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Scottish referendum: Carmichael speech on independence debate

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Scottish Secretary calls for Scottish Government to stop dodging key questions on independence.

Alistair Carmichael

Scottish Secretary Alistair Carmichael has said the Scottish Government must stop dodging questions on independence and set them three straight forward questions that need to be answered on currency, pensions and cost.

Mr Carmichael said the forthcoming independence white paper needs to answer the questions that can be answered now while also being straight with people that many important issues could only be negotiated after a vote.

The Scottish Secretary used his first constitutional speech since taking up the post to set out the benefits of being part of the UK. He also told the audience in Inverness that the independence debate was not about patriotism and that you are not a better Scot if you support independence or if you don’t.

The three questions Alistair Carmichael set for the Scottish Government are:

  1. A currency union with the rest of the UK is highly unlikely to be agreed so what is the Plan B on currency?
  2. How much more will pensions cost each of us in the future if we leave the UK and leave behind 90 per cent of the people that are currently paying into the larger UK pension pot?
  3. What will the overall price tag of independence be? How much will it cost to set up a new Scottish state from scratch?

In his speech, Mr Carmichael said:

The Scottish Government have another duty in the White Paper: to explain how independence would work and what it would mean. This is an important decision for us all. The details matters. We cannot be offered a prospectus of ‘it will be alright on the night’.

Now we know that for many issues all the White Paper can do is provide a wish-list of what the Scottish Government might like to secure in negotiations.

An independent Scotland would need to sit down at the negotiating table with the rest of the UK – who would then be a separate state from us. Sit down with the member states of the EU and the Allies of NATO to thrash out an enormous amount of very important detail.

In each case an independent Scottish state would be pursuing its interests, just as the other states would pursue their interests. So the Scottish Government should take the opportunity in the White Paper to tell it straight about the fact that many important issues will need to be negotiated and they need to be upfront that there can be no guarantees in advance.

But that does not excuse the First Minister and his team for dodging some fundamental independence questions that they can answer. Today I am posing three very straight-forward questions that need to be answered if people in Scotland are going to get any closer to knowing how independence will work and what it might mean for them.

Pound

Let’s start with the Pound in our pocket. Or, to be precise, the UK pound sterling in our pocket. This is fundamental. The First Minister is fond of saying that the Pound is as much Scotland’s as it is the rest of the UK’s. It is now, but if Scotland decided to leave the UK, we would also be leaving the UK currency.

Public international law is clear: the UK would continue. The UK’s currency would continue and the laws and institutions that control it like the Bank of England would continue…for the continuing UK But if Scotland became an independent country, we would need to put in place our own currency arrangements; new currency arrangements.

The First Minister says he wants a currency union with the rest of the UK. The UK Government – and plenty of others – have pointed to the challenges of currency unions between different states. You only need to look at the Euro area to see that everything can appear fine in year one, and how quickly circumstances can change. And there are plenty of examples of currency unions that have failed. When Czechoslovakia broke up the Czechs and Slovaks tried it. It lasted 33 days.

The bottom line is that a currency union may not be in the interests of Scotland or the continuing UK and it is highly unlikely to be agreed – not because of any malevolence, but because it wouldn’t work. It would be very foolish for anyone to vote for an independent Scotland on the basis that they will get to keep the pound. It’s high time that the Scottish Government stopped claiming that a currency union is a given and instead answer this first question: will the White Paper set out a credible Plan B on currency?

Pensions

Pensions are another fundamental building block of any state. The UK and other developed countries are facing rising pension costs because of ageing populations. Independent forecasts by the ONS confirm that the demographic challenge Scotland faces is greater than the rest of the UK. We will have more elderly and retired individuals receiving pensions compared to those of working age who are paying taxes.

So my second question is will the White Paper set out how much more pensions will cost each of us in the future if we leave the UK and leave behind 90 per cent of the people that are currently paying into the larger UK pension pot?

Price tag

Finally, the overall price tag of independence is something we never hear anything about. John Swinney’s private paper to his Cabinet colleagues said a new tax system alone would cost more than £600m each year. Setting up a new Scottish state from scratch will not be cheap. The White Paper must tell us how much it will cost us to set up.

But in truth it’s not just the one off set up costs we need to think about. In public we see the Scottish Government promising more and more ‘goodies’ for an independent Scotland. But people aren’t daft: we know that every goodie has to be paid for.

So I want to know how much we are expected to pay to go it alone as an independent state. Rather than making empty promises, the White Paper has to tell us how an independent Scotland would fill the black hole. Ok – I’ll admit – that’s more than three questions – trust me I could ask plenty more.

Published 13 November 2013