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Veto on currency union to be enshrined in manifestos

THE three main UK parties will all make clear election manifesto pledges to veto a currency union with an independent Scotland if voters back Yes in next month's referendum, it has emerged.

UNITED FRONT: Labour leaders Ed Milliband and Johann Lamont with Better Together chief Alistair Darling. Picture: Colin Templeton
UNITED FRONT: Labour leaders Ed Milliband and Johann Lamont with Better Together chief Alistair Darling. Picture: Colin Templeton

Labour leader Ed Miliband made the commitment during a visit to Glasgow yesterday, arguing Alex Salmond's proposal for a formal pound-sharing pact was not in the interests of either Scotland or the rest of the UK.

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A senior Conservative Government source indicated his party would also use its 2015 Westminster election document to rule out a currency union if Scots vote for independence.

The Liberal Democrats also confirmed their intention to put the pledge to voters in writing.

The move, which would give an ­incoming UK Government of whatever party a clear mandate to block the plan, piled more pressure on the First Minister to outline a Plan B for the currency of an independent Scotland.

In a further blow to Mr Salmond's policy, his bid to force the UK to agree a currency union by threatening to walk away from Scotland's share of the UK national debt was dismissed by Alistair Darling. The threat, repeated by SNP Finance Secretary John Swinney in a BBC interview, was rubbished as "not credible" by the Better Together leader.

Lining up behind Mr Miliband, Mr Darling said a future UK Chancellor would be "phlegmatic" about the loss of £5 billion per year, the estimated scale of an independent Scotland's debt repayments.

Labour and the Conservatives ­hardened their position on the currency days after the issue dominated Tuesday's TV referendum debate between Mr Salmond and Mr Darling.

The Better Together leader was judged to have come out on top after the First Minister repeatedly refused to spell out his preferred alternative to his currency union plan. Mr Salmond has continued to resist growing pressure since then but has stressed an independent Scotland could not be prevented from using the pound without a deal to share the Bank of England. He has also warned that in those circumstances an independent Scotland would not accept its share of the UK's £1.4 trillion national debt.

Mr Salmond has described the option as "attractive" for Scotland but said it would not be acceptable to a future UK chancellor. He also claimed a Yes vote would give him a powerful "sovereign mandate" to demand a currency union.

However, speaking after addressing a ­Scottish Chambers of Commerce event yesterday, Mr Miliband said: "I'm very clear we're not going to sign up to a currency union in the event of an independent Scotland because I don't think it is in the interests of the UK and I think there is a real doubt about whether it is in the interests of Scotland as well. It's not something I'm prepared to sign up to."

Asked whether his pledge would appear in Labour's manifesto in the event of a Yes vote, he said: "Yes. I'm ruling it out now, so yes."

Mr Darling said Mr Salmond's threat to walk away from Scotland's debt was not credible. He added: "If you look at the total value of the UK's debts, the Scottish share is a small part of it. Having been the Chancellor I would say if you have a budget of £700bn you have to be sort of phlegmatic about £5bn."

He said walking away from the debt would increase borrowing costs for an independent Scotland, pushing up interest rates and mortgage costs, and cast a dark cloud over wider negotiations between Holyrood and Westminster.

A LibDem spokeswoman repeated her party's opposition to the plan, adding its position would be unchanged in the event of a Yes vote.

Mr Swinney said English businesses would face at least £500m of transaction costs if a currency union was not agreed. He added: "This demonstrates how ridiculous the position of the No campaign is - and demonstrates exactly why there will be a currency union."

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