Scotland will need new currency if independent: British MPs

British MPs today warned Scotland that it will not be able to keep the pound sterling as a currency if it voted for independence from the UK in a crucial referendum in September.
The Committee for Scottish Affairs described the idea as a dead parrot in a report and asked the Scottish First Minister Alex Salmond to come up with a Plan B.
"The Scottish government tries to give the impression that a currency union is still a possibility. It is not. This parrot is dead," said Ian Davidson, chairman of the committee.
The report categorically stated: "If Scotland leaves the United Kingdom there will not be a currency union. Voters urgently need to be told what the Scottish government has as a Plan B."

Scotland is set for a crucial referendum on September 18 which will determine the fate of the UK.
The report released also dismissed Salmond's claim that UK Chancellor George Osborne and other UK MPs are bluffing by ruling out the proposal.

"No future Chancellor could perform an about-turn on a currency union after a Yes vote in September's referendum without destroying both their political and economy credibility," the committee concluded.
Salmond's ruling Scottish National Party wants to share the pound with the UK in a currency union after independence, keeping the Bank of England safety net.
But this has been ruled out by all the main parties at Westminster, the report said.

The committee supported the stance, saying that the single currency functions because of the close integration between countries. Any loosening of the fiscal ties between Scotland and the rest of the UK would make sharing the pound impossible, the report said.
"Despite the inherent risks involved, a new Scottish currency would give the Scottish Government the maximum economic leverage required to pursue a separate economic policy - the stated aim of separation," the report said.