Scotland’s first minister Alex Salmond has claimed that Scotland could use the pound without an agreed currency union with the rest of the UK as a temporary “transitional option” while a more permanent solution for the independent country’s currency is established.
This unilateral use of the pound, referred to as ‘sterlingisation’, has already been ruled out as a workable currency plan by the independent fiscal commission established by the Scottish government to look at the viability of each of the different currency options that would be available to an independent Scotland.
Speaking yesterday to BBC Radio Scotland Salmond reiterated his stance that sharing the pound in a currency union with the UK is still “the best option for Scotland”.
But Salmond also suggested that an independent Scotland may continue to use the pound without the agreement of Westminster as a temporary currency solution, pointing out that the fiscal commission did state that sterlingisation was “viable” as a transitional option for Scotland.
He said: “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.”
However no details were given by Salmond of what currency option would then be adopted by an independent Scotland if an agreement could not be reached eventually with the UK government to share the pound.
In a response to Salmond’s suggestion to use a transitional currency from the pro-union Better Together campaign, Labour shadow foreign secretary Douglas raised the question of what currency the Scottish government would use after this transition.
He said: “This raises the inevitable question: a transition to which other currency?
“Which currency is he suggesting a transition to? How long would the transition period be? What would the cost to Scotland be of changing currency? Who will set our interest rates during the transition to this new currency?”
Pressure has been building on the Scottish government to give details of its ‘plan B’ for Scotland’s currency if its preferred option of sharing the pound with the UK does not go ahead.
In a speech to Dundee University, chief secretary to the Treasury Danny Alexander also said yesterday that there was “absolutely nothing” Salmond could do secure the pound in a currency union with the rest of the UK.