Osborne Speaks In Glasgow About Pound
An independent Scotland would be forced to adopt new currency arrangements that would be a ``very deep dive into uncharted waters'', George Osborne warned today.
The Chancellor said there were four currency options for Scotland if it left the UK, and all of them would be ``less suitable'' than the current system.
Launching a new report from the Treasury in Glasgow, Mr Osborne said there was no guarantee that the UK and Scotland would be able to come to an agreement on a currency union.
That would mean a separate Scotland was left with three options - unilaterally keeping the pound, creating a Scottish currency or joining the euro.
Mr Osborne said: ``All of these alternative currency arrangements are less suitable economically than we have now for both Scotland and the rest of the UK.''
The Chancellor said the Treasury analysis showed that the imperative to agree to a currency union would ``not be as strong'' for the UK as for Scotland.
Mr Osborne said: ``The fundamental political question this analysis provokes is this - why would 58 million citizens give away some of their sovereignty over monetary and potentially other economic policy to five million people in another state?''
Around a third of total Scottish output relies on exports to the rest of the UK while the reverse only amounts to less than 5%, he said.
``The rest of the UK, as the larger economy, would be much more exposed to the risk of an independent Scotland running into fiscal and financial difficulties.
``Let's be clear - abandoning current arrangements would represent a very deep dive indeed in to uncharted waters.
``Would a newly independent Scottish state be prepared to accept significant limits on its economic sovereignty? To submit its economic plans to Westminster before Holyrood?''
He went on: ``The conclusion is clear - the pound we share works well. The saying goes 'If it ain't broke, why fix it?' but I say 'If it ain't broke, don't break it'.
``The alternatives to the way Scotland now uses the pound are second best. Is second best really good enough for Scotland and for all our United Kingdom? We are better together.''