The gloves came off in the fight for Scotland’s future on Wednesday night as the Government was accused of “bullying” the Scottish people by ruling out a currency union with the rest of the UK if they vote for independence.
In a speech in Edinburgh on Thursday, George Osborne is expected to warn that an independent Scotland would not be able to join a formal currency union, saying: “I want Scotland to keep the pound and the economic security that it brings.”
Scottish National Party leaders warned that they would retaliate by refusing to pay Scotland’s share of UK debt if their plans for a “sterling zone” were blocked.
The SNP launched a pre-emptive attack on the Chancellor’s speech, predicting that his threat would backfire.
Nicola Sturgeon, the SNP Deputy First Minister, dismissed Mr Osborne’s move as a “bluff”, saying: “People won’t take kindly on the Westminster establishment ganging up to bully Scotland in the decision we’re being asked to take on the referendum.”
She said it would be “absurd” for UK politicians to reject a currency union, saying this stance would damage businesses south of the border and impact on UK debt levels.
Stewart Hosie, the SNP’s Treasury spokesman at Westminster, said: “We are perfectly happy to service and pay our share... but the discussions on the liabilities, including the national debt, go hand in glove with the assets, which includes the Bank of England and a currency union. George Osborne can’t have it both ways.”
He added: “This is pure politics and George Osborne has got it wrong. It’s bullying, it’s panic in the No campaign, it’s utterly bizarre and it will backfire.”
Last week Prime Minister David Cameron stressed the positive aspects of the union between Scotland and the rest of the UK. Mr Osborne’s intervention on Thursday will be seen as a warning to Scots about the negative impact of voting Yes in the independence referendum in September.
It comes as the No camp’s lead in the opinion polls narrows and there are growing jitters in the UK Government about the result.
In advance copies of the speech, Mr Osborne says he “hopes passionately that the people of Scotland – who make such an important contribution to life on these islands – choose to stay within our family of nations here in the UK.”
Mr Osborne will suggest that Scotland might not have survived the recent financial crisis on its own.
He is expected to say: “The UK works. In good times and also in bad. Together we have faced the worst economic and financial crisis since the Great Depression. Government debt sky-rocketed, hundreds of thousands of people lost their jobs, banks were bailed out, and as a nation we were made poorer.”
The Chancellor will add: “The UK economy is growing faster than any other advanced economy in Europe.
“Today Scotland is one of the most economically successful parts of the UK, with growth per head the same as the smaller independent European states the nationalists would like Scotland to join, but with far more stability and less volatility than them, thanks to being part of the wider UK.”
He will trumpet the creation of more than 100,000 new jobs north of the border in the past four years, and a 65,000 fall in unemployment.