Bad news for No campaign as currency bluff exposed

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Saturday, 29 March 2014 09:38

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  By Martin Kelly
 
A UK Government Minister described by a leading newspaper as being ‘at the heart of the No campaign’ has admitted that there will be a currency union between an independent Scotland and the rest of the UK.
 
According to the Guardian, the minister told the paper: “Of course there would be a currency union”, before adding: “Saying no to a currency union is obviously a vital part of the no campaign. But everything would change in the negotiations if there were a Yes vote.”

The news has been seized on by the SNP with Deputy First Minister Nicola Sturgeon a “boost to the Yes campaign” and evidence that of a growing crisis which is engulfing the No campaign.

Writing in the Guardian, the paper’s chief political correspondent Nicholas Watt says:

“The private admission comes amid increasing jitters at Westminster, after opinion polls showed an increase in support for independence despite the Conservatives, Labour and Liberal Democrats all arguing that Scotland could not keep the pound after a yes vote.”

Mr Watt claimed the minister would play “a central role in the negotiations”, should Scots vote Yes in the independence referendum.

The unnamed minister is said to have told the journalist; “There would be a highly complex set of negotiations after a yes vote, with many moving pieces. The UK wants to keep Trident nuclear weapons at Faslane and the Scottish government wants a currency union – you can see the outlines of a deal.”

Speaking on Good Morning Scotland on Saturday, the journalist told presenter Isabel Fraser that following lengthy negotiations there would be a currency union but that Westminster would try to use the leverage of currency in order to delay the removal of Trident from the Clyde.

“…for example, the United Kingdom wants to keep its nuclear bases in Faslane for some time way into the future, that would be a significant demand by the UK Government.” he said.

The reports come at the end of a week which has seen Yes gaining further momentum in opinion polls – leading to crisis talks between senior figures in the No camp and splits developing as senior figures including former Lib Dem leader Tavish Scott voice discontent about the scaremongering and negativity of the No campaign.

On Friday Scottish Lib Dem leader Willie Rennie told the BBC that a Yes vote in September’s referendum was a “distinct possibility”.  Mr Rennie’s predecessor Tavish Scott is also reported to have criticised the leader of the No campaign, saying Alistair Darling lacks appeal to most of the electorate.

The Labour MP himself has courted criticism after making confused statements over a currency union.  In 2013 the former Chancellor said a currency union between an independent Scotland and the rest of the UK would be in the interests of both sides, describing it as “logical”, he later tried to deny making the statement.

The new comments from the unnamed UK Minister follow a series of polls showing support for Yes increasing.  A recent Panelbase poll commissioned by Newsnet Scotland put the gap between Yes and No at just five points.  A poll-of-polls has shown that the gap between Yes and No has halved since November last year.

Commenting on the new developments, Deputy First Minister Nicola Sturgeon said:

“This was supposed to be the No campaign’s trump card, but as the polls show it has backfired badly – the gap between Yes and No has halved since November, and most Scots simply do not believe the bluff and bluster we had from George Osborne, Ed Balls and Danny Alexander.

“Now that the card has been withdrawn, it gives an even bigger boost to the Yes campaign. And it can only add to the sense of crisis which is engulfing the No campaign.

“The reality is that a currency union is every bit as much in the interests of the rest of the UK as an independent Scotland, and that is why Westminster will agree to one. Scotland is the rest of the UK’s second biggest trading partner, and not sharing sterling would cost businesses south of the border an extra £500 million in transaction costs.”

Last week a world renowned economist savaged the UK Government’s threats over currency, describing them as illogical and based on a “lurid collage of fact, conjecture and fantasy”.

Professor Leslie Young, of Cheung Kong School of Business in Beijing, said of advice given to UK Chancellor George Osborne by senior Treasury official Sir Nicholas Macpherson:

“There may be good reasons for the UK to reject a currency union with an independent Scotland, but none can be found in the Treasury letter. Yet, that letter is the key justification for the stance of the UK Government.”

Ms Sturgeon added: “Only a few days ago, international expert Professor Leslie Young, of Cheung Kong School of Business in Beijing, described the UK Government’s opposition to a currency union as ‘entirely a false argument’ based on ‘weasel words’ – following his detailed analysis which picks apart the UK Government’s arguments ‘paragraph by paragraph’.

“The leader of the No campaign, Alistair Darling, said that a shared sterling area between an independent Scotland and the rest of the UK is ‘desirable’ and ‘logical’ – and now the UK Government appears to have u-turned and actually agrees with that sensible position.”

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