The risk to the UK of sharing the pound with an independent Scotland would outweigh the benefits of cutting the UK national debt or preventing cross-border transaction costs, Labour leader Ed Miliband has said.
Scotland’s share of the UK debt would amount to about £120bn –about £5bn a year in repayments – but the Scottish Government has threatened to withhold its share if the UK does not agree to share the pound.
Scottish Finance Secretary John Swinney insisted that the UK’s cross-party refusal to consider a currency union “will crumble after a Yes vote” in the face of a higher UK debt, higher costs to UK businesses to trade with Scotland and a potential weakening of the pound due to the loss of the Scottish oil and whisky industries.
But Mr Miliband, the Labour MP for Doncaster North, said only 10 per cent of UK trade goes to Scotland and pointed out that the 40 per cent of UK trade that goes to Europe has not compelled Britain to join the euro.
Speaking after an address to the Scottish Chambers of Commerce in Glasgow, Mr Miliband said: “Forty per cent of the UK’s trade is with the euro area and 10 per cent of the rest of the UK’s trade is with Scotland.
“So, we’re not about to join the euro because it’s 40 per cent, so therefore you have got to make a judgment about whether the currency union makes sense or doesn’t make sense.
“Of course you want to avoid the transaction costs, which is one of the reasons we want the UK to stay together.
“But I’m afraid the cost of a currency union without political union, without a fiscal union, without banking union, are costs that will be too high for the UK.”