First Minister challenged to set out currency transition

Scottish Liberal Democrat leader Willie Rennie has challenged First Minister Alex Salmond to spell out his transition argument for his independence currency plans.

Speaking ahead of a visit to a business in Edinburgh, Mr Rennie said:

"Alex Salmond is not being fair with people in Scotland.

"For months he has refused to set out his Plan B on currency.

"And in the days since his hollow performance on currency in the TV debate, he has sought to quietly build an exit strategy from his irreconcilable position.

"I don't think Alex Salmond's exit strategy offers voters much comfort. To exit from his Plan A and move to his Plan B, Alex Salmond has introduced his Plan Transition. It is a plan so cunning Baldrick himself would be jealous.

"He probably thought we didn't notice him slip in the new phrase. But it would difficult to miss the two glaring flaws in this new strategy.

"Firstly, a transition by its very definition is a temporary mode. It is not a stopping place.

"Secondly, if Alex Salmond proposes that an independent Scotland temporarily use the UK pound like Panama uses the US dollar as a transition plan, what is it a transition to? The Euro? A separate Scottish currency?

"Independence is forever. But Alex Salmond's currency plans now seem to come with an expiry date as short as six months.

"That informal arrangement could be even shorter given that Alex Salmond has dubbed it his Plan Transition.

"If the international markets do not believe your currency is permanent, they act to force the change even against your will.

"The international evidence is that the Salmond combination of a temporary plan and a vague destination will be catastrophic to the immediate prospects for Scotland and the people and businesses who live and work here.

"Let us remember the monetary union they tried when Czechoslovakia separated.

"The monetary union lasted there for just six weeks. In fact, they started to end it after three weeks.

"Czech and Slovak monetary union fell apart in little over a fortnight.

"Foreign banks stopped trading the currency.

"And the Czech central bank locked 4 tonnes of Slovakian gold in their vaults because of a billion pound dispute, even as they fell apart.

"That was because the international markets believed that the currency union would not stand the test of time and decided to act to force its end.

"The international markets did that before in 1992 when our interest rates went up to 15% as the speculators tried to wreck currency after currency in the Exchange Rate Mechanism.

"So for Alex Salmond to announce that his entire plans revolve around a temporary Sterling arrangement leading to an uncertain Plan B puts him fair and square in the role as the Baldrick of Scottish economics.

"Except he will not pay the price. It is the businesses with 270,000 people engaged in trade that will have problems first. Followed by anyone with a mortgage. The First Minister’s three pensions will remain unaffected.

"Wouldn’t it be better to have the option everyone wants: a monetary and fiscal union with the rest of the UK, under-pinned by the Bank of England. That is what we’ve got now."

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