Unionism 'still has economic case'

Sep 6 2012

The Chancellor has entered the debate on Scottish independence by insisting there remains an economic case for staying in the United Kingdom.

There is more to Unionism than "wallowing in nostalgia", George Osborne said before giving a speech to business leaders in Glasgow.

Setting out his case for a No vote in late 2014, he accused Scotland's First Minister Alex Salmond of failing to provide a credible answer to his plan for a shared sterling currency union.

"Today the advocates of independence argue that Britain's value to Scotland is spent, that union is no longer in Scotland's economic interests and that those who continue to believe in Britain are wallowing in nostalgia," said Mr Osborne.

"I want to take this argument head-on. I make no apology for sharing all of the instinctive emotional attachment to Scotland's place within the UK. Our shared history and culture, distinct yet intertwined identities, a whole greater than the sum of its individual parts. And I reject the idea that while Britain has a glorious history, it has little relevance in tackling the challenges and grasping the opportunities of the modern world."

The existing single currency union in the UK has supported three centuries of economic and social integration, he said. He said the trouble in the eurozone is a warning of what can happen with a currency union without political union.

"That's why the eurozone are developing plans to control the fiscal positions of individual member states so that they can avoid the risks of contagion for all members of the union," he said.

"Greater political integration, because sharing a currency and perhaps a central bank means policies that are consistent not divergent. Members must be prepared to forgo individual interests and circumstances for the interests of the union as a whole. So it's difficult to argue for establishing a monetary union while pursuing fiscal and political separation.

"In a world in which a separate, independent Scotland wished to pursue divergent economic policies, what mechanism could there be for the Bank of England to set monetary policy, as it does now, to suit conditions in both Scotland and the rest of the UK?

"As Chancellor of the Exchequer, I have seen no such credible mechanisms proposed by those advocating independence. I am not clear they exist. If the Scottish Government cannot provide answers to these basic questions about Scotland's currency, then the Scottish people are entitled to ask this basic question in return: what path is the Scottish Government leading them down?"