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Scottish independence: Danny Alexander insists currency union refusal 'is final' Scottish independence: Danny Alexander insists currency union refusal 'is final'
(35 minutes later)
The cross-party decision to rule out a monetary union if Scotland becomes independent is final, the chief secretary to the Treasury is to say. The cross-party decision to rule out a monetary union if Scotland became independent is final, the chief secretary to the Treasury will say.
In a speech later, Danny Alexander will insist the UK government is not going to change its mind on the issue.In a speech later, Danny Alexander will insist the UK government is not going to change its mind on the issue.
Scottish ministers believe appearing to rule out a currency union is a campaign tactic by the unionist parties. Scottish ministers have dismissed the ruling out of a currency union by the main Westminster parties as a bluff.
Scottish Finance Secretary John Swinney said the Bank of England had made clear how a shared currency could work. Scottish Finance Secretary John Swinney said UK ministers were arguing to take responsibility for all UK debt.
Mr Alexander will repeat his views on a sterling zone in a speech to representatives of the pensions industry. Mr Alexander, along with UK Chancellor George Osborne and Labour shadow chancellor Ed Balls have said they could not support a formal currency union between Scotland and the rest of the UK, in the event of a "Yes" vote in the 18 September referendum.
Speaking on BBC Radio Scotland's Good Morning Scotland programme, Mr Alexander also rejected the idea that an independent Scotland could continue to use the pound without a formal currency union. The chief secretary to the Treasury will use a speech to representatives of the pensions industry to again call on the Scottish government to come up with a currency Plan B, insisting his position is not a campaign tactic.
'British foundations''British foundations'
He said: "The people I'm speaking to today, the financial services industry of Scotland, would be decimated if we went down that sort of sterlingisation route, as it is called. Ahead of his speech to the National Association of Pension Funds, Mr Alexander told the BBC's Good Morning Scotland programme: "The people I'm speaking to today, the financial services industry of Scotland, would be decimated if we went down that sort of sterlingisation route, as it is called.
"Without a central bank, without a lender of last resort, there would be no-one to stand behind the hugely important businesses that are built up in Scotland over hundreds of years."Without a central bank, without a lender of last resort, there would be no-one to stand behind the hugely important businesses that are built up in Scotland over hundreds of years.
"This is a Scottish success story built on British foundations.""This is a Scottish success story built on British foundations."
On the same programme, Mr Swinney insisted the Bank of England had made clear a shared currency after independence was possible. On the same programme, Mr Swinney said there "would have to be a negotiation" over a currency union under independence, but argued the Bank of England had set out that such an arrangement was possible.
He said: "We should look at the dispassionate analysis put together by the governor of the Bank of England, who came to Edinburgh several weeks ago and set out the arrangements by which a currency zone could operate between an independent Scotland and the rest of the United Kingdom. Asked what would happen if the Scottish government "lost" such a negotiation, he added: "If the UK government sustains its current line of argument, the line of argument pursued by George Osborne, then what would happen is the UK would be assuming all of the responsibility for the debt of the UK.
"What heartened me enormously by the way in which Mr Carney went about that exercise was he set out very clear arrangements that would need to be put in place and all of these arrangements had been foreseen." "An independent Scotland wouldn't be saddled with the proportionate share of debt that we have freely accepted that we would have to take on.
A formal monetary union between an independent Scotland and the rest of the UK was ruled out by Chancellor George Osborne, Mr Alexander and Labour Shadow Chancellor Ed Balls last month. "The UK government would be walking in to assuming all of the debt, and that is another compelling reason why the circumstances that I've set out, of the rest of the UK agreeing to a currency union zone with an independent Scotland, is a strong and credible proposition."
But on Wednesday, MSPs on Holyrood's Economy Committee were told by the leader of the Scottish government's fiscal commission working group, Crawford Beveridge, that Mr Osborne was not being serious. Alternative option
The working group recommended a formal monetary union as the best option for an independent Scotland when it reported its findings to the Scottish government last year. Asked which alternative currency option an independent Scotland would pursue, he said: "The point I'm making about debt is that it is so unlikely that George Osborne is going to voluntarily absolve the people of Scotland of over £100bn worth of debt, that George Osborne - or whoever is the chancellor after the 2015 election - will be agreeing to a currency zone with an independent Scotland."
Plan B Mr Alexander's speech will come as Scottish First Minister Alex Salmond chairs the latest meeting of his council of economic advisers.
It met again on Thursday to re-affirm its backing for the option, and set out plans to provide further analysis to demonstrate that, while other options are viable for Scotland, "there are clear advantages for the rest of the UK from the proposed Sterling area". The Scottish Liberal Democrat MP is expected to tell his audience: "I've seen some people suggest we are not serious about refusing a currency union.
The commission also said the UK Treasury had "overstated" the risks of a formal currency union.
However, in his speech in Edinburgh later, Mr Alexander is expected to dismiss suggestions the rejection of a formal sharing of the pound was a politically-motivated and tactical move.
He will use his speech at the National Association of Pension Funds to reiterate calls for the Scottish government to "deal with the consequences" of the rejection of a monetary union, and publish a currency Plan B.
His speech will come as Scotland's First Minister Alex Salmond chairs the latest meeting of his council of economic advisers.
Mr Alexander is expected to tell his audience: "I've seen some people suggest we are not serious about refusing a currency union.
"Let's call this the John McEnroe defence. Except in this instance it's not just one person they're shouting at, but three."Let's call this the John McEnroe defence. Except in this instance it's not just one person they're shouting at, but three.
"And our decision - taken in the best interests of Scotland and the rest of the UK - is final."And our decision - taken in the best interests of Scotland and the rest of the UK - is final.
"No ifs, no buts. No matter how much of a racket they make, it isn't going to change.""No ifs, no buts. No matter how much of a racket they make, it isn't going to change."
'Important year''Important year'
Meanwhile, investment and savings business Alliance Trust has become the the latest company to outline its contingency planning for Scottish independence.Meanwhile, investment and savings business Alliance Trust has become the the latest company to outline its contingency planning for Scottish independence.
It announced it is to set up additional companies in England as a result of uncertainty surrounding the independence referendum. It announced the setting up of additional companies in England as a result of uncertainty surrounding the independence referendum.
The 125-year-old Dundee-based business said it was taking the precaution in order to protect its customers regardless of the outcome in September.The 125-year-old Dundee-based business said it was taking the precaution in order to protect its customers regardless of the outcome in September.
The trust currently has offices in Dundee, Edinburgh and London.
In a statement outlining the company's annual results, chief executive Katherine Garrett-Cox said: "2014 is an important year for Scotland.
"The referendum in September is creating uncertainty for our customers and our business, which we have a responsibility to address.
"Regardless of the outcome it is critical that we are able to provide continuity of service and protection for their investments and savings."