Selling England and Scotland by the pound (and down the river)

Dear Mr Cameron, Mr Miliband and Mr Clegg,

I am writing to you as an ordinary voter in England who has been following closely the debate on Scottish independence.  I am concerned that the decision made by your parties to rule out a currency union with an independent Scotland in advance of negotiations is not a wise decision for the continuing United Kingdom.  Neither am I convinced that this decision is one which is sustainable morally or in international law.

On the wisdom of ruling out a currency union now, I understand that a currency union could become quite problematic for us in a continuing United Kingdom if or when an independent Scotland takes a significantly different political and economic path.  As I understand it, there will be at least 2 years between the referendum and the official “birth” (or “re-birth”) of an independent Scotland.   Until then, Scotland will not be able to take a different path.  What I do not understand is how your parties can accurately predict now that Scotland will take such a different path the moment it achieves independence.  Even if it does start down that different path in 2016, it will take time for the divergence between our nations to become significant.   It will take many more years after 2016 for the integrated structures of the current UK Government to be separated out and during this time, the Scottish Government’s freedom to take a very different economic path will be limited.

The end of the currency union will give rise to new transaction costs for businesses and visitors to Scotland who come from the continuing UK.  On the other hand, the Scottish Government has shown every sign that it wants a currency union to work.  It therefore seems reasonable to me that a continuing UK Government should not judge too quickly the nature and the speed of the different path that an independent Scotland is taking or might take in the future. I am worried that it could be highly damaging to the UK economy to unilaterally end our existing currency union on the day an independent Scotland comes into being.  That day will be tremendously important politically, but it is hard to see how the choice of that particular day to end our currency union can be justified on economic grounds.

Even if the current UK Government and/or your parties felt under pressure to make a decision on currency union now, is your freedom to do so not constrained by the fact that, at the moment, the UK Government and your parties represent residents of Scotland?  I note that the UK Government has refused to consider its negotiating position with an independent Scotland on other issues like Trident precisely for this reason.  I feel there is an inconsistency here in your policy-making practice.

I do not see any need for the UK Government or any of your parties to make such a decision now, one way or the other.  Would it not be a more prudent approach to postpone making a decision on a currency union for at least a few years after independence?

In fact, would not making this decision now also create a hostage to fortune? I believe that it would suit us to review currency union policy in the light of negotiations with an independent Scotland and in the light also of the developing, international economic situation.  What I am proposing seems like a sensible approach but I have not yet seen it considered by your parties.

The other issue is the current UK Government’s legal basis for a unilateral rejection of a currency union.  I know that the current United Kingdom has been advised by distinguished academics that it will be the “continuator” state following Scottish independence and that an independent Scotland would have to start with a “clean slate” as a brand new country, breaking away from the UK.  I am aware that this position is an acceptable interpretation of international law. I understand that it is this legal interpretation that the UK Government relies upon when asserting that it has the exclusive right to retain total control over the pound and over any decision on a currency union with Scotland.

I am aware too that another respected, academic school of thought on the issue is that the continuing UK and an independent Scotland would be the two “successor” states to the current UK.   Both new states would be co-equal in legitimacy and co-equal in their inheritance of the international legal obligations of the current UK.   So when the Scottish Government states that the pound belongs as much to Scotland as to the rest of the UK, I understand that it is this school of thought they are relying upon.

I am also aware that these interpretations of international law are not capable of being arbitrated by any international court and so can do no more than inform political negotiations between countries and international institutions.

I am concerned about the possible consequences of the UK Government standing on principle and insisting that its legal interpretation is correct and must be followed through.  The current UK Government has rightly stated that it will work amicably with the government of an independent Scotland. However, by attempting to insist on its preferred interpretation of international law, the UK Government will create maximum inconvenience for an independent Scotland during independence negotiations. It will frustrate their plans to maintain a currency union and complicate their application for membership of the EU and numerous other international organisations.

Furthermore, this stance is already souring relations with the existing Scottish Government who are reacting by insisting that they have as much right as the rest of the UK to keep the pound.    If both sides remain entrenched following independence, we will be heading for a major diplomatic bust-up which would be damaging for our international reputation, create uncertainty in the international markets and potentially cause ongoing tensions between our countries for many years to come.

I believe that the UK Government simply does not need to adopt any fixed position on international law now on the issue of state succession.  It may need to do so if future negotiations with an independent Scotland stall, but we are not there yet.

In conclusion, I believe that the UK Government has adopted an unconstructive and rigid position on the law of state succession.  On this basis, your parties have gone on to rule out a future currency union with an independent Scotland when its right to do so is not clearly supported by an academic or political consensus.  Even if there was such a consensus, your parties have taken a premature decision to rule out a currency union, without any pressing economic reason to make such a decision now, one way or the other.

I support the UK Government’s position that it will have to act in the best interests of the continuing UK and not Scotland, following independence.  However, in numerous areas, our interests will not necessarily conflict.  Where they do or could conflict, we can do better than stand on principle and put our case like a barrack-room lawyer to a non-existent judge.  We can try to work things out together, in the best economic and political interests of both peoples.  Our shared history and our commitment to remain good friends and neighbours mean that we should do no less.

I hope that you will consider seriously the points I am making and I look forward to receiving your replies.

Yours faithfully



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