Earlier this week, the Scottish Affairs Committee stated in a report that there is no doubt in the mind of MPs that there will not be a currency union between the UK and Scotland should the Scottish people vote for independence later this year. The Committee argued that a single currency could not work after the separation, stating that it would be against “the best interests” of both the UK and an independent Scotland.
If Scotland entered a currency union with the UK, it would have to hand over control of its monetary policy to ensure the sustainability of the economic union. With political separation and economic differences emerging from independence, such a policy would be counterproductive at best. Indeed, the Parliament website stated that a currency union would be “politically infeasible.”
As well as taking control of Scottish monetary policy, the UK would also have to take responsibility for Scottish banks and their systems - shouldering the risk of default and collapse should the Scottish financial sector falter. This move would impinge on the integrity and independence of the Scottish financial sector, meaning that although the nation in name would be independent, the financial sector would have to cling to the UK for dear life.
The Chairman of the Committee, Ian Davidson MP, stated that the “parrot is dead” and that there has been “complete clarity and openness” from the Chancellor, Shadow Chancellor and the Chief Secretary to the Treasury.
This clarity surely shows that the SNP and Alex Salmond have again put forward empty promises on the self-reliance and integrity of a separated Scotland. It appears that their ‘plans’ are merely ill thought-out fantasies, rather than concrete measures for how the nation’s economy will cope with separation from the UK. Consequently, independence would merely create an unstable and “uncertain economic and political environment”.
Surely then, in light of a weak economic policy, no long-term plan and the risk of an unstable Scotland, the SNP should either develop some clear policies and put these into the public domain or concede defeat. Otherwise, they risk leading Scotland into independence on the basis of dangerous fallacies.
By Tom Chidwick