Taking a pounding

Taking a pounding What the experts say on the SNP’s plan for a Eurozone-style currency union

January 2014

Scotland faces a momentous decision on the 18th September. If we vote for independence there is no going back - whatever the cost.

We all want to be certain we are making the right decision for our country and for the generations that follow us. But with just a few months to go until the referendum, there are still huge uncertainties about what would happen if Scotland were to vote to leave the United Kingdom.

The single biggest unanswered question is what currency we would use if we vote to go it alone. As Alex Salmond’s own former economic advisor, Professor John Kay, has said:

“The choice of currency would be the most important economic decision for an independent Scotland. All aspects of economic policy, including fiscal and monetary arrangements, are contingent on that choice.”

In contrast to the risk of independence, as part of the UK we have the certainty of the UK pound, one of the most secure, trusted currencies in the world. In these economically uncertain times, Scotland benefits from the absolute reassurance that comes from the financial back-up of being part of the UK. Independence would be a huge risk for Scotland and would mean taking an irresponsible gamble on the pound; mortgage and interest rates; jobs and pensions. The last few years have been tough enough. The last thing we need is years more uncertainty as we set up an unproven currency or join the euro.

Losing the pound would mean: • Higher cost of living with higher mortgage repayments, higher credit card

and store card bills and more costly car loans because Scotland would start out as a separate state with no credit rating.

• Fewer jobs due to the cost of changing money every time Scottish firms buy or sell from our biggest customer – the rest of the United Kingdom.

• Deeper cuts or higher taxes as the Scottish Government pays more to borrow money meaning more debt and lower public spending.

• Risks to benefits and pensions as payments are converted into a different currency.

• Risks to our economy. Without the back-up of the rest of the UK Scottish banks would have gone under and families and businesses would have lost everything.

A few years ago Alex Salmond was telling us that the euro was best for Scotland, now he wants a Eurozone-style currency union. With independence there would be no continuity option, despite what the nationalists assert. If an independent Scotland were to continue to use the pound it would require the creation of a complex Eurozone-style arrangement that does not currently exist. Leading experts have made clear that reaching an agreement on such arrangement is unlikely. The nationalists’ proposal for a Eurozone-style currency arrangement cannot be guaranteed as it would require agreement from the continuing United Kingdom. Alex Salmond has suggested that he would default on Scotland’s share of the UK debt if a deal could not be struck. However, what this threat would mean for Scotland is that we would be outside our biggest and most important trading union (the UK) and we would have signaled to international markets that we cannot be trusted to pay our debts.

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Introduction

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What currency an independent Scotland would use is too important and too fundamental an issue to rely on Alex Salmond’s wishful thinking. There is now an overwhelming consensus that a Eurozone-style currency union is a risky, inferior and unlikely option for Scotland. Any fair-minded person would conclude that the idea is a non-starter. It’s time Alex Salmond told us what the plan B is if a Eurozone-style currency union can’t be agreed.

We know that people want the facts about independence, so in part one of this paper we set out what 50 leading experts (independent of both the Better Together and Yes Scotland campaigns) say about the Alex Salmond’s currency plans. In part two we outline what the UK politicians who would be involved in making the decision think. And finally, in part three we explore the chaos and confusion that exists over the Yes campaign’s position on currency.

Part 1: What the experts say p.4-17Part 2: What the decision-makers say p.18Part 3: Yes campaign currency chaos p.19

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Professor John Kay Former economic adviser to Alex Salmond & Professor of Economics at the London School of Economics

1 “If I represented the Scottish government in the extensive negotiations required by the creation of an independent state, I would try to secure a monetary union with England, and expect to fail … So Scotland might be driven towards the option of an independent Scottish currency.”

“Alex Salmond has said I think rather stupidly that there is no plan B. The trouble with having no plan B is you don’t have any negotiating power if you don’t have a Plan B. So there has to be a Plan B. And Plan B has to be an independent currency.”

Dr Angus Armstrong Director of Macroeconomic Research at National Institute of Economic and Social Research and ESRC Scotland fellow

2 “If citizens on either side of the border have no guarantee that the sterling union will continue to be the preferred option in future, then the arrangement is fragile because of this possibility of future changes of heart. Suggesting that the currency union may not be permanent leaves the system exposed. We have argued that the higher the level of debt an independent Scotland inherits the more vulnerable the currency union would be. To unconditionally commit to a currency union in perpetuity requires political union. Indeed the euro has survived precisely because there is a high degree of political commitment. Scottish independence is a political move in the opposite direction.”

David Marsh Former Europe editor for the Financial Times & Chair of the Official Monetary and Financial Institutions Forum

3 “Salmond has chosen to ignore the prime lesson of economic and monetary union (EMU) – that you need political union to make monetary union work … Salmond says the Bank of England and sterling are ‘as much Scotland’s assets as London’s assets.’ He doesn’t seem to have thought that this could change in the event that Scotland withdraws from the British union. The rest of Britain’s government and people, drawing the appropriate conclusions from the EMU debacle, would be likely to refuse to endorse a currency union with a country over which they had no political control.”

“The glaring absence in the white paper of a ‘Plan B’ for the probable rejection of the ‘monetary-union-without-political-union’ plan has been advanced as one reason why the document is unlikely to change the present Scottish opinion poll majority in favour of maintaining the link with England.”

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Part 1: What the experts say

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Ronald MacDonaldAdam Smith Chair of Political Economy at the University of Glasgow

4 “An alternative to plan A, a continued sterling monetary union post-independence, is urgently needed since as I and others have pointed out it suffers from huge problems. The sterling zone would be untenable from day one of independence, or more likely a long time before independence, because financial markets are forward looking.”

“So with no well thought through plan B in place the outcome of a Yes vote would produce a very uncertain time for the Scottish economy, with likely massive disruption to employment and output which would be generational in its impact. Without a plan B, then, on the currency issue the Scottish public are effectively being duped about the potential massive costs and disruption to the Scottish economy.”

Brian Quinn Former Executive Director of the Bank of England & Honorary Professor of Economics and Finance at the University of Glasgow

6 “The concept of a shared system of supervision and crisis management is seriously – perhaps fundamentally – flawed and that its weaknesses would increase during the indeterminate period of transition following independence. This, together with the uncertainties regarding Scotland’s continued use of sterling arising from its proposed membership of the EU, are likely to result in higher prudential requirements for Scottish financial institutions. In these circumstances it would not be surprising if they reconsidered their group structures and main domicile.”

Owen Kelly Of Scottish Financial Enterprise

7 “The Scottish Government assert that there would be a currency union with the rest of the UK but we don’t at this stage know what view the rest of the UK would take of that … If one takes out of the equation the politically motivated views on both sides one is left with the impartial commentators, and they are pretty unanimous that a currency union is not the most likely outcome.”

Sir John GieveFormer Deputy Governor of the Bank of England

5“If a new Scotland wanted to have a formal currency union, it would need to agree the terms with the remaining UK government. I would expect that government to drive a pretty hard bargain. For example, it would want to constrain how much the Scottish Government borrowed.”

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Jo Armstrong Centre for Public Policy for Regions & Honorary Professor Public Policy, University of Glasgow

8“[Being] fixed to a currency over which [Scotland] has no control doesn’t make a lot of economic sense. Politically I can see why you wouldn’t want to create uncertainty in the minds of individuals about what currency we’re going to be using. I think it’s much much less in England’s interest … I think the balance of payments, benefits for England have been much overblown.”

Fitch One of the big three global ratings agencies which determines countries credit rating

9 “The monetary arrangement following Scottish independence could become a source of uncertainty even if Scotland remained in the sterling currency zone. As the intensification of the Eurozone crisis showed in 2012, a monetary union without fiscal and banking union is unstable and the prospect of an exit from a monetary union could lead to high volatility and market turbulence, potentially detrimental to all members.”

Martin Wolf Chief Economics Commentator at the Financial Times

10 “Remaining within the sterling area for an unknown period, as the Scottish National party suggests, cannot be a unilateral decision. The residual UK, whose central bank would continue to be the Bank of England, would need to oversee Scotland’s fiscal management. Otherwise, the people of the residual UK would be writing blank cheques. Since that would be unacceptable, Scotland would enjoy neither monetary nor fiscal independence.”

DeAnne Julius Former member of the Bank of England Monetary Policy Committee & sat on the Court of the Bank of England

11“Scotland’s bargaining power as the smaller actor would be correspondingly limited. Both the Conservative and Labour parties oppose Scottish independence so the UK Parliament of the day is unlikely to offer any favours. In particular, to gain lender of last resort coverage, Scotland would have to meet stricter budgetary and debt constraints than it does today, negating the assumed benefits of independence.”

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Iain McMillan Director of CBI Scotland

12 “One thing we can be clear about is that if Scotland secedes from the union, the Government of what is left of the United Kingdom will look after the interests of that part of the UK—and rightly so. Clearly, from our point of view, we would like Scotland to participate as a member of the Monetary Policy Committee. However, it is very difficult to see how the Government of a foreign country—that is what England, Wales and Northern Ireland will become—will have any interest in being a lender of last resort to a bank based in Edinburgh.”

Professor Gavin McCrone Former chief economic adviser to the Scottish Office

13 “I think the pro-independence side have got a lot of questions to answer actually about the currency, about the European Union and so on and about the financial sector. I mean I think the financial sector would have to be restructured I think if we were to become an independent country and that would be quite a headache.”

“There would be very little freedom; you couldn’t obviously have a separate monetary policy if you are in a currency union because you have the same currency.”

Andrew Campbell Professor of International Banking and Finance Law at the University of Leeds

14 “The only long-term currency option for the newly independent nation as a Member State of the EU will be to commit to adopting the euro and this will form part of the entry negotiations. The idea that a newly independent Scotland would be in a position to negotiate an opt-out is simply not tenable.

If Scotland does have to commit to eventually adopting the euro there is arguably even less of an incentive for the rest of the UK to enter into a formal agreement with regard to sterling. A formal agreement in any event seems very unlikely because outside of Scotland there is no support for it whatsoever and considerable opposition from those who have shown any interest.”

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Charles Nolan Professor of Economics at the University of Glasgow

15 “It takes two to strike a deal and it now seems that a deal over a sterling zone will be difficult to achieve. It seems likely that, in the event of a vote for independence, at a minimum the continuing UK would want powers to intervene if necessary in the fiscal policy of Scotland in order to protect sterling. There is therefore real uncertainty about what a vote for independence would mean. Uncertainty over questions of currency can be highly destabilising; they can lead to reduced investment and capital flight.”

John Nugee Former Chief Manager of Reserves Management at the Bank of England

16“The London government would be duty-bound to consider what is in the best interest of the remaining UK; it is not obviously the case that this automatically coincides with the optimal solution for an independent Scotland and not clear what an Edinburgh administration which wished to use rUK’s currency could offer London as negotiating points in any ensuing dialogue.”

Professor Simon Wren-Lewis Oxford University

17“On fiscal matters the negotiating position of an independent Scotland is weak, and as a result arrangements if they keep sterling will be tough. I would not be surprised if we ended up with a new Scottish currency if Scotland votes for independence. I suspect the SNP know this, but want to avoid admitting it before the vote.”

Ryan Bourne Centre for Policy Studies

18“I believe the process would be extremely disruptive for both Scotland and the UK, due to the unanswered questions surrounding monetary policy and the division of the UK’s existing national debt. I also believe a “no” vote could be good economically for the UK, as it is very likely we’ll end up with more tax and spending powers devolved to the Scottish government.”

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Professor Peter McGregor Head of Economics at the University of Strathclyde

19“There is considerable uncertainty over the economic impact of such radical constitutional change… retention of the pound is something that would have to be negotiated with the rest of the UK … Even if successfully negotiated, a ‘one size fits all’ monetary policy would prevail.”

David Owen Jefferies

20 “Threatening to walk away from their obligations in the event that the Bank of England would not provide lender of last resort for their banks inside a monetary union with the rest of the UK is not credible. That would amount to a default which would severely limit their options, substantially raise their funding costs and plunge Scotland into deep recession. As it is Scotland is likely to see an ongoing loss of business as it migrates south of the border … On economic grounds [separation] does not make sense.”

Ruth Porter Policy Exchange

21“It is difficult to see how an independent Scotland bound by the Bank of England would work. Not only would the end of the Union damage the valuable economic and social integration across the nations involved with untold consequences, but the raft of economically incoherent policies being proposed by Alex Salmond would be disastrous for Scotland specifically.”

Andrew Goudie Former Chief Economic Adviser to the Scottish Government and now an adviser to the principal at the University of Strathclyde

22 “What is probable is that any UK government is likely to seek an agreement that sets limitations on the fiscal aggregates – and the associated fiscal deficit and debt financing – to protect its macro-economic policy and safeguard it from adverse market reactions.”

“It is not difficult to envisage a UK government seeking an agreement in which wider economic and financial conditionality is determined. It would, therefore, seem highly probable that the UK would seek an agreement that incorporated significant safeguards for the UK economy.”

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Keith Wade Schroders

23“If we get a yes there would be massive wrangling over fiscal arrangements in order to avoid a rerun of the euro crisis within the new GBP zone. When combined with the considerable uncertainty over whether Scotland can remain in the EU, Scottish business would start to head south.”

The Scottish Council for Development and Industry

24 “A rUK Government may seek in negotiations on the currency to limit its flexibility over spending and borrowing, while the Bank of England may set an interest rate for the rUK and not for an independent Scotland.”

“All of the currency options for an independent Scotland would involve, to a greater or lesser extent, explicit or implicit constraints on decision-making over fiscal policy. The Eurozone crisis has underlined the systemic risks of a monetary union in which some members have less disciplined fiscal policies than other members.”

Jim Cuthbert & Margaret Cuthbert Economists and statisticians

25

“It is certainly the case that the constraints involved in such an arrangement are currently unknowable, so that the economic policy options open to a Scottish government in a UK currency union are largely a matter of guesswork.”

Neville Hill Credit Suisse

26 “If Scotland was to vote “yes” the issue may not be whether Scotland keeps the pound but whether the pound keeps Scotland. One lesson of the euro area crisis is that if markets sniff a risk of currency redenomination in a currency union, cross border capital flows can verge on the economically catastrophic until or unless the authorities state they’ll do “whatever it takes” to ensure that redenomination doesn’t happen. The capital flows wouldn’t be as dramatic as they were in Spain or Italy – but the flow of direct and portfolio investment, as well as some bank deposits, south of the border would provide Scotland with a nasty negative monetary shock.”

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Brian Ashcroft Emeritus Professor in Economics, Fraser of Allander Institute, University of Strathclyde

27 “Scotland would not be equal to rUK. There would be no Scottish central bank. There would be a common nominal interest rate across the sterling union. The BOE would act as “lender of last resort” to all banks in the monetary union, including Scottish banks, but would do so at ‘penal’ or above market rates… the Bank of England and the rUK government would require the Scottish government to observe an agreed set of fiscal rules which would likely cover limits on the scale of borrowing, the size of the primary budget deficit in relation to Scottish GDP and the level of Scottish government debt to GDP. The demands from the rUK government could be quite restrictive.”

Erik Nielsen UniCredit

28“A yes-vote would cause massive uncertainty as the parties would begin to flesh out how to divide assets and liabilities as well as income streams. Scotland would also face the additional uncertainty of being (at least temporarily) outside the EU, and using a currency with (apparently) no influence on monetary policy. I am somewhat surprised that the market seems to brush aside the risk of a yes-vote.”

Professor Robert Hazell UCL’s Constitution Unit

29“Some of the most important questions – membership of the EU, of NATO, keeping the pound, sharing other services with the UK – are not within the gift of the Scottish government, but depend on others. We will not know until the negotiations are concluded whether the Scottish government can deliver all it hopes.”

Rod MacLeod Banking & Finance Partner at Tods Murray

30 “An independent Scotland would most likely be the junior partner in any currency union with the rest of the UK, and therefore would be subject to fiscal oversight from the rest of the UK. So they would look at things like public spending, public borrowing, deficit, taxes. In any currency union, given the respective sizes of an independent Scotland’s economy and the rest of the UK, it’s inevitable that there would be more control on the UK side as opposed to an independent Scotland.”

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Richard Holt Economist at Capital Economics

31 “The Scottish government has said that, if it was not allowed to use the pound, then it would not pay any of its share of gilt funding. From the perspective of the markets that would mean that Scotland would be launching its own currency while walking away from its (implicit) share of debts. Now, it is true that countries around the world have got themselves out of worse messes. Even so, that would hardly be a bright start to independence.”

Bruce Beveridge President of the Law Society of Scotland

32 “Given the different positions being taken by the UK and Scottish governments, it is difficult to understand the most likely currency arrangements if the Scottish people were to vote for independence next year. It is hard to have a proper debate against a background of uncertainty on such an important issue as this. The Scottish government should be setting out its contingency plans if its preference on currency cannot be achieved.”

Professor Andrew Oswald University of Warwick

33“Independence would likely make Scotland… a bit poorer, because of the need to switch currency and the lack of funding from the southeast of the UK. As money usually wins in people’s minds, it seems like that the independence vote will be turned down.”

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The politically neutral House of Commons Library

35 “By entering a sterling zone, Scotland would forfeit the ability to set its own interest rate. Given the relative size of the two economies, interest rates would be likely to reflect economic conditions in the rest of the UK more than conditions in Scotland. Under these circumstances, a shared monetary policy would become less appropriate for Scotland.”

“Countries which share a currency generally have to accept some constraints on their economic policies as a condition of belonging to the currency union. These constraints often put limits on the budget deficit and government debt.”

Dhaval Joshi Chief Strategist of BCA Research’s European Investment Strategy

36“It would be deeply ironic if the United Kingdom established fiscal independence with monetary union just as the euro area concludes that such a set-up is unworkable. There would be minimal short-term economic impact, but the long-term viability of such a structure would be as suspect as it has been in the euro area.”

Peter Westaway Chief Economist, Europe, Vanguard

37 “A yes vote for independence for Scotland would likely damage the Scottish economy. With ongoing uncertainty about the role of Scotland in Europe, private investment would likely fall, positive fiscal transfers from England would dry up and the status of who runs Scottish monetary policy would undermine monetary stability. The rest of the UK would likely be harmed at the margin too (despite the potential fiscal benefits). My hope is that these potential ramifications are well aired before the vote takes place.”


Bridget Rosewell Senior Partner at Volterra

34“[Independence] will create alarm, uncertainty and confusion which will remain until it is clear what currency and what debt Scotland will use. Then they will probably join the rest of continental Europe in the slow slide to the lowest common denominator.”

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Paul Johnson Director of the Institute for Fiscal Studies

38 “There is an interesting issue here about what a Scotland with sterling would look like, given the very large role that oil plays. You would clearly have a situation in which you have got the same currency as the rest of the UK where external shocks to oil prices are going to have very different effects on Scotland and the rest of the UK, and there might be some risks in that.”

Melanie Baker Morgan Stanley

39“One of the most significant initial impacts seems likely to be increased uncertainty for businesses and markets, partly given that the issues of how the debt will be divided up and what the currency arrangements will be seem far from being settled.”

Professor Mike Wickens University of York

40“[Independence] would give Scotland an even more unsuitable monetary policy than at present as monetary policy would be set for UK which would have a higher rate of inflation than at present due to the removal of lower Scottish inflation from the present UK average figure. It may also result in higher migration to UK.”

Howard Archer Chief European & UK Economist, IHS Global Insight

41 “A yes vote would cause serious uncertainty, especially given many economic aspects of independence remain unclear such as the role of the Bank of England and how exactly the public finances of Scotland and the rest of the UK will be affected.”

“Uncertainty may cause some delaying of companies‘ investment/business decisions while they waited for greater clarity on how exactly they Scottish economy will look after independence and what policies the Scottish government will really be able to follow given the state of their public finances.”

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Professor Stephane Garelli Former managing director of the World Economic Forum & Director of the World Competitiveness Centre

42 “You have to go into the euro. There is no choice. I tell you why . . . because if you look worldwide today 67 per cent of the foreign currency reserves are in dollars, 24 per cent are in euro and all the rest is marginal. So even the pound is marginal. So for me, if you really want to do something, whether you stay with the pound or if you really want to be independent, you go into the euro. Maybe, politically, people will start to scream on that and say it is too much of a change, but economically it makes a lot of sense.”

Peter Warburton Economic Perspectives

43“Much depends on the currency issue. Alex Salmond should give up on the currency union plan and launch an independent Scottish currency.”

Philip Shaw Investec

44“With an economy so dependent on oil, [Scotland] will have to live with the fact that overall it will be on a slow growth path, given that official projections of oil and gas output are flat over the medium-term. Also would Scotland be allowed into a monetary union with the UK? Would this leave the UK acting as the lender of last resort to Scotland in the eventuality of an economic accident?”

The Institute of Chartered Accountants in England and Wales

45 “If Scotland kept sterling, the rest of the UK would be likely to require robust fiscal rules on risk exposure from the beginning of any new constitutional arrangements. Given current experience of the problems in the Eurozone and its impact on the UK, it seems likely that an independent Scotland would be extremely vulnerable to economic problems in the UK, given that the rest of the UK is currently and will probably continue to be its largest trading partner, whereas the rest of the UK is likely to be less vulnerable if economic problems were confined to Scotland – especially if Scotland adopted a different currency.”

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Peter Dixon Commerzbank

46“A fiscally independent Scotland will – at least initially – be dependent on monetary policy set in London suggesting no guarantee of monetary and fiscal co-ordination.”

James Knightley ING

47 “I am a bit of a pessimist on this as no one knows what they are signing up to. Depending on the agreement struck between Scotland and the rest of the UK, which could take years to agree in any case, there may be the argument for another referendum on whether this is what the population actually wants. I think the uncertainty will be damaging for everyone.”

Dr David Comerford University of Stirling

48 “The asymmetry between Scotland and rUK causes real problems for any proposed sterling Union. With asymmetrical parties, not only are the benefits from the OCA unevenly split and weighted towards the smaller party, the moral hazard costs are split and weighted towards the larger party … If the rUK were to undertake [a cost benefit analysis], they are likely to reject the policy. This seems to be consistent with the campaign positions that we see.”

Iain McLean Professor of Politics at the University of Oxford

49 “If sterling continues to be used in Scotland, the Bank of England could only be required to take into account Scotland’s economic conditions in setting monetary policy if this were made a condition of the independence treaty in the post-referendum bargaining. I cannot see that Scotland would have any lever over the RUK to force it to make this a condition, therefore I assume that it will not be.”

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Mark Allan Former Bank of England Analyst & UK Economist at AXA Investment Managers

50“An independent Scotland almost certainly means a new currency. Continuing using sterling would involve the surrender of fiscal sovereignty, rendering independence almost redundant given the Scottish Parliament already has control of domestic policy.”

It’s clear: the only way to guarantee we keep the UK pound is to stay in the UK.

As the experts conclude, it is very unlikely that an agreement could be reached on a Eurozone style currency union on terms that both sides could accept. If an agreement could be reached, a separate Scotland would have severe limits placed on economic decisions and would have no control over the interest rates which affect our jobs and mortgages.

In the future any agreement would be vulnerable to changing political circumstances creating renewed uncertainty. Previous experience tells us that such agreements can collapse with a similar Czech-Slovak monetary union breaking down just thirty-three days after the ‘Velvet Divorce’ in 1993.

People in Scotland have a choice: trust Alex Salmond who is willing to say anything and do anything to get independence or trust the experts.

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Ed Balls Labour Shadow Chancellor

“The promise that Scotland would continue to share a currency with the remainder of the UK simply isn’t one the nationalists can make. Sharing something requires both partners to agree. A monetary system isn’t an asset to be divided up between the two countries like a record collection after a break-up… And it would require a very difficult and uncertain negotiation, with no guarantee in advance that an acceptable agreement could be reached for both the parties.

Alex Salmond cannot answer these questions, because they are not for him to determine. But here is one guarantee I can make. Whatever currency option Scotland ends up with after an independence vote, it will be less advantageous than what we have across the UK today.”

Danny Alexander Liberal Democrat Chief Secretary to the Treasury

“It is highly unlikely that a currency union could be made to work. And it is therefore highly unlikely that a currency union would be agreed.”

It’s not just the experts that say that an independent Scotland using the pound as part of a Eurozone-style currency union is unlikely. All three candidates for Chancellor – who could conceivable be involved in making the decision when negotiations would take place after the 2015 UK Parliament election – have all made clear that agreeing a Eurozone-style currency union is unlikely.

George Osborne Conservative Chancellor of the Exchequer

“Let’s be clear – abandoning current arrangements would represent a very deep dive indeed into uncharted waters. Would a newly independent Scottish state be prepared to accept significant limits on its economic sovereignty? To submit its economic plans to Westminster before Holyrood?”

“Let’s stop speculating and look at the evidence. Would the rest of the UK family agree to take that risk? Could a situation where an independent Scotland and the rest of the UK share the pound and the Bank of England be made to work? Frankly, it’s unlikely because there is real doubt about the answers to these questions.”

Part 2: What the decision-makers say

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Dennis Canavan, Yes Scotland chairman

“My preferred option is for Scotland to have its own currency because I think that would give us more flexibility, more freedom. It would give us a wider range of economic levers.”

Patrick Harvie, Yes Scotland board member

“To be clear, my preference would be that the scenarios would still include at least the possibility over the long term that a separate currency could be put in place … I would personally prefer to see any period of continued use of sterling as a transition period leading to something separate.”

Pat Kane, Yes Scotland board member

“Sterling zone might be solid first step for independence but it is in no way final.”

The campaign to break up the UK can’t even agree among themselves on something as fundamental as what currency we would use after separation.

Half the Yes campaign’s board and a majority (2/3) of the parties that make up Yes Scotland have refused to back the SNP Government’s proposal to agree a Eurozone-style currency union.

Part 3: Yes campaign currency chaos

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Colin Fox, Yes Scotland board member

“So, on balance, after weighing up all the issues involved and recognising that many other small Independent countries such as Norway, Switzerland and Iceland prefer to use their own currency - this option seems to make most sense.”

The divisions within the campaign to leave the UK makes it clear that separation would lead to a deeply uncertain future.

The only way to guarantee we keep the UK pound is to vote to stay in the UK.

Published and promoted by Blair McDougall on behalf of Better Together both at 5 Blythswood Square, Glasgow, G2 4AD. Better Together 2012 is a company limited by guarantee & registered in Scotland (SC425421).

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