First Minister Alex Salmond has claimed that a Westminster withdrawal of the pound from an independent Scotland would inflict a “George tax” on businesses across the rest of the UK at a cost of some £500million.
Mr Salmond, speaking in Aberdeen yesterday, made a full defence against claims from Chancellor George Osborne last week that Scotland would lose use of the pound should it choose to go it alone at September’s referendum.
The East Aberdeenshire MSP refused to back down from his ‘Plan A’ of a currency union with the rest of the UK but would not be drawn on any alternative to the proposal widely dismantled by the three main Westminster parties.
He also sought to rebuff claims by European Commission President Jose Manuel Barroso that it would be “extremely difficult, if not impossible” for an independent Scotland to join the EU.
Last night, Mr Osborne described Mr Salmond as a “man without a plan” over the crunch issue of currency and stressed that an independent Scotland would not retain the pound.
But Mr Salmond claimed that Mr Osborne was merely deploying a campaign scare tactic and accused the chancellor of offering a “misleading caricature” of the economic realities of Scottish independence.
As he sought to explain the fine detail of a currency union, the first minister said Mr Osborne’s position would inflict massive transaction costs on firms exporting goods north of the border.
Mr Salmond said: “I am publishing an estimate today of the transactions cost he would potentially impose on businesses in the rest of the UK. They run to many hundreds of millions of pounds.
“My submission is that this charge – let’s call it the George tax – would be impossible to sell to English businesses.”
He also claimed Mr Osborne had “downplayed” the £30billion worth of Scottish oil and gas exports within the sterling area.
Retaining a single currency area provided “transparency of pricing” to the benefit of consumers in both Scotland and the rest of the UK, the First Minister claimed.
Watch highlights of Mr Salmond’s speech to business leaders below
Mr Osborne had earlier claimed an independent Scotland would have no legal basis to a share in the UK pound or the Bank of England.
Mr Salmond said yesterday: “If there is no legal basis for Scotland having a share of the public asset of the Bank of England then there is equally no legal basis for Scotland accepting a share of the public liability of the national debt.”
He later added: “My argument is to say let’s do this another way. Let’s share and share alike.”
Mr Salmond pointed to five separate currency options for an independent Scotland set out by the Fiscal Commission Working Group, but the First Minister refused to divulge a “Plan B”.
He added: “My preferred option is to have a currency union. I am not going to get kicked off by George Osborne running a bluff. On the contrary, I am going to explain to people why it is a gigantic bluff.”
Mr Salmond said the EU was continually growing and that a “pragmatic way” would be found in the case of Scotland.
No member state had suggested it would seek to block an independent Scotland from joining the EU, he said.
Alistair Darling, leader of the Better Together campaign, said Mr Salmond was “pretending last week never happened.”
He added: “It is now a simple fact that Scotland cannot keep the pound if we leave the UK. Alex Salmond has a responsibility to tell us what will replace the pound.
“Avoiding extra costs to business and not placing jobs at risk are powerful reasons why we should vote to remain in the UK and keep the pound.”
Councillor Barney Crockett, leader of Aberdeen City Council, said the UK would see the ‘George Tax’ as a much smaller liability than the risk of a shared currency.
He added: “The least of worries for businesses will be the cost of transactions.”
Mr Osborne last night described Mr Salmond’s speech as “empty”.
He added: “Detailed analysis and independent advice shows that what is best for Scotland is keeping the stable and durable currency union we have now. The only way to do that is to keep the UK together.”
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