The Treasury’s top civil servant has insisted that publishing his advice to UK Government ministers on a possible currency union with an independent Scotland was “vital to the national interest”.
Sir Nicholas Macpherson, the permanent secretary to the Treasury, said he was “confident” he did the right thing in taking the unusual step of making public his advice to Chancellor George Osborne.
The Tory chancellor ruled out a currency union after Sir Nicholas told him such an arrangement could be “fraught with difficulty” and raised concerns about the Scottish Government’s commitment to making such a deal work.
First Minister Alex Salmond insists that a currency union would be in the best interests of both Scotland and the rest of the UK if there is a Yes vote in September’s independence referendum.
But Sir Nicholas told Mr Osborne: “I would advise strongly against a currency union as currently advocated, if Scotland were to vote for independence.”
He told MPs on the public administration select committee that he had made his advice public because the UK Government wanted to make its position on the issue “absolutely unambiguous, absolutely clear”.
While Mr Salmond has accused Sir Nicholas of being beholden to his “political masters”, the Treasury permanent secretary said: “This was in the context where the Scottish Government was claiming something was not only in Britain’s interests, but that somehow the British Government was blustering and bluffing. So this was quite an exceptional set of circumstances which goes to the heart of the integrity of our currency.”
He added that making his advice public was not something he entered into lightly. “I happen to believe it was vital to the national interest. I’m confident I made the right decision.”
Publishing the advice was about making the “British Government position absolutely crystal-clear” in what was a “very unique context where you have another government in the United Kingdom asserting what the United Kingdom would do”.
Sir Nicholas said: “I do think these are quite exceptional circumstances which go right to the heart of the national interest. I remain unapologetic.
“I do not propose to make a habit of publishing advice. This was about convincing the British people, the wider world, the markets, of the sincerity of the government’s position.”
He said the financial problems in the eurozone had led to the Treasury being “cautious” about currency unions.