By Richard Johnstone | 12 May 2014
Scottish Secretary Alistair Carmichael has cast doubt on the ability of an independent Scotland to deal with economic shocks after publishing the Westminster government’s latest analysis of the benefits of the union.
In a Scotland Office report, the government highlighted the ‘size and diversity of the UK economy has helped protect us from economic shocks like the 2008 banking crisis’.
The report stated: ‘The UK Government spent £45bn recapitalising the Royal Bank of Scotland in 2008, and the bank also received £275bn of state guarantees and loans. In total this support would have been twice the size of the whole Scottish economy in that year, including North Sea oil.’
It also reiterated the argument that the pound was the currency of the UK, and insisted a currency union between Scotland and the remainder of the UK would not be agreed. ‘If people in Scotland vote to leave the UK, we would also be voting to leave the UK pound. That is part of the choice that we are being asked to make,’ the report stated.
Carmichael said the benefits for the UK were clear and the plans for independence – as set out in the Scottish Government's White Paper – were not.
‘The booklet outlines the positives and the case for remaining in the UK is going from strength to strength. Meanwhile the Scottish Government are spending more and more time attacking and denouncing the UK whilst glossing over their lack of answers to questions that individuals, businesses and communities are asking on currency, on jobs, on the economy.
‘Their proposed currency union has no friends, it has been rejected by business and political parties alike in Scotland as well as the rest of the UK. The Scottish Government’s economic and fiscal plans are totally threadbare and their oil numbers have no credibility.’
A further Whitehall report would be published in the next few weeks analysing the likely state of the public finances in an independent Scotland, he added.
Responding to the publication, a spokesman for Scottish Deputy First Minister Nicola Sturgeon the analysis was ‘talking Scotland down’.
He added: ‘Alistair Carmichael is merely giving a fresh lick of paint to the same old scare stories with this flimsy pamphlet. In contrast, the Scottish Government’s 670-page plan for Scotland’s future, over 100,000 of which have been distributed or downloaded, and which sets out an economic policy that will always put job creation in Scotland first.
‘Scotland is the 14th wealthiest country in developed world – wealthier, per head, than UK, France, Italy and Japan. The referendum is about whether decisions about Scotland should be made in Scotland or by Tory-led Westminster governments such as that represented by Alistair Carmichael which is pushing up to 100,000 more children in Scotland into poverty and dragging us out of EU against our will.’
