Darling condemns SNP’S currency plan
● Former Chancellor and economics expert warn that savings would suffer
SNP plans for a separate Scottish currency have come under fire from former Chancellor Lord Darling, who said that Scots’ savings would be hit and costs for businesses would increase.
Lord Darling, who headed the pro-union Better Togeth- er campaign during the 2014 independence campaign, hit out after the SNP confirmed it would seek to change policy at its forthcoming party conference to pursue a separate Scottish currency after independence.
This would follow a transitional period in which would the pound would be retained.
“A new currency would be the new kid on the block,” Lord Darling told the Sunday Times.
“So you have to persuade Scots who have their mortgages, investments, pensions and other savings in sterling that their money will be safe in an untried currency.
“Meanwhile the harsh fact remains that most of Scotland’s trade is with England.
“You will have a transactional cost for trading with England with a different currency, so you are simply adding to the expense of doing business and that’s not good for your economy either.”
The SNP’S commitment to rejoining the European Union would also mean signing up to the euro, Lord Darling said.
He added: “Just look at the costs involved in transferring from sterling to a Scottish currency and then from a Scottish currency to the euro in, say, five years. It’s simply not practical.”
And economics expert Professor Ronald Macdonald, from Glasgow University, said an independent Scotland would not have the reserves to attach its new currency to the British pound and would suffer a “floating exchange rate”.
He warned: “Anything denominated in the new Scots pound, say, would be worth less in value than before and quite possibly a lot less. So pensions would be a good example of that.
“Furthermore, since we are a net importer from the rest of the UK and the rest of the world, prices of these goods would rise and inflation would be greater, so there would be a double whammy of financial assets worth less and spending power of the pensions would be diminished.”
The SNP insists that joining the EU, despite the commitment to the euro, would not necessarily mean adopting the single currency.
The party points to Sweden, which still has the krona 25 years after joining the EU.
Ian Blackford, the SNP leader at Westminster, accused Lord Darling of the “same old scaremongering”.
He added: “There is no risk to pensioners, mortgage holders or anyone holding sterling assets or liabilities.
“We will be keeping the pound as such times as our six key tests are satisfied for our own currency, which will be pegged to the pound sterling.
“In such a scenario there is no fiscal transaction costs; it will be a one-to-one relationship, one pound sterling to a Scottish pound.”