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Scotland Must Ditch Pound If Independence Is Gained

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Seven months remain between now and referendum day, when Scots will be asked ‘should Scotland be an independent country?’. Whilst the No campaign – or ‘better together’, a cross-party alliance between Conservatives, Labour, and the Liberal Democrats – have the upper hand in most polling data, the sizeable number of Scots who are ‘don’t knows’ ensures that the result of the referendum, and the future of the United Kingdom, is all to play for.

The issue of currency has been a key battleground between the two sides of the campaign. Before the collapse of the Eurozone, the Scottish National Party (SNP) argued that an independent Scotland – like Ireland – would join the European common currency. With that option now politically dead in the water, the SNP have since argued that the pound sterling could be retained in a UK currency union.

The response from Westminster and from the No campaign was critical, pointing to the difficulties around interest rates, which would still be set by the Bank of England. Yet if reticent criticism marked the initial response, this week has seen a dramatic turning point on the issue. George Osbourne, the Conservative UK Chancellor, today told Scots that he is categorically ruling out a shared currency union with an independent Scotland. In other words, Scotland has been told that it cannot keep the pound if a ‘yes’ vote is returned in September.

An incumbent Conservative minister issuing a threat of this nature to the Scottish electorate would appear to be an own-goal of epic proportions from the No campaign. Yet what has made this development even more significant is that both Labour and the Liberal Democrats have fallen in line to support Westminster’s refutation of a shared pound. ‘I don’t think it’s right for us to tell Scotland what they must do,’ stated Labour’s Ed Balls, ‘but I don’t see how you could have a negotiation about a Scottish separate country keeping the pound’.

For the key demographic in the referendum campaign, the ‘don’t knows’, this holds two potential political outcomes. The first is an issue of realpolitik – if Alex Salmond’s SNP cannot show a credible ‘plan B’ with regards to currency plans post-yes, the confident managerial aura of the yes campaign, so cooly laid out in their White Paper, seems all of a sudden on a proverbial shoogly peg. Doubt could seep in amongst the ‘don’t knows’ if the SNP decide to call Westminster’s bluff, and polling data could tip decisively in the favour of No.

Another potential outcome also centres around the issue of doubt, though is much less favourable for the No campaign. There is a very real possibility that this cross-party announcement will play into the hands if the depiction of ‘better together’ as ‘project fear’. There is already a palpable sense of alienation amongst the ‘don’t knows’, and for the Westminster political elite to join forces and preemptively rule out elements of what many consider as an issue for post-referendum negotiation, could entrench that sense of alienation.

The determining issue amongst the ‘don’t knows’ is whether the chagrin felt at being told what they can and cannot do, outweighs pragmatic doubt over what is and what is not possible. The debate on currency could yet develop, particularly if the SNP can offer an alternative vision for money in post-yes Scotland. What is certain is that a No lead in the polls belies the unpredictability of the referendum outcome, thanks to that key demographic, unrepresented in official campaign organisations: the ‘don’t knows’.

Image courtesy of Wikimedia Commons

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