Chancellor George Osborne says he would not sign up to a currency union with an independent Scotland, saying such a deal would “not work” and was “not going to happen”.
The chancellor made a rare trip to the Scottish capital to give a speech on the financial implications of Scottish independence.
Alex Salmond’s Scottish government has proposed a “sterling zone” with the rest of the UK if there is a Yes vote in the referendum. But George Osborne poured cold water on the plans.
He said: “The SNP says that if Scotland becomes independent, there will be a currency union and Scotland will share the pound.
“People need to know that is not going to happen. Because sharing the pound is not in the interests of either the people of Scotland or the rest of the UK.”
The chancellor published the latest Treasury analysis on the impact of independence on Sterling, which concludes that a union would not work with an independent Scotland.
Mr Osborne said: “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 that 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 United Kingdom.”
He added: “I don’t think any other Chancellor of the Exchequer would come to a different view.”
Treasury letter from top mandarin says currency union won’t work because 1. in order to work needs to be seen as irreversible…
— Faisal Islam (@faisalislam) February 13, 2014
2. Macpherson: “scotlandâ??s banking sector far too big in re: national income..real risk UK wd end up bearing most risk which it creates”
— Faisal Islam (@faisalislam) February 13, 2014
Conclusion of nick Macpherson letter: pic.twitter.com/n4uyTM4xDf
— Faisal Islam (@faisalislam) February 13, 2014
“authorisation for Bank of Scotland, Clydesdale and RBS to issue sterling banknotes would also cease” pic.twitter.com/HfXewvEDuU
— Faisal Islam (@faisalislam) February 13, 2014