This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.theguardian.com/politics/2014/feb/13/no-currency-union-indpendent-scotland-george-osborne
The article has changed 7 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| No currency union with independent Scotland, George Osborne confirms | No currency union with independent Scotland, George Osborne confirms |
| (about 2 hours later) | |
| George Osborne has officially vetoed proposals for a currency union with an independent Scotland, in an attempt to deal a hammer blow to Alex Salmond's independence campaign. | George Osborne has officially vetoed proposals for a currency union with an independent Scotland, in an attempt to deal a hammer blow to Alex Salmond's independence campaign. |
| The chancellor told an audience in Edinburgh that a currency union between Scotland and the rest of the UK would be unworkable and cause great damage to both the UK and Scottish economies. | The chancellor told an audience in Edinburgh that a currency union between Scotland and the rest of the UK would be unworkable and cause great damage to both the UK and Scottish economies. |
| "People need to know it's not going to happen," Osborne said. "Because sharing the pound is not in the interests of either the people of Scotland or the rest of the UK. The people of the rest of the UK wouldn't accept it and [the Westminster] parliament wouldn't pass it." | |
| The chancellor said senior Treasury civil servants, including the permanent secretary, Sir Nicholas Macpherson, had officially advised the UK government not to agree to such a pact with an independent Scotland because of the economic challenges. | The chancellor said senior Treasury civil servants, including the permanent secretary, Sir Nicholas Macpherson, had officially advised the UK government not to agree to such a pact with an independent Scotland because of the economic challenges. |
| "The official advice I have received from civil servants in the Treasury is that they would not recommend a currency union to the government of the continuing UK. | "The official advice I have received from civil servants in the Treasury is that they would not recommend a currency union to the government of the continuing UK. |
| "Listening to that advice, looking at the analysis myself, it is clear to me: I could not as chancellor recommend that we could share the pound with an independent Scotland. | "Listening to that advice, looking at the analysis myself, it is clear to me: I could not as chancellor recommend that we could share the pound with an independent Scotland. |
| "The evidence shows it wouldn't work. It would cost jobs and cost money. It wouldn't provide economic security for Scotland or for the rest of the UK. | "The evidence shows it wouldn't work. It would cost jobs and cost money. It wouldn't provide economic security for Scotland or for the rest of the UK. |
| "I don't think any other chancellor of the exchequer would come to a different view." | "I don't think any other chancellor of the exchequer would come to a different view." |
| It would require UK taxpayers to promise to bail out Scottish banks; it would require the Scottish government to accept substantial controls over its spending and economic policy and would lead to significant doubts on whether Scotland would continue with a sterling pact into the future, Osborne said. | It would require UK taxpayers to promise to bail out Scottish banks; it would require the Scottish government to accept substantial controls over its spending and economic policy and would lead to significant doubts on whether Scotland would continue with a sterling pact into the future, Osborne said. |
| International currency markets would attack the pound because a currency pact would be clearly weak. It would be unsustainable, the chancellor added. | International currency markets would attack the pound because a currency pact would be clearly weak. It would be unsustainable, the chancellor added. |
| "Just look at what happened to the last two nations who tried to form a currency union following separation – Slovakia and the Czech Republic. Their union fell apart after only 33 days as capital flowed from one to the other in pursuit of the safe haven. | "Just look at what happened to the last two nations who tried to form a currency union following separation – Slovakia and the Czech Republic. Their union fell apart after only 33 days as capital flowed from one to the other in pursuit of the safe haven. |
| We would face the same risk if Scotland tried to keep the pound. | We would face the same risk if Scotland tried to keep the pound. |
| "Signing up for arrangements that are inherently unstable would risk over time breeding huge resentment on both sides of the border. We want to bring people closer together, not drive them further apart." | "Signing up for arrangements that are inherently unstable would risk over time breeding huge resentment on both sides of the border. We want to bring people closer together, not drive them further apart." |
| The formal advice from Sir Nicholas Macpherson, the Treasury's chief civil servant, told Osborne he would "advise strongly against a currency union as currently advocated, if Scotland were to vote for independence". | |
| "Currency unions between sovereign states are fraught with difficulty. They require extraordinary commitment, and a genuine desire to see closer union between the peoples involved," said Macpherson's letter. | |
| "As the Treasury paper points out, the great thing about the sterling union between Scotland, Wales, Northern Ireland and England is that it has all the necessary ingredients: political union, economic integration and consent. | |
| "What worries me about the Scottish government's putative currency union is that it would take place against the background of a weakening union between the two countries, running counter to the direction of travel in the eurozone." | |
| Osborne said his decision to publish this private, formal advice from a permanent secretary was extremely unusual – evidence of his determination to drive home the significance of the issue. | |
| Danny Alexander, the Liberal Democrat chief secretary to the Treasury, was the first of the other two pro-UK parties to confirm that he and the Lib Dems would not endorse a formal currency union with an independent Scotland. | |
| In a statement issued by the Treasury, Alexander rejected allegations from the Scottish government that the UK parties were "bullying" Scots by vetoing a sterling pact. | |
| He said: "All of the currency options for an independent Scotland are riskier than the current arrangements, but a currency union carries particular risks, especially when the Scottish government says it might only be a temporary arrangement, leaving it at huge risks from market speculation. | |
| "A currency union would leave the rest of the UK highly exposed to fiscal and financial risks from a separate Scotland. | |
| "As a Scot and as chief secretary to the UK Treasury, on the basis of this analysis, I couldn't recommend a currency union to the people of Scotland and my party couldn't agree to such a proposition for the rest of the UK." | |
| Osborne's stance is also expected to be formally backed on Thursday by Ed Balls, the shadow chancellor, as part of a united front by the UK parties to thwart Salmond's plans. |