23/04/2013 Newsnight Scotland


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more prosperous and fairer country. Tonight on Newsnight Scotland will


have more on the debate over the currency including an interview with


George Osborne. Good evening, the Chancellor's chose St George's Day


to talk about sterling. His message was that the SNP's plan for Scotland


to continue to use the pound after independence is deeply flawed. The


Scottish Government were swift in their rebuttal as Andrew Black


reports. Spoke in England today celebrated


the life of St George, their patron saint, his namesake headed north in


the hope of slaying a nationalist Dragon. Welcome, ladies and


gentlemen. Thank you for coming... Dismissing SNP proposals to retain


the pound is an independent Scotland, George Osborne said things


worked fine as they are. The saying goes that if it isn't broke, don't


fix it but I say, if it isn't broke, don't break it. The


alternative is to the way Scotland is now uses the pound are second


best. Second best, is that really best for Scotland? As the Chancellor


came to Glasgow today, the Treasury published this document outlining


various options for the future of an independent Scotland. Everything


from a standalone currency to the SNP's preference of a sterling zone.


But all of these, say Mister Osborne, would leave Scotland and


the rest of the UK worse. The first Minister was also out and about and


talking up Scotland's future, this time in sciences. Alex Salmond today


endorsed the findings of the fiscal group set up by his own government.


It just happens to support monetary union. They think that would be the


best option for Scotland and for the rest of the UK so our approach has


been upfront and constructive, laying out what is best for the


people of Scotland and the people in the rest of the UK. Others in the


independence movement encouraged the SNP to keep an open mind. In the


long run, we should be looking to develop a separate currency. You


cannot do that overnight, take a slower, colour separation of


currency and that would make sense to me and give us the full powers to


make all of our decisions for ourselves. Despite big political


posturing, it is argued that if it does come to the crash, the UK


Government would come to some kind of agreement. This that the Scottish


Government is keen on keeping some sort of sterling connection means


that it is likely that that will go forward. I can't see the UK


Government being so obstructed as to put conditions in place that are


unacceptable so at the minute, that looks like it would be favoured.


Hopes are high that the independence debate is now turning the corner,


from trading in adult -- trading insults to discussion. Thanks for


coming along. As for the Chancellor, he is off back to Whitehall to plan


for his next move in the fight to keep the union.


This morning, I spoke with George Osborne and that was at a factory in


Castlemilk. I asked him if a sterling zone could suffer a crisis


like the one in the Eurozone. saying the arrangements at the


moment when Scotland is part of the UK and uses the pound like all other


parts of the UK, are the best arrangements for Scotland and for


the UK. And anybody who wants to change that relationship, anybody


who wants a separate Scotland needs to explain what they would do. And


the other options, like Scotland having its own currency board


joining the euro, or having a similar zone like the rest of the


UK. Full. Do you worry that there is a Eurozone style crisis? It would


beg also some questions about economic risks, about why a foreign


government which is what the rest of the UK would have become would want


to enter into this arrangement, why it would want to tie itself to the


economic policies of the Scottish Government so frankly I think it is


unlikely that the arrangement could be agreed with the rest of the UK or


indeed would work. If this is a profound analysis rather than


posturing, why don't you just say right now, as you would be the man


in charge of the negotiations on this should it come to pass, why


don't you say no? I am saying it is unlikely. Why not say no?I will not


negotiate before the measure because my argument is that we should keep


it together. It is the SNP who must answer questions. You could say this


is bad for the rest of the United Kingdom and we will not enter


negotiations. I think the best arrangement for both is to have what


we have at the moment and it is for those who want to break up that


arrangement to explain what they would put in its place and you have


heard from the SNP. Let's say Scotland becomes independent, you


represent the whole of the United Kingdom now, if you believe it is


such a bad idea to have a formal currency arrangement with an


independent Scotland, surely it is your responsibility to say to people


that you say as Chancellor that he will not negotiate this because we


could run the risk of a Eurozone crisis. I think the current


arrangements are the best. The Eurozone style currency zone which


you are asking me about, Scotland having its own currency, Scotland


using the pound as John Swinney suggesting without any consent, like


Panama uses the American dollar, those are second best options.


have pointed out somewhere in your document that the stability pact in


the Eurozone did not amount to a row of beans in the crisis. You said


this morning that in a currency zone they would have to be more


controlled by the UK over Scotland's budget than at the


moment. What do you mean? We're not just talking about borrowing or


pact, pact, what would you want to be able


to control? This is one of the questions about I currency zone


which is how much control do you give to a foreign government about


your tax, borrowing decisions? In the Eurozone, they have to submit


budgets to national parliaments and Brussels. So one question would be,


but the Scottish Government have to submit its budget to Westminster


before it is fitted to Holyrood for approval? That would include tax


policy? All decisions that affect the economic sustainability of ink


-- country. Tax is one component of borrowing. But John Swinney was


saying again this morning that they would hope that Scotland had full


fiscal freedom. That is not how currency zones operate and why the


way, what about the question that John Swinney does not address which


is who is to say that the rest of the United Kingdom, Northern Ireland


and Wales, would accept any kind of decision or control from an


independent Scotland over its budget policies? John Swinney says that


George Osborne is playing politics, if you want allows Scotland to use


the pound, then an independent Scotland will not take on a share of


the British national debt. What is your response to that? John Swinney


must answer basic questions about what currency Scotland would use if


they became independent. I will not renegotiate the terms of


independence because I wanted to remain in the UK and the best way


for Scotland to keep the pound is for Scotland to stay in the United


do not know how clearly you could hear that interview with George


Osborne, he is quite specifically making the point that the stability


pact where you have limits on stock of debt and borrowing did not work


in the Eurozone crisis and if he was to consider a currency union with an


independent Scotland, it would have to involve much more than that. He


says it must include tax and spending. Is that something you


would be prepared to contemplate? do not think it would be necessary


in that level of detail. An agreement about the strategic


financial framework would be. argument is that it didn't work in


the Eurozone and he is not prepared to repeat it in a British Eurozone,


if you like. It is about how clearly you secure that. Those requirements


were not securely founded on the member states involved in the


Eurozone. What is important is an approach to financial responsibility


which would be implicit in this arrangement and they would have to


be a very clear and rounding and well founded agreements around the


levels of debt that we could incur and the level of rowing we could


undertake. For example, let me give you a very basic example. One of the


points the Treasury makes in its document is that they would have to


be a commitment to a currency union say you couldn't have Scotland


flirting with the idea of joining the euro or setting up its own


currency if the rest of the UK was to agree to a currency union. Would


you be prepared to give a binding commitment that Scotland would not


apply to join the euro unless it was either agreed with the United


Kingdom order that the same time? -- or done at the same time. What


George Osborne has been saying is about his interpretation on the


currency question. I could not have been clear in all of the interviews


I have given for some considerable time that the Government's position


in Scotland is that we want to establish a sterling zone and we


reduced the currency of the pound. And that is our clear undisputed


option. You would be prepared to give the option I have suggested to


commitment because that is the commitment of the Scottish


Government. You seem to be suggesting today that if the British


government did not do what you wanted in a currency union of


Scotland votes for independence, you might not accept a share of the UK


national debt. Where you being serious or was it a joke? I was


pointing out the illogicality of George Osborne 's position. As


regards the pound and the Bank of England, he is saying that he


decides what happens and is the one who will determine what will happen


in that Scotland has no say at all. That cannot possibly be the case


because that would mean George Osborne determines the position


which has as much at stake for Scotland as the rest of the UK. I am


simply making the point that if George Osborne was taking control of


all of the assets then he must take control of all the liabilities and


debts also. There is an asymmetry here and that


is the problem. It is all very well to say your proposals for a currency


union makes sense and that you have economists with Nobel Prize is


backing you up. The point is, the British government will decide


whether this happens or not and they are seeing that they do not see any


way of making it work. Irrespective of how convincing your arguments,


ultimately, it does not matter, they will decide. It was interesting in


your interview with George Osborne and you give him every opportunity


to say no and he did not take it. That says to me that today has been


an escapade and posturing to try to make it all sounds too difficult,


too hard and with too many barriers to overcome. In reality, the


proposition that we have put forward and followed by the fiscal


commission which has distinguished people taking part in it, it makes


sense in the interests of Scotland and the rest of the United Kingdom


because of the trade that goes between our respective due


restrictions and because of the balance of payments.


If George Osborne and Danny Alexander stick to their current


idea that they do not think this will work and they will not agree to


it, what is your plan B? They have not said that. They said it cannot


work. You cannot possibly enter into a negotiation if you do not have a


plan B. That would be irresponsible to the people of Scotland. We should


argue as to what they think is the most appropriate arrangement for the


people of Scotland. And to put that in front of the Scottish population.


What if you do not get that? I will not second-guess and speculate about


these other options. We have a proposition that we have taken care


to develop and canvassed external opinion. We did that several weeks


ago and gone into all of the detail, more detail than the


Treasury have done. We have produced a strong and workable proposition.


You must have a plan B. You are in effect asking the people of Scotland


to vote for a proposition that depends on the agreement of the


British government when the British government is saying it is minded


not to agree to it. You cannot expect people to vote for


independence on that basis. The UK and did -- the UK government has not


said that. In their document they say it could be established by


agreement between the two governments. If the UK government is


to remain faithful to the Edinburgh Agreement that was signed in October


between the Prime Minister and the first Minister, both governments


agreed to work in a constructive spirit... You cannot seriously claim


that the British... No, I said the Edinburgh Agreement committed the


United Kingdom government to engage constructively with the Scottish


government to implement the terms of a yes result in a referendum in


September. If the UK government is going to remain true to that


commitment, we are entitled to say that this is our preferred option


and instead of posturing, they should deal seriously with this


matter. Is not the problem you have, and some people going for


independence would take this point of view also, is that you are so


desperate for this currency union, it is so important to do, that why


should you bother leaving the UK in the first place? That's back if it


is so important to you, why do you want to do this? If people do that


they would not have access to the full range of fiscal powers that I


believe are essential... That is where I think the Chancellor is


completely wrong. We must gain access to the economic and fiscal


levers that are much more comprehensive and go across the


whole selection of different areas in relation to the management of the


economy and to strengthen the Scottish economy. Thank you, John


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