Tuesday, 26 August 2014

Confident no more?

First Minister's economic advisers continued to discuss currency Plan Bs months after Salmond declared Unionist veto on pound was "bluff", new minutes show

Unnoticed amid the recent rows over a potential currency "Plan B" was the publication last week of the latest minutes from Alex Salmond's Fiscal Commission Working Group (FCWG).

These date from 26 May 2014, but are nevertheless intriguing.

They show that, long after the First Minister had dismissed the Unionist threat to veto a currency union as mere bluff and bluster, his advisers remained busy discussing alternatives.

The minutes state (my emphasis in bold):

The Working Group discussed and reviewed the evidence underpinning their recommendations for a formal monetary union in their First Report.
Following on from their last meeting, there was a continued discussion of currency options in the context of the stated position of UK Ministers and the advice of HMT.

The Working Group also considered the economic assessment of currency unions set out by the Governor of the Bank of  England.

Members discussed the options available to Scotland post-independence and the importance of a stable transition.
The opinion of the Working Group remains that retaining Sterling as part of a formal monetary union is the best option for both the UK and Scotland.

The reference to "transition" was pounced on by Better Together when Salmond used the same phrase last week. Transition to what? they asked.

May's meeting seems to differ from the one which preceeded it on 6 March. 

Back in March, three weeks after George Osborne came to Edinburgh to announce his veto plan, the minutes recorded a confidence that it simply wouldn't happen.

They said: 

Members discussed the currency options outlined in the first report given recent developments and concluded that their economic assessment and central recommendation still held. 
They also discussed the other viable currency and monetary models available for Scotland post-independence.
Members emphasised how they believe that it would be in the interests of the rest of the UK for Scotland to retain stability as part of a formal monetary union. 
In the event of a vote for independence, agreements will be reached which are in the best interests of both Scotland and the rest of the UK. 
Other currency options would be less advantageous for the rest of the UK but viable for Scotland and Members concluded that they are confident that this will ensure an agreement on a shared currency.
As part of their discussions the Working Group covered the potential role of a Scottish Monetary Institute in a formal monetary union. 

But there was no reference to continued confidence in May's minutes, just a repeat of the FCWG's position that a formal currency union would be the best option.

("The opinion of the Working Group remains that retaining Sterling as part of a formal monetary union is the best option for both the UK and Scotland.")

Then again, if they were just as confident, why would they still be discussing Plan Bs?