Yesterday [18th December] the House of Lords’ Economic Affairs Committee, engaged in teasing out the economic realities of an independent Scotland, interviewed Scottish Secretary Michael Moore MP.
Mr Moore was asked about the position of the Bank of England as lender of last resort for a putative independent Scotland.
The Secretary of State’s response was: ‘The Bank of England as a lender of last resort is I think highly unlikely to be an acceptable position for the rest of the UK.’
He also intimated that a paper on Scottish independence to be produced by the Treasury early in 2013, is likely to take this position.
Following the Bank of England’s flat rejection of being in anything that could be described as ‘a dialogue’ with the Scottish Government on this issue, Mr Moore’s words cast additional doubt on independence campaign claim that the economic security for an independent Scotland will be guaranteed in this way.
More and more the emerging picture shows work not done by the Scottish Government on critical issues; substituted by no more than assertions of what they genuinely believe – but do not know and have not tested – to be possible.
While there will be a degree of playing politics in the Scottish Secretary’s remarks, the foundation for what he is saying underlines the fact that the provision of such economic security by the Bank of England would have to come at the cost of a handover of fiscal sovereignty to the Bank. They are never going to underwrite something whose policies and activities they cannot control.
The continuing uncertainty over this particular issue could hardly be more widely damaging to confidence in the electorate and in the vital business community, internal and external.