Chancellor George Osborne Makes Case Against Scottish Independence

United Kingdom Not 'Wallowing In Nostalgia'

The chancellor has insisted there is still an economic case for Scotland to stay within the United Kingdom.

George Osborne entered the independence debate on Thursday during a visit to Glasgow, where he gave a speech to business leaders at the annual Confederation of British Industry (CBI) Scotland dinner.

He said there is more to Unionism than "wallowing in nostalgia".

Setting out his case for a No vote in late 2014, he accused Scotland's first minister Alex Salmond of failing to provide a credible answer to his plan for a shared sterling currency union.

"Today the advocates of independence argue that Britain's value to Scotland is spent, that union is no longer in Scotland's economic interests and that those who continue to believe in Britain are wallowing in nostalgia," said Mr Osborne.

"I want to take this argument head-on. I make no apology for sharing all of the instinctive emotional attachment to Scotland's place within the UK. Our shared history and culture, distinct yet intertwined identities, a whole greater than the sum of its individual parts.

"And I reject the idea that while Britain has a glorious history, it has little relevance in tackling the challenges and grasping the opportunities of the modern world."

The existing single currency union in the UK has supported three centuries of economic and social integration, he said.

He said the trouble in the eurozone is a warning of what can happen with a currency union without political union.

"That's why the eurozone are developing plans to control the fiscal positions of individual member states so that they can avoid the risks of contagion for all members of the union," he said.

"Greater political integration, because sharing a currency and perhaps a central bank means policies that are consistent not divergent. Members must be prepared to forgo individual interests and circumstances for the interests of the union as a whole.

"So it's difficult to argue for establishing a monetary union while pursuing fiscal and political separation.

"In a world in which a separate, independent Scotland wished to pursue divergent economic policies, what mechanism could there be for the Bank of England to set monetary policy, as it does now, to suit conditions in both Scotland and the rest of the UK?

"As chancellor of the Exchequer, I have seen no such credible mechanisms proposed by those advocating independence. I am not clear they exist.

"If the Scottish government cannot provide answers to these basic questions about Scotland's currency, then the Scottish people are entitled to ask this basic question in return: what path is the Scottish government leading them down?"

The comment echoes concerns raised by former chancellor Alistair Darling who heads the pro-Union Better Together campaign.

On the wider UK economy, Mr Osborne said there is no easy path to take.

"We in Britain have to confront our problems head-on, be honest about the scale of the challenge and be consistent in our determination to succeed," he said.

A spokesman for Scottish finance secretary John Swinney said: "Scotland needs no lessons from a Tory chancellor whose disastrous economic policies are threatening jobs and investment across this country. And it simply beggars belief that Mr Osborne can claim the economy is healing on the same day that the OECD has downgraded its forecasts and predicts the UK economy will shrink by 0.7% this year.

"The uncertainty being caused to Scottish businesses is through Mr Osborne's policies and his government's failure to invest in capital projects.

"The cast-iron position is that an independent Scotland will keep the pound, a position that Scottish Secretary Michael Moore has agreed with.

"And Scotland urgently needs the powers of an independent country to boost economic recovery and create jobs, and many of the leading job-creators in Scotland agree with us on that."

At the dinner CBI director-general John Cridland said the organisation is "not convinced of the business and economic case" for independence.

"The CBI has a collective view on independence and, I believe, a duty to express it," he said.

"CBI Scotland council is not convinced of the business and economic case for Scotland seceding from the union and judges that businesses - Scottish, English, British - would lose out from the fragmentation of our single market.

"We have two years to get this right, and get it right we must."

If people in Scotland vote to leave the UK, the CBI would "work with the mandate", but a Yes vote would bring "several more years of upheaval and negotiation", he argued.

Before You Go