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Divisions deepen over independent Scotland's currency

By Keith Aitken in Edinburgh | 1 May 2013

Rows over whether an independent Scotland should stick with sterling increased this week as disagreements rose among supporters of independence and opponents rushed to exploit the divisions.

First Minister Alex Salmond and the governing Scottish National Party at Holyrood want an independent Scotland to remain with sterling, negotiating terms that would leave it subject to the monetary discipline of the Bank of England.

But others within the pro-independence camp have voiced doubts. The most serious came yesterday from YesScotland chair Dennis Canavan, a former Labour MP and independent MSP. Canavan said his own preference was for Scotland to have its own currency, and retain the possibility of joining the eurozone later if conditions there stabilised.

‘If Scotland were to have its own currency, then it would have far more freedom to do its own thing and it would have a full range of economic levers to determine its own economic policy,’ Canavan said.

Leaders of the smaller parties supporting the Yes campaign, Patrick Harvie of the Scottish Greens and Colin Fox of the Scottish Socialists, have expressed similar views. So far, party discipline has held firm in the upper ranks of the SNP, with public dissent limited to elder figures such as former leader Gordon Wilson and former deputy leader Jim Sillars.

Opponents of independence saw an opportunity to exploit the divisions. Better Together chair Alistair Darling, the former UK chancellor, said: ‘How on earth can they ask people to vote for independence when they can’t even agree amongst themselves the most basic and fundamental things like the currency we would use?’

The SNP policy is now coming under sustained attack from UK politicians, with Chancellor George Osborne travelling to Scotland last week to declare the view that it was unlikely the rest of the UK would accept a currency union on the sort of terms envisaged for an independent Scotland.

But Salmond has responded that the currency, like the Bank of England, belongs as much to Scotland as to any other part of the UK, and that a joint central bank is therefore logical. ‘The monetary policy would be run by the Bank of England, the taxation and spending would be run in Scotland by the Scottish finance minister,’ he insisted yesterday.

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