SWINNEY ISSUES STERLING THREAT.

John Swinney, the man who sees himself as Scotland's 'Chancellor of the Exchequer' is in a real panic, so much so that he's now issuing threats against the UK government.

All 3 main UK political parties have made clear that, should the Scots vote for independence in September, they will not enter into a currency union with the newly independent nation. While they acknowledge that Scotland could continue to make use of sterling as its currency, there would be no formal agreement and the pound would continue to be managed from London as now. Swinney and his pals in the SNP don't like this and so are now threatening that no currency union would mean Scotland refusing to accept its share of the UK's national debt, currently estimated to be about £100bn.

Exactly what planet Swinney is living on is a bit of a mystery though it clearly isn't the same one inhabited by the rest of us. Why does he think that Scotland, having rejected its place in the United Kingdom, should be entitled to continue to enjoy the benefits of its old currency in a formal currency union ? Why does he think there is a link between using the currency and national debt ? Why does he think that the government of the rest of the UK doesn't have plenty of routes by which it could take back the £100bn if it chooses to ?

The SNP wants Scotland to be independent and yet is madly trying to reassure its troubled population that nothing will change if it achieves its goal EXCEPT that everything will be much better than now. Poppycock.

If an independent country does not control its own currency it has no financial freedom whatsoever. As a minor partner in a currency union it would have little power and would almost certainly have to submit its budget to the UK Treasury; in an informal arrangement it would have no control whatsoever over the value of the currency and exchange rates as well as interest rates, little control over tax rates and would be entirely at the mercy of the economy of the remaining, and much larger, part of the UK. It would not have its own 'central bank' and would not be able to borrow independently; it would be no more than a vassal state.

With all of these restrictions, why on earth does Swinney want to keep the pound ? The simple answer is that he has no choice as the only alternative for Scotland if it wants to be a member of the EU is the Euro. An independent Scotland would almost certainly have to apply to become a member of the EU and the rules of that egregious organisation require new members to adopt their benighted currency and all the restrictions that go with it. Swinney and his mates in the SNP see sterling as their way out, giving them a degree of bargaining power when it comes to EU membership.

For Scottish voters it's a case of 'the devil you know or the devil you don't'. Swinney, Salmond and the rest know that their people would shy away in their millions if the Euro was the currency of choice, so they've gone for the pound. Sadly for them, the people who represent the nations they want to reject don't like the idea one jot and have issued a resounding 'NO WAY !'. Whether any of this matters will become clear with September's vote, though any Scot with financial sense will surely say 'No' also.