Scottish independence: FM backs sterlingisation

KEEPING the pound without the backing of the Bank of England is a viable “transitional option” for an independent Scotland, First Minister Alex Salmond has said.

By The Newsroom Monday, 18th August 2014, 3:50 pm

Alex Salmond has backed the sterilingisation of the pound on a transitional basis after independence. Picture: Jane Barlow

Mr Salmond is now under pressure from Better Together to reveal what currency he would use after the transitional period.

The Scottish Government insist Scotland will keep the pound in a formal currency union with the remainder of the UK, but all UK parties have ruled this out.

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The SNP has come under sustained pressure to reveal what its “Plan B” on currency would be.

The Scottish Government’s Fiscal Commission has proposed a range of alternatives, including a new independent currency, joining the euro and the informal use the pound using a process called “sterlingisation”.

Speaking on BBC Radio Scotland’s Good Morning Scotland, Mr Salmond said: “The Fiscal Commission said there were a number of viable alternatives, including as a transitional point exactly that (sterlingisation).

“But the best option for Scotland is keeping the pound in a currency union.

“As a transitional option, the Fiscal Commission said it was viable, but there are a number of other viable options.

“But the key point we’re making is arguing for the sterling union, which we think is the best option for Scotland.”

Shadow Foreign Secretary Douglas Alexander launched the latest stage of the Better Together campaign in Glasgow today, joining a group of activists bearing “No Thanks” banners and balloons.

Some Better Together activists joined in an impromptu rendition of Flower Of Scotland sung by a nearby busker while Mr Alexander called for clarity on Scotland’s currency.

Mr Salmond is in Angus today making a new Declaration of Arbroath, a nod to the defining medieval declaration of Scottish sovereignty.

The new declaration pledges to protect the NHS from privatisation and create a fairer society.

Mr Alexander, Labour MP for Paisley and Renfrewshire South, said: “What the people want isn’t so much a new Declaration of Arbroath but the declaration of some answers on the currency, on Europe, on how they will meet the additional costs and consequences of independence.

“We need some basic, straightforward answers from the First Minister.

“This morning he talked about transitional arrangements on the currency. Transition to what?

“The postal ballots drop in just a week’s time and still we don’t have the most basic answer on what will Scotland’s currency be?

“We don’t know the terms and timescale that it will take for Scotland to re-enter the EU and we don’t know how the nationalists will close the additional £6 billion funding gap that their policy of independence will create.

“That creates a real and present danger to our schools and our hospitals here in Scotland.

“I talked to hundreds of voters in Paisley at the weekend and I was conscious just how many people voluntarily raised the issue of currency on the doorstep.

“I think the single defining image of the first television debate was Alex Salmond’s inability to answer the most basic question.

“We know that the capital would be Edinburgh, we know that the flag would be the saltire but we don’t know what the currency would be.

“Burying his head in the sand at this point is a bit like digging a hole that is deeper for him in the coming days.

“If he thinks he can run and hide from answering these questions in the coming days, then I think he’s in for a disappointment come September 18.”