Currency Economics of Independence Scotland's Economy

First Minister: No Currency Deal, no Debt Deal

Scotland’s First Minister speaking to the Vision for Scotland conference at Dynamic Earth on Wednesday August 6th explains why he will continue to press for and why we will get a currency union.

He discusses what other currency options are and why Westminster will accept the deal on offer.

This is because if there is no deal on currency there will be no deal on debt. A no debt option looks attractive to Scotland but we would rather have a deal that worked for our friends in the rest of the UK as well as for Scotland. Maintaining a common market and single currency is the solution that works best for all parties.

This video is a must watch for those that want to better understand the currency element of the independence debate. Note iPad and iPhones may require you to watch YouTube via an app;  link to video here



Business for Scotland explained the currency dimension of the debate over a year ago and very little has changed Euro, Pound Sterling or Scottish Pound?

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About the author

Gordon MacIntyre-Kemp

Gordon MacIntyre-Kemp is the Founder and Chief Executive of Business for Scotland. Before becoming CEO of Business for Scotland Gordon ran a business strategy and social media, sales & marketing consultancy.

With a degree in business, marketing and economics, Gordon has worked as an economic development planning professional, and in marketing roles specialising in pricing modelling and promotional evaluation for global companies (including P&G).

Gordon benefits (not suffers) from dyslexia, and is a proponent of the emerging New Economics School. Gordon contributes articles to Business for Scotland, The National and Believe in Scotland.


  • please assist with argument for countering latest BT scare story as follows:- banks-emergency-panic , this now being morphed into “investors and ordinary account holders will pull all their money out of scottish banks, there will be a run on the banks after a YES vote”

  • As a definite YES voter I was disappointed in Alex Salmond in the debate as the party that are telling us the only way Scotland will have a decent future is with independence he should have answered the questions re our currency and put Alistair Darling in his place and said an independent Scotlands currency will be the POUND end of I don’t need a plan B C D instead he left it looking as if Darlings point about how a child in primary learn country capital currency but not the people of Scotland

    • Undecided voter looking for some additional info thanks……ifwe use the pound then we give up the use of monetary policy to influence the economy as this will be controlled by Westminster, no control of interest rates, money supply, etc….given the devasting impact that a lack of monetary policy had with the economies of Greece, Spain, etc. during the finacial crisis, is this not a major issue??

      Also, surely a monetary union in effective leads to a political union… that not what we currently have?

      Grateful for any info, thanks.

  • If the SNP followed through on its threat not to take on any debt, then the continuing UK would not have to provide any assets. Separation is pretty simple, you share assets and liabilities and if you are not taking liabilities then you have no rights to any assets. So if the SNP were foolish enough to walk away from the debt, the remaining UK would get a windfall greater than the debt of the UK’s substantial assets. Continuing use of an institution and the protection of the rUK tax payer is not an asset and the Yes campaign have not provided any evidence to the contrary. As a fair amount of debt is due to bailing out Scottish banks for actions taken that were publicly backed by Alex Salmond, the rUK tax payers have a right to be concerned about having to do so again.

    Basic maths here, on your site you claim a windfall of £109 billion assets but are threatening to not take your £100 billion share of debt. This is hardly going to bankrupt the rUK as the numbers are almost the same.

    • The share of the debt is a population share as is the share of the assets. However a 10% reduction in GDP and a 10% increase in debt would leave the UK economy with a debt to GDP ratio that would would be damaging – add to this the delation in the value of the rUK £ anticipated by forecasters were Scotland to have its own currency and the huge balance of payments issue the rUK would have without Scottish Exports and you have a recipe for disaster for rUK if there is no currency union.

      If only economics were about simple maths.

    • Debt is not the only thing we have to bargain with.
      There is the hosting trident for 10 years till it can be removed, which it might not be in exchange for so much stuff.
      There is the supply of energy oil, gas, wind, wave. That is unless fracking provides all or they get a better deal from russia.
      Then theres that water pipeline too.
      Im sure there is more and we get things aswell, but i really cant think.
      As for assets Im not too sure but weve got the tax office, benefits, pensions, passport office already here and if english/american owned supermarkets want to leave then the buildings are already in surplus and still here and we know how to run them.
      Im sure it’s complex but as for scottish goods well the whole world is not getting whiskey from anywhere else, and no matter the cost it will be bought. I doubt england has sufficent agriculture land to produce what we provide, seafood well thats all here too. Textiles where else would they get supplied from?

      just saying its not all about the debt share, rUk doesn’t have all the cards and we do have sum trumps.
      As for debt and banks we need a peoples bank, Iceland get portrayed as baddies because they said no to bailing out banks, instead they bailed out the people.

      • I think you’re confusing the things government controls with things it does not. Those things are not a bargaining tool that’s just normal trade. If we can’t get those things from Scotland we will just get them from somewhere else and you’ll have to sell them somewhere else. How stupid would that be.

  • Assuming Westminster don’t U-turn on it and we have to look at plan B/C/D but are starting as an independent nation in surplus….would the euro really be such a terrible thing? Granted transaction costs might arise between us and rUK, however it would facilitate trade with other wealthy euro & Schengen nations. I’m not convinced Scotland/England trade would suffer too terribly, nor that the euro would be such a great risk for a country entering it in surplus. Healthy discussion welcomed!

    • Westminster will U-turn, to say no to a currency union would be so damaging to the rest of the UK economy that they don’t really have a choice. However you are right the worst that could happen to Scotland is that we would have a better deal than the one we have right now as maintaining a currency union with Westminster political control is probably the worst option of all. Lets call that plan XXX

    • On the BBC2 Scotland “question-time” discussion last night Danny Alexander and the Better Together campaign lead person made no impresssion whatsoever on the audience on the subject of currency, particularly in Danny’s own constituency! Utter failure to convince anyone attending that Westminster will not negotiate on this.

  • If there is no debt share doesnt that mean there will be no assets and no eu membership, no nato membership, even no date for independence agreed either?

  • I am sick hearing about deficit reduction and the need for ‘austerity’ for decades into the future. How everybody is in this together but the bankers, who will leave the country if they do not recieve fat bonus payments for doing what they are hired to do, and handsomely rewarded for doing anyway.

    Now call me simple but if we are having such terrible austerity because Britain is £1.3trillion in the red, and borrowing £121bn last year to keep afloat it makes me wonder where UK broad shoulders would be without Scotland’s contributions?
    Scottish GDP by GERS equates to about £145bn
    Scotland contributes £4bn a year to help service interest payments on UK National Debt @ £1.307Trillion.
    Also in the region of £1bn to the upkeep of the UK nuclear deterrent based 30miles upwind from Scotland principle population centres.
    Add to that mix our population share of ‘essential UK projects’ ie HS1&2 @ £54bn, London Crossrail 1&2 @ £27bn and the London Sewer Project @£4bn. Thus far £85bn spread over 10-20years
    My point is this: if this is UK austerity required because of a fiscal deficit of £121bn.
    What condition would we expect to face for a deficit in excess of £270bn?

    Bear in mind the low stock of gold bullion left in the Bank of England, and the exit of 90-95% of UK oil revenue to Scotland after independence.

    What might we also expect the City of London and the Markets make of such a position?
    Kinda scary proposition to have to face alone!

    Scotland wants a healthy English economy that can buy Scottish goods and services. That is why Scotland should retain a currency union in Sterling.

    We have no need for a Lender of Last Resort calling the shots on economic strategies in Scotland.

    Scottish inherited national debt is all but cancelled out by inherited UK Public Assets @ £1.26trillion, according to the UK NAO.
    No debt, no guarantor required for that debt, no Lender of Last Resort required.

    No objections possible against Currency Union and sharing Sterling, a fully tradable international currency.

    • Because Darling was to busy stopping him repeatedly by continuing to spout outright lies, which also reduced debate time on other issues as well.

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