Alex Massie Alex Massie

The Battle for Threadneedle Street

I thought it obvious that Mark Carney’s trip to Scotland yesterday was a bad day for Alex Salmond and the Scottish nationalists. Sure, the governor of the Bank of England said, a currency union between Scotland the the rump UK could happen and be made to work but it would be fraught with difficulty and sacrifice too. Do you really want to do that? How lucky do you feel? Carney, being a Canadian and therefore a man crippled by politeness, did not add “punk”.

In response the SNP were reduced to pushing a meaningless poll which found 70% of Britons favouring a currency union after independence. That is, 70% of the 97% of people who have not thought much about this or who know nothing about it favour the status quo. Perhaps that sounds harsh or insulting; it isn’t meant to be.

Even so, there are many reasons why a currency union should be desirable and why it would be sensible for governments in London and Edinburgh to agree to one. From a business perspective it is the least worst option available.

Nevertheless, many desirable things are never achieved. The nationalists argue that Treasury opposition is based on political calculation not economic self-interest. George Osborne or Ed Balls will change their tune if presented with the reality of Scottish independence. Well, they might.

But what if they do not? This is what I mean by suggesting Salmond is writing a cheque he cannot honour. It is not up to him. It will be a matter for the Westminster parliament. And that parliament may decline to give Salmond everything he wants.

It is easy to see what Scotland gains from a currency union. It is harder, despite nationalist assurances to the contrary, to see what the UK would gain.

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