Scots warned that independence means expulsion from sterling

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By FT

Whatapp NewsTelegram News

Scotland will be forced to quit sterling if it votes for independence next year, a cabinet minister has said, in the starkest warning yet for Scottish voters to remain in the UK.

Alistair Carmichael, the Scottish secretary, speaking to the Financial Times days before the Scottish government releases its vision for an independent Scotland, warned Holyrood not to assume it will be let back into the currency if the country becomes independent.

“George Osborne has said . . . it is highly unlikely. Most people in Whitehall understand that if George Osborne says something is highly unlikely, it is not going to happen,” said Mr Carmichael.

Asked if he shared the view that an independent Scotland would be excluded from sterling, Mr Carmichael said: “Yes.”

Mr Carmichael’s words are a significant toughening of the language being used by cabinet ministers 10 months away from the independence vote.

While chancellor Mr Osborne has said that it would be “highly unlikely” that Scotland could continue using sterling, he has refused to rule it out, insisting that he would not “prenegotiate” the terms of the country’s exit from the union.

Ministers have in general shied away from issuing direct threats to the Scottish National Party for fear of being accused of bullying tactics and alienating Scottish voters.

The Scotland secretary’s words are part of a concerted campaign across the union to rebut suggestions that a separate Scotland could simply continue to use sterling. Carwyn Jones, the Welsh first minister, said on Wednesday that his Labour-led government should also be given a veto on the idea.

The message comes as the SNP-led government prepares to unveil its blueprint for the make-up of an independent Scotland. The Scottish government is likely to recommend staying within sterling, which would also allow it to share the benefits of the Bank of England as a lender of last resort.

SNP leaders insist that sterling is an “asset” part-owned by Scotland.

Alex Salmond, SNP first minister, tried to ward off the threat of exclusion last week by saying that if that happened, Scotland would not be obliged to take on its share of the UK national debt.


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