Scottish First Minister Alex Salmond defended his plan for an independent Scotland to keep the pound and dismissed U.K. opposition to sharing the currency as campaign tactics ahead of a vote on the country’s future.
Speaking in an interview with Bloomberg Television yesterday on the eve of the Commonwealth Games in Glasgow, the Scottish National Party leader repeated that the currency belongs to Scotland just as much as the rest of the U.K. Salmond has said an independent Scotland would walk away from its 130 billion-pound ($222 billion) share of U.K. debt should Chancellor of the Exchequer George Osborne stick with his plan to deny the new state a currency union.
“We’re keeping sterling,” Salmond said. “Why talk about plans B, C, D, E and F when plan A is the best proposition?”
With less than two months to go before the Sept. 18 referendum on independence, the pound remains a key area of contention along with Scotland’s membership of the European Union, pensions and social security spending.
Opinion polls show the No vote will prevail, yet the independence campaign has been narrowing the gap.
A survey published last week by TNS put the deficit at nine percentage points, down more than half since the company started monthly canvassing in September. Support for staying in the U.K. fell one point to 41 percent while backing for independence gained two points to 32 percent.
“People of Scotland know full well we’ll keep sterling because it’s in the best interests of Scotland and the best interests of the rest of the United Kingdom,” Salmond said in the interview. “We’re very happy to take a share of the liabilities but of course we’re equally entitled to a proper share of the assets.”
Currency markets have so far proved immune to the risk of the 307-year-old union breaking up. The volatility of the sterling-dollar exchange rate reached 4.96 percent last month, its lowest in seven years, and last week the pound rose to $1.7192, the highest since 2008. It slipped 0.1 percent today to $1.7042.
Some banks predict sterling will experience more disruption in the coming months. The pound may drop as much as 10 percent compared with the currencies of the U.K.’s main trading partners in the event that Scotland votes to leave, Morgan Stanley said last week.
Salmond, who came from behind to win the first ever outright majority in the Scottish Parliament in 2011, said his Edinburgh-based government is pausing for the sporting event in Glasgow, which was formerly known as the British Empire Games.
“We’re concentrating on the games and there will be plenty of time for campaigning when the games are over,” Salmond said.