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Scottish independence: Danny Alexander insists currency union refusal 'is final'

media captionDanny Alexander says "There will not be a currency union", if Scotland votes for independence

The cross-party decision to rule out a monetary union if Scotland became independent is final, the chief secretary to the Treasury has said.

Danny Alexander insisted the UK government was not going to change its mind on the issue.

Scottish ministers have dismissed the ruling out of a currency union by the main Westminster parties as a bluff.

Scottish Finance Secretary John Swinney said UK ministers were arguing to take responsibility for all UK debt.

Mr Alexander, along with UK Chancellor George Osborne and Labour shadow chancellor Ed Balls, have said they could not support a formal currency union between Scotland and the rest of the UK in the event of a "Yes" vote in the 18 September referendum.

media captionScottish finance secretary John Swinney says the economic case for a currency union is clear

The chief secretary to the Treasury used a speech to representatives of the pensions industry to again call on the Scottish government to come up with a currency Plan B, insisting his position was not a campaign tactic.

'John McEnroe defence'

Mr Alexander told the National Association of Pension Funds conference: "I've seen some people suggest we are not serious about refusing a currency union.

"Let's call this the John McEnroe defence. Except in this instance it's not just one person they're shouting at, but three.

"And our decision - taken in the best interests of Scotland and the rest of the UK - is final.

image copyrightPA
image captionA row over continued use of the pound in an independent Scotland has become a key issue in the referendum debate

"No ifs, no buts. No matter how much of a racket they make, it isn't going to change."

Mr Alexander's speech came as Scottish First Minister Alex Salmond chaired the latest meeting of his council of economic advisers.

Meanwhile, Mr Swinney told the BBC's Good Morning Scotland programme there "would have to be a negotiation" over a currency union under independence, but argued the Bank of England had set out that such an arrangement was possible.

Alternative option

Asked what would happen if the Scottish government "lost" such a negotiation, he added: "If the UK government sustains its current line of argument, the line of argument pursued by George Osborne, then what would happen is the UK would be assuming all of the responsibility for the debt of the UK.

"An independent Scotland wouldn't be saddled with the proportionate share of debt that we have freely accepted that we would have to take on.

"The UK government would be walking in to assuming all of the debt, and that is another compelling reason why the circumstances that I've set out, of the rest of the UK agreeing to a currency union zone with an independent Scotland, is a strong and credible proposition."

Asked which alternative currency option an independent Scotland would pursue, he said: "The point I'm making about debt is that it is so unlikely that George Osborne is going to voluntarily absolve the people of Scotland of over £100bn worth of debt, that George Osborne - or whoever is the chancellor after the 2015 election - will be agreeing to a currency zone with an independent Scotland."

image copyrightPA
image captionScottish Finance Secretary John Swinney said the Bank of England had made clear a post-independence shared currency was possible

Earlier this week, the Scottish government's fiscal commission working group, chaired by economist Crawford Beveridge, reiterated its view that a formal currency union was the best option for an independent Scotland, saying it had "clear advantages for the rest of the UK".

The chancellor's stance that a such an arrangement would not be in the best interests of the rest of the UK was backed by the Treasury's most senior civil servant, Sir Nicholas Macpherson, who said a currency union would be "fraught with difficulty".

Meanwhile, investment and savings business Alliance Trust has become the latest company to outline its contingency planning for Scottish independence.

It announced the setting-up of additional companies in England as a result of uncertainty surrounding the independence referendum.

The 125-year-old Dundee-based business said it was taking the precaution in order to protect its customers regardless of the outcome in September.

And in another development, the boss of insurance giant Aviva said independence was not an issue for his company to focus on.

Chief executive Mark Wilson told Sky News it was a matter for the Scottish people.

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  • Scottish independence

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