The UK Government is highly unlikely to agree to a currency union with an independent Scotland because it would not work, according to the Scottish Secretary.
First Minister Alex Salmond’s assertion that “the pound is as much Scotland’s as it is the rest of the UK’s” is not backed up by international law, Alistair Carmichael told an audience in Inverness in his first keynote speech since he replaced Michael Moore.
The Scottish Government’s forthcoming White Paper on independence must set out “a credible plan B” on currency because their current plan “wouldn’t work”, Mr Carmichael said.
The SNP “seem obsessed with UK-wide solutions” in their independence plans, including shared currency, welfare, defence procurement and financial regulation, he added.
But these solutions are merely “a wish list” that could only be secured through negotiation with other states pursuing their own national interests, he warned.
“The First Minister is fond of saying that the pound is as much Scotland’s as it is the rest of the UK’s,” he said. “It is now, but if Scotland decided to leave the UK we would also be leaving the UK currency.
“Public international law is clear: the UK would continue. The UK’s currency would continue and the laws and institutions that control it like the Bank of England would continue for the continuing UK.
“But if Scotland became an independent country, we would need to put in place our own currency arrangements; new currency arrangements.”
Mr Carmichael added: “It would be very foolish for anyone to vote for an independent Scotland on the basis that they will get to keep the pound.
“It’s high time that the Scottish Government stopped claiming that a currency union is a given and instead answer this first question: will the White Paper set out a credible Plan B on currency?”
Responding to Mr Carmichael’s comments, Annabelle Ewing MSP said: “Alistair Carmichael may be the new Scottish Secretary but – apart from contradicting his predecessor on assets and liabilities – he served up the same No campaign cauld kail.
“Every time people in the No campaign talk about currency they look silly, because it was Alistair Darling himself – the Chair of the No campaign – who said that a sterling area between an independent Scotland and the rest of the UK is ‘desirable’ and ‘logical’, which is indeed the case. If the No campaign leaders can’t keep their story straight, no wonder they are losing the plot.”