Blocking a Currency Union would cost “Hundreds of Millions”

Last week Labour leader Ed Miliband aligned his party with the Tories and Lib Dems in voicing his commitment to block a currency union in the event of a YES vote. Alongside this, Ed Milliband admitted that the absence of a formal currency union would cost “hundreds of millions” in cross-border transactions.

Something that struck me while watching the Salmond / Darling debate last week was the difficulties facing Better Together in “cleaning up their image”. There seems to be two sides to Better Together: wild, speculative fear mongering, misinformation, and problem highlighting; and damage limitation for their image. A major problem facing Better Together is that they seem totally incapable of putting a positive swing on the negative “realism” of the NO camp. “I am a proud Scot BUT…”

A good example of this was the juxtaposition between Darling arguing that he was proud to be “part of something bigger”, happy to enjoy “the best of both worlds” and his claim that were these “two separate countries” there would unequivocally be no cooperation and no currency union. How do they stop this sounding like a bitter and uncooperative “you don’t get the pound because you’re not British”? Furthermore, in light of Milliband’s admission – which we knew all along – about the massive impact on UK trade that the absence of a formal currency union would precipitate, how do they swing this to not seem like they are willing to damage themselves on principle rather than pragmatically co-operate and respect the sovereignty of the Scottish people?

The Better Together campaign’s insistence that there will be no currency union is an effective tactic when employed against the Yes camp. However, in the event of a yes vote they are going to be forced to either embarrassingly backtrack, or stubbornly create an economic black hole that will have a negative effect – to the tune of “hundreds of millions” on UK business and trade. In this instance it will be interesting to see how the remaining Westminster voters – living under austerity – would respond to a government policy that is costing rather than saving hundreds of millions. This is a gamble for the Better Together campaign. If it pays off and circumvents a YES vote they are laughing. If, however, a Yes vote happens in spite of their bluff, Better Together are going to be in a very difficult position.

Salmond and the YES camp have a plan B: use the pound without a currency union. They have a plan C: the Euro. And they have a plan D: a new Scottish currency. Every one of these would need to be negotiated before being implemented – but so would the Plan A!

Better Together, on the other hand, seem to only have a Plan A.