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Independence (Currency)

Volume 543: debated on Wednesday 18 April 2012

6. What assessment his Department has made of the implications for the currency used in Scotland of a vote in favour of independence for Scotland. (102891)

We are confident that people in Scotland will continue to support the United Kingdom in any referendum. It is the Scottish Government who are proposing independence and they must answer for the implications of their proposals, including on currency matters.

Is it not the case that the weight of legal opinion suggests that an independent Scotland would become an European Union accession state and would therefore be obliged to join the euro?

The Scottish National party is changing its position on what currency it wishes to adopt and how it would go about this. There is no doubt that the SNP needs to answer some hard questions on this matter and resolve, for us all, what an independent Scotland would look like. I think that Scotland is better off in the UK.

The Secretary of State will be aware that a separate Scotland would have to create its own currency, join a weaker euro or make its biggest business partner its biggest business competitor, with the Bank of England setting its interest rates, its spending limits and its borrowing limits. Does this not show the incoherence of the SNP’s economic policies?

The hon. Gentleman is entirely right to point out that even in its best moments, when it tries to offer us some detail, the SNP does not resolve what a monetary union with the rest of the UK might look like, how it would deal with the fiscal rules and the regulatory environment or whether the Bank of England would be the lender of last resort. I think that Scotland deserves some answers on those points.

Does the Secretary of State acknowledge that if an independent Scotland were to use the pound sterling, that would require conditions that cannot be known now? Indeed, that is one of a growing number of issues that are unknown and unknowable, and it shows how uncertain Scotland’s future would be if it left the United Kingdom.

My right hon. Friend is entirely right that when given the opportunity, the SNP ducks giving the answers to all these hard questions, because it does not have those answers.