By Keith Aitken in Edinburgh | 12 February 2014
Deputy First Minister Nicola Sturgeon has accused Westminster politicians of trying to bluff and bully Scotland, following reports that Chancellor George Osborne will not back a Sterling currency union in the event of independence.
Osborne is expected to make clear in a speech tomorrow that he would not support Scotland’s membership of a Sterling currency union, as proposed by the Scottish National Party. There are suggestions that Labour and the Liberal Democrats will follow the chancellor’s lead.
In a radio interview this morning, Sturgeon described that stance as an empty threat which, if implemented, would impose unacceptable costs on businesses and taxpayers in the rest of the UK as much as in Scotland. She also repeated earlier hints by First Minister Alex Salmond that an independent Scotland would retaliate by refusing to accept its due share of UK public debt.
‘This is the clearest sign yet that the Westminster establishment thinks it is losing the argument on independence,’ Sturgeon claimed.
‘We have gone in under a week from David Cameron’s love-bombing to bullying and intimidation.’
Deploring what she called ‘a rather cack-handed bullying campaign move’, Sturgeon echoed the prediction by previous Bank of England governor Lord King that the tone of ministerial rhetoric would change if there was a ‘Yes’ vote and the context shifts to negotiating a settlement.
‘It’s a bluff, because if this was the position it would put them [the UK Government] at odds with public opinion on both sides of the border, cost their businesses millions in transaction costs, blow their balance of payments and leave them with billions of pounds of debt,’ Sturgeon said.
‘It’s our pound as much as everybody else’s.’
In the wake of previous suggestions that Scotland, if excluded from using Sterling, could refuse to accept its share of inherited public debt, the Treasury reassured markets last month that all UK debt would be honoured in the event of Scottish independence.
Sturgeon said it showed that the debt belonged legally to the Treasury. ‘I think that Scotland should meet a fair share of the costs of servicing that debt, but assets and liabilities go hand in hand.’
For all these reasons, she said, the threat to bar Scotland from a currency union ‘doesn’t bear scrutiny’. She added: ‘It begs the question of why would anyone want to stay part of a [political] union where we are treated with such contempt.’
Sturgeon’s stance was supported by the Greens’ Patrick Harvie, who called Osborne’s move ‘campaign bluster’.
But former Labour chancellor Alistair Darling, who chairs the Better Together No campaign, said: ‘The nationalist threat to default on debt if they don't get their way on currency is reckless.
‘The impact of Alex Salmond's default would be to say to the world that we cannot be trusted to honour our debts. The result would be higher interest rates for Scots on mortgages and credit cards.
