Alex Salmond is still incapable of formulating a decent plan for what Scotland would do without the pound
by Jay Elwes / August 6, 2014 / Leave a comment
Last night’s TV debate wasn’t the decisive victory that Salmond hoped for. © Harris Morgan/Antonio Cruz/ABr
The debate on Scottish independence between Alex Salmond, Scotland’s First Minister, and Alistair Darling, the former Labour Chancellor came down to one big economic question—currency. If Scotland left the UK, would it be able to retain the pound?
Alistair Darling commented that expecting to retain the pound was like “getting a divorce and keeping the same joint bank account,” a good line that would have sounded better if he had been able to make it sound more spontaneous. Salmond countered that it was only “logical” for Scotland to retain the pound, and that whatever status the pound enjoys in global markets is in part down to the efforts of Scotland’s economy.”
But Darling did not let Salmond get away and in the passage of the debate where one speaker was allowed to question the other, Darling pressed hard on the monetary question. The pound, he said, is the currency not of England, not of Scotland, but of the UK, the country that you intend to leave. So if Scotland leaves, what is your plan B? To this Salmond replied once more that it was Scotland’s pound, and then produced the transcript of an interview in which Darling had referred to a currency union as “desirable.”
Darling waved this away and invited Salmond to “contemplate for one moment that you might be wrong,” about the ability of Scotland to keep the pound. It was a powerful piece of rhetoric. The crowd responded well. From that moment, Darling had won, as evidenced by the questions that came later from the floor on the same point. Darling persisted, saying that Salmond would not only have to shed the pound, but that if he intended to retain the pound without a formal currency union, that is, keep the pound no matter what Westminster said, then there would be no central bank backing the Scottish currency. This would leave Scotland without a safety net in the event of a future financial crisis.
Darling then moved from monetary to fiscal questions, asking Salmond to comment on an IFS finding that Scotland has a £6bn black hole in its balance sheet. Salmond retorted that his plan…
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