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Coalition minister: 'currency union would exist between iScotland and rest of UK'

The Deputy First Minister has welcomed reports that a pro-union government minister believes there would be a currency union between an independent Scotland and the rest of the UK.

Nicola Sturgeon
Nicola Sturgeon

The minister, who reportedly is at the heart of the pro-union campaign, told a newspaper tonight that while saying no to a currency union is a vital part of the no campaign, everything would change if there were a yes vote.

Deputy First Minister Nicola Sturgeon said the reports gave a big boost to the Yes campaign.

Chancellor George Osborne insisted last month that he would not agree to the key Scottish Government proposal to formally share sterling after a Yes vote on September 18.

The senior Tory was backed by Labour and Liberal Democrat leaders, suggesting no future UK Government would accept the SNP plan.

First Minister Alex Salmond immediately branded the position a bluff.

The unnamed government minister told The Guardian: "Of course there would be a currency union."

He added: "There would be a highly complex set of negotiations after a yes vote with many moving pieces. The UK wants to keep Trident nuclear weapons at Faslane and the Scottish government wants a currency union - you can see the outlines of a deal."

Almost half of voters north of the border think that Mr Osborne's pledge to rule out a formal currency union with an independent Scotland is a bluff, according to a poll published this week.

A YouGov poll suggests 45% of Scots do not believe the Chancellor's threat is real, compared with 40% who think he means what he says.

The minister told the newspaper: "You simply cannot imagine Westminster abandoning the people of Scotland. Saying no to a currency union is obviously a vital part of the no campaign. But everything would change in the negotiations if there were a yes vote."

Ms Sturgeon welcomed report.

She said: "This was supposed to be the No campaign's trump card, but as the polls show it has backfired badly - the gap between Yes and No has halved since November, and most Scots simply do not believe the bluff and bluster we had from George Osborne, Ed Balls and Danny Alexander.

"Now that the card has been withdrawn, it gives an even bigger boost to the Yes campaign. And it can only add to the sense of crisis which is engulfing the No campaign.

"The reality is that a currency union is every bit as much in the interests of the rest of the UK as an independent Scotland, and that is why Westminster will agree to one. Scotland is the rest of the UK's second biggest trading partner, and not sharing sterling would cost businesses south of the border an extra £500 million in transaction costs."

She added: "The leader of the No campaign, Alistair Darling, said that a shared sterling area between an independent Scotland and the rest of the UK is 'desirable' and 'logical' - and now the UK Government appears to have u-turned and actually agrees with that sensible position."

The Scottish Government's White Paper on independence, published last November, says a shared currency is in the "economic interests" of Scotland and the rest of the UK.

Scottish Secretary Alistair Carmichael said: "An anonymous, off the record quote does not change the stark reality on the currency.
"The UK Government has listened to the views of the Governor of the Bank of England and the independent advice of the Permanent Secretary to the Treasury that a currency would be damaging for all the United Kingdom.
"That's why a currency union simply will not happen.
"The Scottish Government should remove the uncertainty on the currency by coming forward with a plan B."

A Treasury spokesman said: "A currency union is not going to happen. The evidence shows it would not work.
"It would cost jobs and cost money and wouldn't provide economic security for Scotland or for the rest of the UK.
"Any suggestion otherwise is just complete fantasy."

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