:00:00. > :00:08.Alex Salmond won't admit he's got one but we won't let that
:00:09. > :00:35.Tonight we examine what Plan B might look like.
:00:36. > :00:39.The pound in your pocket is assuming a central role in the referendum.
:00:40. > :00:41.As Alex Salmond insists would still be a pound in your pocket
:00:42. > :00:45.And no campaigners won't stop asking him for his Plan B
:00:46. > :00:47.if the UK refuses to share sterling in a currency union.
:00:48. > :00:48.Confused? Well, you are not alone.
:00:49. > :00:50.Don't worry. Tonight we will explain all the options.
:00:51. > :00:53.The US congress probably don't care what currency we would use but
:00:54. > :00:56.they did pass a motion today stating a Untied Kingdom is important to
:00:57. > :01:01.And why are Glasgow City Council's plans to fly the Palestinian flag
:01:02. > :01:09.over the city chambers tomorrow upsetting so many people?
:01:10. > :01:12.Alex Salmond was quizzed again today over his Plan B for the Scottish
:01:13. > :01:16.The Unionist parties think they are onto a winner every time he
:01:17. > :01:20.But are voters really passionately concerned
:01:21. > :01:25.Or are we all getting a bit baffled by the different options?
:01:26. > :01:29.Tonight we have got the experts who have promised to explain in words of
:01:30. > :01:33.few syllables exactly what it all means to each and every one of us.
:01:34. > :01:51.First, here is our economics correspondent Colletta Smith.
:01:52. > :02:11.Today, the talk about currency from politicians on both sides of the
:02:12. > :02:31.chamber was much of what we have heard before. With the Labour leader
:02:32. > :03:24.asking a familiar question of the First Minister. He haze a range of
:03:25. > :03:52.other option, please share with us, what is Plan B? It is on page 110 of
:03:53. > :03:59.the White Paper. These are for the euro which we don't support, affixed
:04:00. > :04:03.exchange-rate policy, perfectly viable but not as good as keeping
:04:04. > :04:05.sterling. It also point out that we cannot be stopped from keeping the
:04:06. > :04:19.pound. The best way to regulate the UK's
:04:20. > :04:21.financial market is to have them within its financial boundary, but
:04:22. > :04:26.now I respect that they would move their locations. This is serious
:04:27. > :04:30.trouble has led to pressure within the yes campaign for Mr Salmond to
:04:31. > :04:34.drop the talk of sterling ideation and start looking at another option
:04:35. > :04:39.on the list, the idea of their own currency. We have a viable
:04:40. > :04:48.alternative, a Scottish currency with our own central bank. Which we
:04:49. > :04:52.will have one-to-one with sterling, so there is no difference. Any Plan
:04:53. > :04:56.B option that an independent Scotland might need would have
:04:57. > :04:58.economic downsides which means the yes Scotland campaign art keen to
:04:59. > :05:02.formally stick to the pound. And in
:05:03. > :05:04.our Edinburgh studio is one of the authors of that report you saw just
:05:05. > :05:07.now in the film, Dr Angus Armstrong from the National Institute
:05:08. > :05:17.of Economic Social research. Alex Salmond is very keen to keep
:05:18. > :05:20.pointing out that even if plan a does not work out that we cannot be
:05:21. > :05:25.stopped from using the pound because it is an international traded
:05:26. > :05:30.currency. Would be the issues if Scotland were to try to use sterling
:05:31. > :05:34.without a formal currency union? Scotland could indeed use of
:05:35. > :05:36.sterling or any other currency internationally traded, for that
:05:37. > :05:42.matter, that it wishes to. The issue is that if it is using the currency
:05:43. > :05:46.of what would be another country, that is the rest of the UK, then it
:05:47. > :05:50.would not have a central bank. So Scotland would be operating a
:05:51. > :05:54.financial system without a central bank. Which means that you do not
:05:55. > :05:59.have a lender of last resort, a phrase which none of us had not
:06:00. > :06:05.heard before 2008, I am sure economists had! We needed one then
:06:06. > :06:06.but that is a once in a 100 year event to have a financial crisis
:06:07. > :06:11.like that event to have a financial crisis
:06:12. > :06:16.like so how important is it to have one? Lender of last resort covers a
:06:17. > :06:20.whole menu of operations, so you have a day-to-day one which
:06:21. > :06:26.international banks transact with, so the Bank of England, they are
:06:27. > :06:29.frequent operations. Every now and again, financial markets become
:06:30. > :06:34.nervous and worried and that is when we think about having emergency
:06:35. > :06:40.liquidity assistance as it is called, which is really when you are
:06:41. > :06:44.not quite sure, 100%, that the bank is going to be a K. That decision is
:06:45. > :06:53.made by the Chancellor is going to be a K. That decision is
:06:54. > :06:59.made by the -- Chancellor of fixed deck. It has become clear that if we
:07:00. > :07:04.do not share sterling, we would not share the UK's debts. That could
:07:05. > :07:07.pretty quickly add up to a large savings accounts that could amount
:07:08. > :07:16.to a lender of last resort, doesn't it? You have a couple of issues
:07:17. > :07:19.here. The amount of stockpiles that smaller countries in global terms
:07:20. > :07:25.have large banking sectors have very large reserves. The most obvious
:07:26. > :07:30.examples are countries like Hong Kong, they have $300 billion of
:07:31. > :07:35.foreign exchanges that, one third of its GDP in fiscal reserves, enormous
:07:36. > :07:40.reserves, so it would take many years to build up that sort of
:07:41. > :07:43.stockpile. Then you have got the issue of an independent Scotland did
:07:44. > :07:47.not take what people generally thought to be a fair share of debt,
:07:48. > :07:51.how would international investors and perhaps even euro members
:07:52. > :07:55.consider that in terms of a responsible approach? Most of the
:07:56. > :08:00.times when people do not pay off their fair share of debt, it has
:08:01. > :08:04.eight negative consequence. I am not sure that is the option to get you
:08:05. > :08:10.out of this. The report issued the -- mentioned the issue for financial
:08:11. > :08:14.institutions headquartered in Scotland, that they might not be
:08:15. > :08:18.able to do business where they could not have access to a lender of last
:08:19. > :08:21.resort. But bankers are not very popular, some people might say good
:08:22. > :08:28.riddance if they want to move to the UK. You are quite right, they are
:08:29. > :08:32.not popular for good reason. Banking and financial services however is
:08:33. > :08:41.Scotland's biggest export sector. It is nearly 10% of total output in
:08:42. > :08:46.Scotland. So it continues to have a financial effect, having a strong
:08:47. > :08:49.sector is importing. If Scotland started importing those services,
:08:50. > :08:57.that would lead to more money going out of Scotland and lower incomes.
:08:58. > :09:00.So it important to maintain that an encouraged other export sectors for
:09:01. > :09:07.a more prosperous Scotland. There is another option which many on the yes
:09:08. > :09:10.camp are keen on, launching a separate Scottish currency, which
:09:11. > :09:15.would be possible, wouldn't it? It would, and Scotland a separate
:09:16. > :09:23.currency, it would then have eight separate bank. That would open
:09:24. > :09:25.option options. If you look across the world, Asian and Scandinavian
:09:26. > :09:31.countries, similar countries who are successful with the same wealth
:09:32. > :09:35.level, they all have their own currencies. It will take difficulty
:09:36. > :09:40.in transition but it is something that could be managed and it is a
:09:41. > :09:45.viable option, if Scotland decides that it wants to be an independent
:09:46. > :09:49.Scotland. Having your own currency is a pretty normal step. People have
:09:50. > :09:55.talked about picking it exactly to the pound so that cross-border trade
:09:56. > :09:59.would be easy, one Scottish pound would be one English pound, can you
:10:00. > :10:03.do that without vast reserves of currency? The most important thing
:10:04. > :10:08.is that foreign investors and Scots have confidence that the government
:10:09. > :10:11.can maintain the value of the currency. Having your own central
:10:12. > :10:16.bank and currency is step one. The second step is credible economic
:10:17. > :10:22.policy that residents and foreign investors believe in, and then you
:10:23. > :10:27.can support pegged exchange rates, but it is all about making sure you
:10:28. > :10:28.have this credible economic policy. Thank you very much for explaining
:10:29. > :10:31.all of that to us. Listening to that are two economic
:10:32. > :10:33.commentators and authors. They are George Kerevan and
:10:34. > :10:44.Peter Jones. Peter Jones, how much of the problem
:10:45. > :10:48.is Plan B for Alex Salmond now? It is a problem because he has opened
:10:49. > :10:52.the door for it, essentially. He was trying to stick very hard to the
:10:53. > :10:58.line that it was in both Scotland and the rest of the UK's interest to
:10:59. > :11:02.have a currency union and that the statements that it would not happen
:11:03. > :11:11.by George Osborne except were just a bluff. He has kind of blown a hole
:11:12. > :11:17.through that by saying that the sterling option you have just been
:11:18. > :11:21.talking about is quite attractive. And referring to it again during
:11:22. > :11:29.First Minister's questions today. That creates a much more uncertain
:11:30. > :11:33.question than there was before this particular row blew up. And voters
:11:34. > :11:37.want certainty, they don't want uncertainty. Voters wants to know
:11:38. > :11:41.what Plan B is, because they can't be guaranteed that there is king to
:11:42. > :11:48.be a stunning union so we need to know what the options are. We will
:11:49. > :11:53.try and make this simple, you have got the old lags talking about this!
:11:54. > :11:59.You are the exception! I think the SNP have been surprised with the
:12:00. > :12:03.vehemence by which the main parties at Westminster have rejected what is
:12:04. > :12:07.a fairly straightforward notion of a currency union. After all, Scotland
:12:08. > :12:11.a fairly straightforward notion of a currency union. After all, and
:12:12. > :12:17.England satisfy the criteria of any such arrangement because their
:12:18. > :12:21.economies are very similarly linked. Much of the opposition has come from
:12:22. > :12:25.the Labour side, from Ed Balls. I want people out in television -- I
:12:26. > :12:35.want to warn people in television land, I think Ed Boyd -- Ed Balls
:12:36. > :12:39.wants to avoid the kind of rules coming out of currency union would
:12:40. > :12:44.have to limit borrowing, which is not what he wants to do. If he wants
:12:45. > :12:51.to do what he did last time he was advising Chancellor, we would see
:12:52. > :12:56.interest shoot up. But it only matters that it cannot have a
:12:57. > :12:58.stunning union and it creates a -- sterling union and it greater
:12:59. > :13:03.political problem for the yes campaign. Where Alex Salmond came
:13:04. > :13:08.from originally was, they thought and I think they were correct, that
:13:09. > :13:14.we needed to keep the pound matched to the pound in our UK, so that
:13:15. > :13:20.trade was easier and people when they got their pension or wages knew
:13:21. > :13:26.what it was worth. You can keep that and still do that, without actually
:13:27. > :13:30.having the former currency union. -- formal. You begin by setting up a
:13:31. > :13:35.central bank and pegging the two currencies. Is it politically more
:13:36. > :13:41.attractive to Page -- take the option and saying a Scottish
:13:42. > :13:45.currency will be worth the same as the British pound? It is
:13:46. > :13:50.economically more attractive because the big problem is that you do not
:13:51. > :13:57.have the ability to print money in the event of a crisis or particular
:13:58. > :14:01.problem that you need to deal with. It is quite politically attractive,
:14:02. > :14:06.an independent country having its own currency. The problem is, the
:14:07. > :14:12.moment Alex Salmond wants to move off plan A, and now it is, the
:14:13. > :14:18.opponents will leap on and say, can we believe this man, tomorrow it
:14:19. > :14:23.might be planned sea or plenty. -- plan C or plan B. If he can be
:14:24. > :14:27.believed on this, what about everything else he says is a dead
:14:28. > :14:38.set like EU membership? He blows the entire campaign out of the water. He
:14:39. > :14:43.is in a hard place. We be talking about Plan B a lot for the six
:14:44. > :14:48.weeks. Alex Salmond has been forced into a corner because the
:14:49. > :14:58.Westminster parties are getting a perfectly centred -- are rejecting a
:14:59. > :15:05.perfectly sensible idea. What would happen if Scotland had a separate
:15:06. > :15:15.currency and the interest rates were higher than in England? The money
:15:16. > :15:26.would move out of English banks. The costs for English, Welsh and Irish
:15:27. > :15:33.banks are there as well. It is not is a surprise that Alex Salmond is
:15:34. > :15:40.so bright. -- is surprised. Now, you might think they had enough
:15:41. > :15:43.to worry about in the US congress as they consider foreign affairs
:15:44. > :15:45.crisises from Gaza to Iraq. But they found time today
:15:46. > :15:48.to pass a motion today expressing their support for a secure,
:15:49. > :15:50.prosperous and UNITED Kingdom - echoing similar sentiments
:15:51. > :16:01.from the US President. Back in June, Barack Obama threw in
:16:02. > :16:10.his 2 cents on the Scottish referendum. He intimated he was in
:16:11. > :16:15.favour of a no vote. We have a deep interest in making sure that one of
:16:16. > :16:25.the closest allies that we will ever have remains strong, robust, United
:16:26. > :16:29.and effective. Now the issue of independence has reached the US
:16:30. > :16:38.Congress. Brad Sherman has tabled a motion saying that...
:16:39. > :16:45.Signed by 27 Republicans and Democrats, it seems that President
:16:46. > :16:46.Obama is not the only one in favour of the United Kingdom stayed
:16:47. > :16:50.together. -- staying together. Live in Washington,
:16:51. > :16:53.we can now to talk to the Senator who put forward the motion to
:16:54. > :16:55.the House, Brad Sherman. And in our Edinburgh Studio
:16:56. > :16:57.is Professor Joe Goldblatt. Originally from Texas,
:16:58. > :16:59.he has dual citizenship and is a member
:17:00. > :17:03.of Academics for Yes. Let me come to you first,
:17:04. > :17:09.congressmen. Why did you feel motivated to put this before the
:17:10. > :17:12.house? I thought it was important to echo President Obama's statements.
:17:13. > :17:19.They are broadly reflective of the thinking here in Washington and that
:17:20. > :17:22.is why I was able to put forward a resolution, supported by the
:17:23. > :17:28.Republican chairman and the Democratic ranking member of the
:17:29. > :17:35.Foreign Affairs Committee. And also a wide swathe of American opinion. I
:17:36. > :17:44.know the BBC has to keep things balanced. To have balance, you would
:17:45. > :17:52.need to have a member of Congress who was opposed and I do not think
:17:53. > :17:58.you found one. But we do have a member in favour of independence in
:17:59. > :18:01.our studio. Are you surprised that the American Congress is taking so
:18:02. > :18:10.much interest? First of all, the good evening representative
:18:11. > :18:15.Sherman. You will be welcome here. I was surprised. I thought it was
:18:16. > :18:20.ironic and oxymoronic because in the same breath, this resolution states
:18:21. > :18:27.that it is Scotland's decision and yet that they seek that we be part
:18:28. > :18:29.of a united kingdom. In fact, we would be more united post
:18:30. > :18:37.independence because of our opportunity to help not only this
:18:38. > :18:45.continent grow but the European Parliament grow as well. The
:18:46. > :18:57.environmental side is a specific interest of this representative. You
:18:58. > :19:01.said that national security would be undermined if the United Kingdom did
:19:02. > :19:08.not stay together. Why is that? The United Kingdom has been our
:19:09. > :19:12.strongest ally. It is, militarily and in terms of intelligence and
:19:13. > :19:18.cyber security, the strongest ally the US has. I was particularly
:19:19. > :19:24.distressed by the White Paper on defence that talked about how, while
:19:25. > :19:28.there are many important defence assets located in Scotland, these do
:19:29. > :19:33.not operate in isolation in order to fulfil their roles effectively, they
:19:34. > :19:38.require close integration. I spent some time thinking, what would
:19:39. > :19:43.happen if the facet's native Texas became independent and we had to
:19:44. > :19:50.separate the bureaucracies we had here. I do not know how deep
:19:51. > :19:54.bureaucracies would work in Great Britain and Northern Ireland but I
:19:55. > :20:00.know that if you have to separate out any bureaucracy, either the Army
:20:01. > :20:06.or navy or any federal agency, the bureaucrats would spend virtually
:20:07. > :20:12.all of their time focusing on how to disintegrate their organisations and
:20:13. > :20:21.they would not have the time to focus on threats, and other issues
:20:22. > :20:24.will stop I shudder to think what would happen if you took any single
:20:25. > :20:29.federal agency and decided to break it apart, do disintegrate it. I
:20:30. > :22:21.think they would be many years where they
:22:22. > :22:28.such a train of abuses and... I do not know David Cameron well but he
:22:29. > :22:29.does not sound like a despot. Thank you very much for joining us
:22:30. > :22:42.tonight. we see the scale
:22:43. > :22:46.of human suffering in Gaza. we hear the sirens as civilians
:22:47. > :22:50.seek shelter from rockets. to show its support
:22:51. > :22:53.for the people of Gaza by flying the Palestinian flag
:22:54. > :22:56.from the City Chambers tomorrow but this has alarmed
:22:57. > :22:57.the Jewish community. Our reporter, Andrew Kerr,
:22:58. > :22:59.has been hearing the arguments on both sides as different groups
:23:00. > :23:08.react to the strong symbolism Inspiration. Trepidation. Nation. A
:23:09. > :23:13.simple piece of fabric, it says so much with so little. Symbols come in
:23:14. > :23:18.all shapes, colours and sizes. This one could represent unity. The one
:23:19. > :23:24.flying above the city Chambers today, mission heard. The one flying
:23:25. > :23:28.above the city Chambers tomorrow, a lot more controversial. It will be
:23:29. > :23:37.the Palestinian flag fluttering there, much in evidence at a protest
:23:38. > :23:42.today. They are showing their solidarity with the people of Gaza.
:23:43. > :23:53.They have been asking us to show solidarity with the Victim Support
:23:54. > :24:01.conflict. -- with the victims of the conflict. There has been a long
:24:02. > :24:03.tradition of Scottish local authorities supporting the
:24:04. > :24:11.Palestinian cause. This was Dundee in the 70s. The plan to fly the flag
:24:12. > :24:13.tomorrow has angered the Jewish community. They met council leaders
:24:14. > :24:21.this afternoon to talk about their concerns. The Trinity is upset about
:24:22. > :24:30.it and it is not only very upset butt it is concerned about it -- but
:24:31. > :24:36.it is concerned about it. We are disappointed by it. It is a
:24:37. > :24:41.community that does not often raise its head above the parapet. They say
:24:42. > :24:47.the hurt is deeply felt and there is a growing sense of unease about
:24:48. > :24:51.duelling anti-Semitism. Treat flags of caution is the message from
:24:52. > :24:54.experts who study them. I don't be good is appropriate for any other
:24:55. > :25:00.country 's macro flag other than Scotland and the UK's flag to fly
:25:01. > :25:03.above a British City Hall. You think it is a simple square of fabric but
:25:04. > :25:11.the meaning built into them can be very deep for many people. Flying
:25:12. > :25:13.flags on buildings can have a huge significance and you need to bear
:25:14. > :25:17.that in mind when you're planning to do so. Look around George where any
:25:18. > :25:21.time and you will see flags on the buildings, all sending a message.
:25:22. > :25:23.Look around tomorrow and there will be a new one, loaded with meaning.
:25:24. > :25:25.Joining us this evening is Dr John MacDonald,
:25:26. > :25:27.who is a director of the Scottish Global Forum.
:25:28. > :25:31.And Raymond Mann from the Scottish Friends Of Israel group.
:25:32. > :25:39.Thank you for coming in. Why does the Jewish community feel hurt and
:25:40. > :25:42.upset by this plan? It is not an attack on the Jewish community or in
:25:43. > :25:46.Israel. It is a gesture of solidarity with the people in Gaza.
:25:47. > :25:52.The problem with the Middle East and the conflict is nothing to do with
:25:53. > :25:57.the flag being flown over Glasgow. It is a pathological ideology. A
:25:58. > :26:03.delusional perception of what the Middle East conflict is about. It is
:26:04. > :26:16.a distortion, where lies become truth, victims become attackers.
:26:17. > :26:24.Hamas and the PLO treat the media and the intelligentsia of the West
:26:25. > :26:31.as propagandists who were not truly aware or fully cognisant of what the
:26:32. > :26:34.cause is and that is the destruction of Israel. You cannot deny the
:26:35. > :26:45.destruction taking place in Gaza right now. Why do you think that
:26:46. > :26:54.showing solidarity with the people there is an attack on Israel? They
:26:55. > :27:04.should be flying two flags. The Palestinian flag and the Israeli
:27:05. > :27:12.flag. Doctor McDonald, what difference will it make to the
:27:13. > :27:27.people of Gaza if a flag is flown in Glasgow? It will make racial
:27:28. > :27:29.difference. The people of Gaza may feel forgotten. The politics are
:27:30. > :27:45.complicated but this is about human Terry and is. It is a humanitarian
:27:46. > :27:59.crisis. Gaza, let us not forget, is being slowly raised to the ground.
:28:00. > :28:02.-- is being slowly levelled. This will at least make them feel a
:28:03. > :28:05.modicum of the sense that they are not forgotten. Does it not show that
:28:06. > :28:10.the actions of the Israeli government are doing a great deal of
:28:11. > :28:14.harm to Israel at the moment? It is the way the media have portrayed it.
:28:15. > :28:19.The people in the media, and day after day, night after night,
:28:20. > :28:23.showing the children in hospitals and you are focused on that, as you
:28:24. > :28:27.have done in no other conduct in the past few decades. You cannot deny
:28:28. > :28:35.that hundreds of people have been killed. Fewer than dozen have been
:28:36. > :28:48.-- fewer than dozens have been killed in Israel to. Why do they
:28:49. > :28:52.leave them up above when they hide like rats in the tunnels below?
:28:53. > :28:57.I'll be back again at the same time on Monday.