Currency union is not an option if Scotland votes to go it alone says Commons chairman

Ian Davidson, chairman of the Scottish Affairs Committee at the House of Commons, dismissed First Minister Alex Salmond’s plan for an independent Scotland to enter into a formal deal to continue using the pound.

The Labour MP said: “The Scottish government tries to give the impression that a currency union is still a possibility. It is not. This parrot is dead.”

He was speaking as the committee issued a report urging the Scottish Government to publish its “Plan B” for the key issue as a matter of urgency.

“If Scotland leaves the United Kingdom there will not be a currency union,” the committee report stated.

“Voters urgently need to be told what the Scottish Government has as a Plan B.”

But a spokesman for the First Minister branded the report “lame”, and insisted the pound is “as much Scotland’s as it is England, Wales and Northern Ireland’s”.

In their report, the MPs said Chancellor George Osborne, Labour shadow chancellor Ed Balls and Liberal Democrat Chief Secretary to the Treasury Danny Alexander had all been “unequivocal” when they ruled out a currency union.

“No present or future chancellor or government could depart from this policy without totally destroying their credibility,” the report added.

The MPs warned ending the existing arrangements would have “far-reaching consequences throughout Scotland”, particularly for the financial services industry, which is a key part of Scotland’s economy.

“The Scottish government must move quickly to provide information as to how it intends to protect the thousands of jobs dependent upon this vital part of the Scottish economy,” they insisted.

The MPs added a warning: “We have already seen evidence that significant Scottish financial services companies are preparing to relocate their headquarters, with the consequent effect on Scottish jobs and the Scottish economy, in the event of separation.”