LONDON Jan 31 Scottish leader Alex Salmond said
his proposal to form a currency union with the rest of Britain
if Scotland voted to become independent would not weaken his
nation's sovereignty as it would leave Edinburgh in full control
In an interview with the Financial Times on Saturday, the
head of Scotland's devolved parliament dismissed concerns about
the workings of a sterling union which were highlighted this
week by Bank of England Governor Mark Carney.
Salmond is leading the drive for Scotland to split from
Britain in a Sept. 18 referendum, arguing that Scots will be
better off in charge of their own finances.
British Prime Minister David Cameron's government opposes
Scottish independence, saying both sides of the border benefit
from the 307-year-old union.
As the debate intensifies, the currency has become a major
battlefield, with Salmond insisting Scotland has a right to its
share of British assets, which would mean using the pound and
central bank, the Bank of England, as the lender of last resort.
But the British government has given no guarantee of
accepting such an arrangement and said it is highly unlikely
that it could be reached.
Salmond, Scotland's First Minister since 2007, reiterated
his warning that without a share of UK assets, an independent
Scotland could walk away from its share of UK liabilities such
as its 1.2 trillion pounds ($2.0 trillion) of government debt.
"You've got a negotiation where the UK government will want
to persuade the Scottish representatives that they should take
on a share of debt which is the legal liability of Her Majesty's
Treasury," he told the Financial Times.
Salmond said an independent Scotland would be happy to cede
sovereignty on monetary policy but on fiscal policy it would
only have to accept aggregate limits to state debt and
He dismissed assertions by Alistair Darling, former British
chancellor (finance minister), a Scot and leader of the
pro-union Better Together campaign, that a currency deal would
mean Scotland having to seek approval from London for its tax
policy. "That doesn't cover the rates of taxation, I don't think
there's any need for that," Salmond said.
The creation of a currency union with the rest of Britain is
central to Salmond's Scottish National Party (SNP) vision of an
independent Scotland. Alternative options such as joining the
euro zone or creating a new currency are seen as more expensive
and potentially riskier.
Some in the SNP accept a currency union might involve
limited fiscal policy freedom, but say it would still leave an
independent Scotland with far more control over its economic
destiny than possible as a devolved part of Britain.
With the nationalists lagging in opinion polls, investors
have shown little concern about the chance of Scotland seceding
But an ICM poll last Sunday showed the independence campaign
gaining ground after two stagnant years, with 37 percent backing
independence, up five percentage points, with 44 percent against
and 19 percent unsure.