News Column

Salmond economic experts in fresh talks over currency

February 18, 2014

Magnus Gardham; Michael Settle; Magnus Gardham and Michael Settle

ALEX SALMOND'S economic experts are to meet again to discuss currency plans for an independent Scotland after the First Minister again defended his under-fire proposal to share the pound.

The group, which is chaired by Scottish-American technology expert Crawford Beveridge and includes Nobel prize-winners Joseph Stiglitz and Sir James Mirrlees, had recommended a formal monetary union between an independent Scotland and the rest of the UK.

The Fiscal Commission Working Group said yesterday it would "continue to offer ongoing analysis" on currency options if there is a Yes vote. It stressed in a statement it had produced a number of "perfectly viable" currency models in a report last year.

Details of the upcoming meeting, expected to take place in the next few weeks, emerged after First Minister Alex Salmond gave his most detailed defence of his proposed pound-sharing deal.

His comments came after Chancellor George Osborne last week announced that independence would result in Scotland leaving sterling.

The SNP leader told supporters in Aberdeen yesterday that English businesses would not allow a UK government to turn its back on a currency union because they would face an extra pound(s)500 million in transaction costs.

He said: "This charge - let's call it the George Tax - would be impossible to sell to English business, to be charged by their own Chancellor for the privilege of exporting goods to Scotland."

Responding, the Prime Minister said: "The point is that Alex Salmond is now a man without a plan. He told us that he wanted to have a currency union and that now looks under threat. He told us that he wanted Scotland as part of the European Union. That is under threat.

"He is making, I think, quite an empty and rather angry speech, but he hasn't got a plan and I think people will see that he hasn't got a plan."

Better Together campaign leader Alistair Darling repeated calls for Mr Salmond to come up with a plan B.

As the dispute over currency instensifies, ex-Labour Prime Minister Gordon Brown is to launch a campaign to keep pensions "British" today.

The MP will claim in Fife that independence would put state pensions at risk.

In their statement yesterday, issued through the Scottish Government, Mr Salmond's economic advisers said a currency union remained "the best option for Scotland and indeed the rest of the UK".

They also suggested that "political considerations" were clouding Mr Osborne's view.

Scottish Government sources insisted the working group had not been reconvened to consider a Plan B but confirmed a meeting was due.

The group, which also considered an independent Scotland setting up a new currency, unilaterally keeping the pound or joining the euro, is to continue providing advice to the SNP administration.

In his speech to members of the Business for Scotland campaign, Mr Salmond claimed that Mr Osborne had downplayed the advantages of a currency union.

Mr Darling accused him of complaining about "a problem of his own making."

Meanwhile, CBI director John Cridland described the proposed

currency union as "unstable". He said: "Scotland needs a stable currency, within a secure single market, so that Scottish companies have the best chance to grow and create jobs. Staying in an unstable currency union would have serious economic consequences."

However, the SNP's currency plan received guarded support from the cross-party Yes Scotland campaign. The campaign's advisory board said the proposal was a "starting point for an independent Scotland" and agreed the SNP had a mandate to put its proposals to voters in the referendum.

After a board meeting it issued a statement that added: "The board notes the significant positive impact on Yes support following Chancellor George Osborne's claim that he would try to block a currency union."

The Yes advisory board is chaired by former Labour MP and Independent MSP Dennis Canavan, Scottish Greens leader Patrick Harvie and Scottish Socialist Party leader Colin Fox, all of whom have voiced support for an independent Scotland to establish a new currency.

Yes Scotland board member Pat Kane said Scotland may have to look at its currency options again in a couple of years if a currency union is achieved after independence.

He said: "I think a sterling zone is a good idea for the first couple of years of how Scotland and England will go forward."


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Source: Herald, The (Scotland)


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