Salmond currency expert: UK may not share pound Magnus Gardham Political Editor Wednesday 20 August 2014 THE expert behind Alex Salmonds currency plan has admitted the UK might not agree to share the pound in a formal monetary union with an independent Scotland. Crawford Beveridge, the chairman of the expert panel which drew up currency options for an independent Scotland, said the proposed currency union remained the best option. But he told an audience in Glasgow that the argument over the currency had become political rather than economic and the UK might not behave rationally in negotiations following a Yes vote. He said: There are several viable options out there just in case the politics trumps the economics when we get to a Yes vote. He admitted it was entirely possible the UK Government would reject a currency union after senior Tory, Lib Dem and Labour politicians made statements ruling out the proposal. He said: Its always possible but there are viable options. Im not worried about the currency. Every country has one and well have one. He said he regretted the intrusion of politics into the economic debate and had been shocked by Labour leader Ed Milibands vow to rule out a currency union in his partys next election manifesto if Scots vote Yes next month. Mr Beveridge, a former head of Scottish Enterprise, chaired Mr Salmonds hand-picked panel of experts, the Fiscal Commission Working Group, which set out a range of currency options for an independent Scotland last year. In a lecture at Glasgow Caledonian University last night he reiterated his support for sharing the pound in a formal currency union, arguing it was in the best interests of an independent Scotland and the rest of the UK, and insisting the plan met the criteria laid down by Bank of England Governor Mark Carney earlier this year. However, his acknowledgement that the UK might reject the proposal will embarrass Mr Salmond, who has refused to consider the possibility. The First Minister has resisted days of pressure to spell out his preferred Plan B, though he has stressed an independent Scotland could keep the pound without a formal pact, a process known as sterlingisation, in which case the new state would not take on its share of the UKs £1.4 trillion national debt. Mr Beveridge repeated the Fiscal Commissions original conclusion that sterlingisation - which would leave the country without a central bank - would be suitable only as a transitional currency arrangement. He said a temporary arrangement could last anything from six months to 50 years while an independent Scottish Government prepared a permanent solution. On Mr Salmonds threat to walk away from Scotlands share of the UK debts, he said the move would have to be managed very carefully as it could damage the countrys credit rating, pushing up interest rates, if rating agencies regarded it as a default. He said: I find it morally difficult. Id much rather take on a share of the debt which we are all part of but it depends on how intransigent the negotiators were. In last nights lecture, he repeated the Fiscal Commissions conclusion that an independent Scotland would not be in a position to join the euro and that creating a new currency, while viable, offered fewer benefits than sharing the pound which would have huge benefits for trade. The issue of an independent Scotlands possible currency has dominated the referendum debate since Mr Salmond was challenged repeatedly to set out his Plan B during a live TV debate with No campaign leader Alistair Darling a fortnight ago. Pro-UK politicians have argued a currency union would be too risky for the rest of the UK or place unacceptable constraints on an independent Scotlands policy-making. At a Better Together briefing last week, Glasgow University economist Professor Ronald MacDonald argued a currency union would collapse in a year. Labours Shadow Foreign Secretary Douglas Alexander MP said last night: This was supposed to be the start of Alex Salmonds fight back on Plan B. Instead his chief currency advisor has publicly accepted that a currency union is not in the gift of Alex Salmond. * John Menzies says it hopes that Scotland does not vote for independence as Scottish companies will have more opportunities if Britain is not split up. Paula Bell, the Edinburgh-based companys finance director, said: We dont actually think Scotland should be independent. Well be so glad to get back to normal when its all over and hopefully the voters will vote for no independence.
Posted on: Wed, 20 Aug 2014 05:47:09 +0000
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