trauma – of creating a new state if it’s going to look just like the old one?

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A glorious, flag-waving defence of our kingdom’s union: Whisper it - Britain would be nothing without Scotland... and Scotland will be nothing if conceited Salmond’s in charge Daily Mail

Imagine yourself at a very smart dinner party and the conversation gets round to the issue of Scottish independence. Suppose people whose intelligence and thoughtfulness you’ve long respected, such as Sir David Attenborough and historians Simon Schama and Professor Mary Beard, said they thought that it was in the best interests of Scotland to remain within the United Kingdom rather than going it alone in the world.

Then people who were at the top of their professions, such as the former chiefs of the Defence Staff, Marshal of the Air Force ‘Jock’ Stirrup, Lord Stirrup, and Field Marshal Charles Guthrie, Lord Guthrie of Craigiebank, agreed with them, as did the former head of the Royal Navy, Admiral Sir Alan West.

At the other end of the table, some of the brainiest people in Europe, including Stephen Hawking and the former Astronomer Royal, Martin Rees, Baron Rees of Ludlow, wholeheartedly agree.

Wouldn’t you listen very carefully to what they have to say? Especially if historians of the calibre of Margaret MacMillan and Tom Holland, intellectuals of the experience of Melvyn Bragg and Joan Bakewell, actors of the quality of Sir Patrick Stewart and Dame Judi Dench also weighed in, saying exactly the same thing?

Wouldn’t these views be at least worth considering very profoundly? Not if you’re someone of the vanity and self-regard – or perhaps by now the sheer desperation – of Alex Salmond.

The Yes campaign has sneered at the opinions of some of the most profound thinkers and intellectuals of our day who have just written a joint letter opposing Scottish independence, simply because they were joined on the page by a number of TV celebrities, comedians and social gadflies who were asked to join the 200-strong list.

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Further Reading

Beyond the Scottish Independence Question, Looking at a Greater Devolution in The United Kingdom, A Perspective

Alex Salmond threatens to default on share of debts

"Economists warned that a debt default would wreck the country’s reputation for fiscal responsibility."

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.