Vote for independence if you want – but you'll lose the pound, says George Osborne

Chancellor asserts that Scotland would suffer from joining the euro and struggle to stand alone

George Osborne last night fired the opening shots of the campaign against Scottish independence, warning that Scotland would risk a euro-style debt crisis if it left the United Kingdom.

The Chancellor also claimed that Scotland standing alone would be unable to withstand a second financial shock and would deter foreign investors.

He spoke out as Downing Street signalled its belief that Scotland would have to accept its share of the toxic assets of the Royal Bank of Scotland following its £46bn bailout by the UK taxpayer.

The Coalition Government believes the SNP administration headed by Alex Salmond would be vulnerable to a challenge over the practicalities of how an independent Scotland would operate – a stance shared by Labour leaders. Pro-Union politicians are now preparing to focus the debate on four main questions – what currency would operate north of the border, what proportion of the UK's debts Scotland would have to assume, the future of the armed forces and whether border controls would have to be introduced.

Mr Osborne raised the spectre of an independent Scotland joining the single currency when it is in deep crisis. He told ITV News: "Alex Salmond has said Scotland should join the euro... That is not the currency I'd be wanting to join at a time like this."

He added: "I don't think Scotland would be as prosperous as it would be as part of the UK. I think there are businesses that are nervous about investing in Scotland when they don't know about its constitutional future."

Mr Osborne suggested an independent Scotland would have struggled to cope with the financial crisis of 2008. He said: "If... you ask yourself 'would Scotland alone have been able to bail out the Royal Bank of Scotland or Halifax Bank of Scotland'? You ask these questions and you begin to see actually Scotland is better off in terms of jobs and prosperity being part of the UK and, by the way, the rest of the UK is better off with Scotland as well."

David Cameron's spokesman indicated that an independent Scotland would have to accept a share in the RBS toxic assets."The RBS debt is part of the national debt. There would clearly be a discussion about how the national debt is carved up," he said. Mr Salmond has been reluctant to accept a share of the RBS debt, which he said was the responsibility of the "London Treasury".

The central thrust of the argument against a Yes vote emerged as Mr Salmond repeated his insistence that an independence referendum will be held in autumn 2014 – and not have its terms dictated by London. He told the Scottish Parliament: "The people of Scotland spoke in the election and their voice was very clear indeed."

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Web Developer - Junior / Middleweight

Negotiable: Recruitment Genius: One of the South East's fastest growing full s...

Guru Careers: Marketing Manager / Marketing Communications Manager

£35-40k (DOE) + Benefits: Guru Careers: We are seeking a Marketing Communicati...

Recruitment Genius: Commercial Engineer

£30000 - £32000 per annum: Recruitment Genius: Estimating, preparation of tech...

Recruitment Genius: IT Support Technician

£14000 - £17000 per annum: Recruitment Genius: You will work as part of a smal...

Day In a Page

Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor
The ZX Spectrum has been crowd-funded back into play - with some 21st-century tweaks

The ZX Spectrum is back

The ZX Spectrum was the original - and for some players, still the best. David Crookes meets the fans who've kept the games' flames lit
Grace of Monaco film panned: even the screenwriter pours scorn on biopic starring Nicole Kidman

Even the screenwriter pours scorn on Grace of Monaco biopic

The critics had a field day after last year's premiere, but the savaging goes on
Menstrual Hygiene Day: The strange ideas people used to believe about periods

Menstrual Hygiene Day: The strange ideas people once had about periods

If one was missed, vomiting blood was seen as a viable alternative
The best work perks: From free travel cards to making dreams come true (really)

The quirks of work perks

From free travel cards to making dreams come true (really)
Is bridge the latest twee pastime to get hip?

Is bridge becoming hip?

The number of young players has trebled in the past year. Gillian Orr discovers if this old game has new tricks
Long author-lists on research papers are threatening the academic work system

The rise of 'hyperauthorship'

Now that academic papers are written by thousands (yes, thousands) of contributors, it's getting hard to tell workers from shirkers
The rise of Lego Clubs: How toys are helping children struggling with social interaction to build better relationships

The rise of Lego Clubs

How toys are helping children struggling with social interaction to build better relationships
5 best running glasses

On your marks: 5 best running glasses

Whether you’re pounding pavements, parks or hill passes, keep your eyes protected in all weathers
Joe Root: 'Ben Stokes gives everything – he’s rubbing off on us all'

'Ben Stokes gives everything – he’s rubbing off on us all'

Joe Root says the England dressing room is a happy place again – and Stokes is the catalyst
Raif Badawi: Wife pleads for fresh EU help as Saudi blogger's health worsens

Please save my husband

As the health of blogger Raif Badawi worsens in prison, his wife urges EU governments to put pressure on the Saudi Arabian royal family to allow her husband to join his family in Canada