Scottish nationalists suffered a blow this week as Britain’s three major political parties in Westminster ruled out allowing an independent Scotland to use the pound.

Currency union

In a rare display of unity over a two-day period, politicians of the ruling Conservative and Liberal Democrat parties spoke out, just seven months before the referendum on whether or not Scotland will remain in the UK, is set to take place.

“The Scottish Government says that if Scotland becomes independent there will be a currency union and Scotland will share the pound. People need to know that is not going to happen,” said Chancellor George Osborne in a speech in Edinburgh on Thursday.

“Sharing the pound is not in the interests of either the people or Scotland or the rest of the UK.” His comments came the morning after the Liberal Democrat Minister Danny Alexander also clarified his party’s position. “A currency union would create unacceptable risks for Scotland and the rest of the United Kingdom,” he said.

“To take that step and then give up control over interest rates, exchange rates, and freedom over tax and spending policy would leave an independent Scotland hugely exposed to economic shocks, but without any of the economic levels to manage a response.”

Supporting their case was analysis published by Treasury officials, which also strongly advocated against a currency union, pointing to a number of problems, including the impact that the Scottish Government’s uncertainty over whether or not to move to another currency in the future would have, the size of Scotland’s banking sector, and differences in fiscal priorities between Westminster and the Scottish Government. Labour, too, ruled out support for the Euro.

Shadow Chancellor Ed Balls insisted that a currency union would “repeat the mistakes” of the Euro Zone.

“The lessons of the euro crisis is that it could place unacceptable burdens on large countries and small countries,” he told The Independent . Last month, the Bank of England Governor Mark Carney warned there would be risks of a currency union, if an independent Scotland did not cede sovereignty over banking, taxation and spending.

The referendum will take place on September 18, 2014, giving the Scottish Government 18 months to prepare — if the answer is yes — for an ‘independence day” on March 24, 2016. Outlining its vision for an independent Scotland back in November, the Scottish National Party’s leader Alex Salmond insisted a currency union would be in the best interest of both the UK and Scotland.

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