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Independent Scotland would have to leave pound: UK's Osborne

Chancellor of the Exchequer George Osborne says Scotland would have to leave the pound if it votes for independence. 

EDINBURGH: British finance minister George Osborne warned on Thursday that Scotland would have to leave the pound if it voted to become independent.

Osborne said there was "no legal reason" why the rest of the United Kingdom would have to share the pound with Scotland if its people opt to break away in a referendum on September 18.

Backing up Osborne's speech, Britain's three main political parties joined forces to say that they would not let an independent Scotland retain the pound.

The Scottish government wants Scotland to keep sterling and stay in a currency union with Britain in the event of independence.

But Osborne told an audience in the Scottish capital Edinburgh that it would "not work" and was "not going to happen".

"If Scotland walks away from the UK, it walks away from the UK pound," he said.

Scottish First Minister Alex Salmond branded it a "concerted bid by a Tory-led Westminster establishment to bully and intimidate".

"People in Scotland will not be fooled by the bluff, bluster and posturing" of the three parties, Salmond said.

In the British government's strongest intervention in the independence debate so far, Osborne said the pound was "one of the oldest and most successful currencies in the world".

He noted that the Scottish economy was growing faster than those of England, Wales and Northern Ireland.

"These hard-fought gains could be easily lost," Osborne said.

"And nothing could be more damaging to economic security here in Scotland than dividing our United Kingdom.

"I want Scotland to keep the pound and the economic security that it brings," he added.

Prime Minister David Cameron took a softer tone in a speech last week, urging all parts of the United Kingdom to persuade their Scottish friends and family to vote against independence.

'Angry party to a messy divorce'

Salmond's Scottish National Party (SNP) claims an independent Scotland would have the right to retain the pound.

But Osborne, the Chancellor of the Exchequer, said: "There's no legal reason why the rest of the UK would need to share its currency with Scotland."

Osborne said the SNP had offered "nothing more than confusion, wild assertion and empty threats".

He dismissed Salmond's warning that an independent Scotland would refuse to accept its fair share of national debt if the United Kingdom refuses to share the pound.

"That's like saying: because my neighbour won't agree to my unreasonable demands, I'm going to burn my own house down in protest," Osborne said.

He said: "They are like the angry party to a messy divorce. But the pound isn't an asset to be divided up between two countries after a break-up as if it were a CD collection."

But Salmond hit back, saying he maintained that a shared sterling area would be "overwhelmingly" in the rest of the UK's interest in the event of a 'yes' vote.

And he claimed "the stance of any UK government will be very different the day after a 'yes' vote to the campaign rhetoric we are hearing now".

Osborne repeatedly cited Bank of England Governor Mark Carney's comments last month that an independent Scotland would have to cede some sovereignty if it wanted currency union, or risk the problems shown by the eurozone.

Osborne later tweeted: "I couldn't recommend a currency union with a separate Scotland; I don't think any other Chancellor could either."

He said he was taking the "exceptional" step of publishing legal advice to the government from the Permanent Secretary to the Treasury, the most senior civil servant in the finance ministry, on the possibility of Scotland retaining the pound.

The advice says: "I would advise you against entering into a currency union with an independent Scotland.

"There is no evidence that adequate proposals or policy changes to enable the formation of a currency union could be devised, agreed and implemented by both governments in the foreseeable future."

The latest opinion poll in Scotland found 34 per cent in favour of independence and 52 per cent against. Twelve per cent were undecided and two per cent said they would not vote.

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