Today the Treasury has published further analysis of the Scottish government’s proposed currency union in the event of Scotland voting for separation.
This analysis is crystal clear - a currency union would create unacceptable risks both for Scotland and the rest of the United Kingdom.
For Scotland separation would already be the riskiest and most uncertain step our country has ever taken. To take that step and then give up control over interest rates, exchange rates, and freedom over tax and spending policy would leave an independent Scotland hugely exposed to economic shocks but without any of the economic levers to manage a response.
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.
The Scottish government continue to pretend that an independent Scotland could continue to share the pound. It couldn’t, without agreement. And because a currency union wouldn’t work for anyone, it simply isn’t going to happen. The Scottish government now need to work out what their alternative currency proposal is and set it out openly.
This isn’t bluff, or bullying, it’s a statement of fact. The Scottish government’s claims that an independent Scotland could or should be able to share the pound are pure fiction. When we vote in September, no one in Scotland should vote for independence in the belief that we could keep the pound.
A strong, stable, growing Scottish economy is best served by keeping the United Kingdom together. That is the only way for Scotland to keep the pound.