The head of Alex Salmond’s economic advisory group has insisted the chancellor is not serious in his rejection of a formal currency union with an independent Scotland.
Crawford Beveridge, chairman of the Fiscal Commission Working Group, claimed “economics will trump politics” if there is a “Yes” vote.
Earlier this year, George Osborne announced the UK Government would not accept a formal currency union because of the risks to taxpayers in the rest of the UK in the event of a another banking crisis. In an unprecedented move, Labour and the Liberal Democrats backed the chancellor, putting pressure on Mr Salmond to come up with a “plan B”, something the first minister has refused to do.
Mr Beveridge told Holyrood’s economy committee yesterday that the fiscal commission stood by its earlier conclusion that a currency union was the best option for both sides of the border.
“I don’t think any of us on the committee believe for a minute that the chancellor is serious,” he said.
“We warned in our report last year that leading up to this there were going to be a lot of political statements, but in our opinion economics will trump the politics on this, and good heads will prevail if there happens to be a ‘Yes’ vote.
“We would not want to even talk about a plan B at this stage of the game.”
Afterwards Scottish Secretary Alistair Carmichael wrote to Mr Beveridge insisting a currency union “is not going to happen”.
As the fiscal commission prepares to meet today, Mr Carmichael said: “I would urge the commission not to waste a minute of their time considering a currency option that is dead.”
Other experts giving evidence to the committee did not agree with Mr Beveridge. Dr Angus Armstrong, of the National Institute of Economic and Social Research, said the chancellor’s position was “entirely rational”.
“Based on the aspiration, pointed out in the white paper, to build a Scotland which reflects the values and aspirations of Scottish people, then I think you want to have something that allows you the policy levers to be able to do that,” he said.
“There is, in my view, only one option which allows you that full range – and that would be your own currency.”