A former adviser to Alex Salmond has argued it was “rather stupid” for the SNP to fail to outline a Plan B on currency in its white paper unveiled this week.
Professor John Kay, one of the UK’s top economists, said he would “expect to fail” in any negotiation to establish a monetary union with England after independence. He said an alternative plan must be a distinct Scottish currency.
The Scottish Government asserts in its white paper that maintaining a currency union is in the best interests of Scotland and the rest of the UK.
But Scottish Secretary Alistair Carmichael argued that SNP ministers had come up with a plan that no one else in the UK was going to want. Prime Minister David Cameron called a currency union “unlikely”.
Prof Kay, once a member of the first minister’s council of economic advisers, said: “Alex Salmond has said, I think rather stupidly, that there is no Plan B.
“It’s rather hard to see a country that represents 91.5% of a monetary union granting a great deal of oversight of its banking policies and fiscal policies to a country that represents 8.5% of the union.”
A Scottish Government spokeswoman said the pound was “as much Scotland’s as it is the rest of the UK’s”.
“We have put forward sensible proposals for a formal monetary union that would ensure both governments had full flexibility over their fiscal policies,” she added.
“A currency union is in the UK’s overwhelming economic interests due to the contribution Scotland makes to the sterling area, including its valuable contribution to the UK’s balance of payments.”
The governor of the Bank of England has said he “welcomes” the chance to discuss Alex Salmond’s plan to share sterling as currency after independence.
Mark Carney said basic discussions were held between his predecessor and the first minister.
“There has been an effort to set up a meeting and I’m sure it will happen at some point,” he added.
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