Further blow to No campaign after Treasury fails to provide any evidence of ‘currency block’ discussions

Sunday, 06 April 2014 14:47

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  By a Newsnet reporter
 
The UK Treasury has been accused of cooking up arguments against a post-Yes currency union after it was forced to admit it had no evidence of discussions having taken place between its own senior civil servant and Chancellor George Osborne
 
Reports in today’s Sunday Herald of a Freedom of Information request stating that there is no paper trail detailing how Treasury Permanent Secretary Sir Nick Macpherson arrived at the decision to rule out a currency union, have been seized on by the SNP.

According to the SNP, the revelations suggest that the Treasury position blocking a currency union between a newly independent Scotland and the rest of the UK, was decided externally.  Previous reports in the Guardian and Independent newspapers have stated that Better Together leader Alistair Darling came up with the ill-advised plans.

Commenting, SNP MSP Kenneth Gibson said:

“Westminster’s currency bluff has completely crumbled – and this FOI suggests that the Treasury position was engineered externally, as there is no paper trail within the Treasury of how or when it was arrived at.

“The FOI states there is no record of Sir Nick Macpherson setting out his advice to the Chancellor before 11 February – just two days before Osborne’s now infamous ‘Sermon on the Pound’. Given the lack of documentation around Sir Nick’s position, it is now impossible to claim that ruling out sharing the pound was ever anything more than an ill-advised campaign tactic cooked up by Alistair Darling, as has been reported.”

The latest revelations follows reports last week which listed quotes made by an un-named UK Government minister who told the Guardian that threats to block a currency agreement were a campaign bluff, and that the UK Government’s stance would alter in the event of a Yes vote.

Mr Gibson added: “Nothing the No campaign says on currency has a shred of credibility anymore – as the unnamed UK Government Minister admitted last week: ‘Of course there will be a currency union…everything would change in the negotiations if there were a Yes vote’. 

“The inescapable truth that the No campaign must face up to is that a currency union is every bit as much in the interests of the rest of the UK as it is for an independent Scotland.  Not sharing sterling would see businesses south of the border faced with an extra £500m in transaction costs.

“As leading economist Professor Anton Muscatelli pointed out earlier this week, rejection of a currency union would be an act of economic vandalism for the rest of the UK. International expert Professor Leslie Young, of Cheung Kong School of Business in Beijing, also described the UK Government’s opposition to a currency union as ‘entirely a false argument’ based on ‘weasel words’.

“Even Alistair Darling himself has said that a shared sterling area is ‘desirable’ and ‘logical’. It’s time for the No campaign to stop the foolish bluffing, put its money where its mouth is and back sharing the pound.”

On February 13th, George Osborne warned that a Westminster Government would not accept a currency union with an independent Scotland. 

Mr Osborne said he had based his objection on a memo written by the Treasury’s top civil servant, Sir Nicholas Macpherson.  The Permanent Secretary to the Treasury had written the memo only two days earlier.

However despite being asked by the Sunday Herald if Sir Nicholas had discussed the issue with Mr Osborne prior to the memo being written, the Treasury admitted no record existed.

“There is no record of the date when Sir Nicholas Macpherson, Permanent Secretary to the Treasury, first set out his advice to the Chancellor or other Treasury ministers regarding the currency union between an independent Scotland and the rest of the UK.”

It added: “To be helpful [we] can advise that the Permanent Secretary has for some time held the views expressed in his written advice of the 11 February.

“He recalls having expressed it verbally on several occasions prior to the formal written advice which was subsequently published.”

The issue of currency has remained at the centre of the independence debate since Mr Osborne issued his threat whilst on a visit to Edinburgh.  The Tory Chancellor was supported by his counterpart in the Labour party, Ed Balls, and Lib Dem MP Danny Alexander.

Today’s revelations are the latest to hit the pro-Union alliance after Sir Nicholas’s memo was savaged by a world renowned expert in economics.

In a withering analysis of Sir Nicholas Macpherson’s memo, Professor Leslie Young, of the Cheung Kong Graduate School of Business in Beijing, said the reasoning that underpinned Mr Osborne’s stance was based on a “lurid collage of fact, conjecture and fantasy”.

In a statement issued to the Sunday Herald, a Treasury spokesman dismissed the latest claims and said: “The Permanent Secretary and the Chancellor have a very close working relationship, as you would expect, and they talk about a range of issues all the time.

“This is just a distraction from the main issue, which is what currency would an independent Scotland use.

“That’s what the Scottish Government should be spending their time and energies on, not trying to rake up a decision that has already been made.”