There were risks in sending a posh English boy like George Osborne to Scotland to warn that it might be no doddle for an independent Scotland to continue using sterling as its currency. The move might yet backfire among thrawn Scots if the English try to put the frighteners on them. Like pointing out the supposed difficulties of Scotland continuing more or less automatically as a member of the EU, Osborne’s sally north was part of London’s growing challenge to the SNP tactic of lulling the Scottish people into independence as the most natural and inevitable thing in the world. However rather than stoke a backlash as it might well have done, Osborne’s warning is being interpreted as a sign of growing unionist confidence and part of an effective riposte to the Nats among otherwise divided parties. This comment by the Guardian’s Martin Kettle is on the money.
As English red rags waved in front of proud Scottish bulls go, George Osborne’s Glasgow speech was as provocative as they get. And with David Cameron having made his own trip north this month to celebrate Britain’s Trident nuclear weapons – historically unpopular in Scotland – it is hard to imagine two events better calculated to present Salmond with a tailor-made nationalist opportunity..
…both sides suspect, surely rightly as things stand, that Scots will vote no when the referendum comes
The most remarkable thing of all is a paradox: the calling of the independence referendum, far from acting as a springboard for a much more confident and assertive nationalism, seems to have become the catalyst for some significant and welcome rethinking about the nature of unionism.
Neither side in the sterling argument has made much of the Irish experience of 1922 when the new Free State kept sterling. This is the only article comparing the Free State’s situation then with Scotland’s today that I’ve been able to find. Of course the heirs of Griffith and Collins had other priorities after violent struggle and no obvious alternative. Yet in the split over the Treaty, the currency and the economy barely figured, or later in the tortuous debates sponsored by de Valera on achieving “ full” independence. Only the small parties on the left, like Sean McBride’s Clann na Poblachta made anything of it.
MacBride also argued for the “return of sterling assets” to Ireland-essentially a decoupling of the Irish pound from Pound sterling by selling British gilts and investing the money in domestic enterprise. Officials in the Irish Finance department, who had an excellent relationship with the British Treasury and thought a decoupling would isolate Ireland and discourage investment, resisted. The matter came to a head at the time of the 1949 devaluation of sterling. Despite two government meetings to discuss decoupling, it was decided to retain the sterling link – which remained until 1979 ( when the sterling link was broken as the Republic joined the European exchange rate mechanism and finally the euro in 1999).
As Dev’s grandson Eamon O Cuiv put it to me a few years ago: “only when we joined the EEC could we look Britain in the face as equals” Alex Salmond and the Nats will no doubt try to play an equally long game if they lose the 2014 referendum.