Michael Moore savaged by Unionist peers over EU row

Former Tory Scottish Secretary Lord Forsyth, an arch-critic of devolution and independence, suggested Scottish Finance Secretary John Swinney had a point when he criticised the UK Government for not exercising its exclusive power as the EU member state to talk to the EC.

Fellow Tory peer Lord Lawson said Scotland is "perfectly capable of being independent" and accused Mr Moore of letting the nation down badly by refusing to explore the full consequences of a yes vote.

Labour peer Baroness Kingsmill described Mr Moore's position as "quite astonishing".

But Mr Moore argued that there was no need to speak to the EC given the amount of information in the public domain already, including a letter to the committee by EC president Jose Manuel Barroso which suggested Scotland would have to reapply to the EU as a new member state.

Mr Swinney told the committee last week that there was no provision in EU treaties to support Mr Barroso's view, a position echoed by former European Court judge Sir David Edward yesterday.

Mr Moore said: "We have not directly gone to the Commission. We have not seen the need to do that.

"We have looked at the broad range of evidence that is in the public domain already, but it was helpful that in response to your inquiries as a committee that we have got that further confirmation (from Mr Barroso).

"I think John Swinney is fundamentally wrong."

Committee chairman Lord MacGregor said: "That actually means that if there is a yes vote and some of the terms of the negotiation into the EU are very onerous for the people and economy of Scotland, and some of the other issues related to the Bank of England and so on, there is a sort of blind vote in the referendum and then people will have to wake up to some of the consequences once it is negotiated."

Mr Moore added: "I'm not going to play down the uncertainties, and indeed it is the Scottish Government's unwillingness to acknowledge uncertainty that has hampered the debate."

Lord Forsyth said: "You said that you wanted the debate as informed as possible, but Mr Swinney said they had a difficulty in establishing what the position would be vis-a-vis having to apply for membership of Europe or whether they would be allowed to remain in Europe because the Commission will only talk to governments, and the British Government is not prepared to engage on this issue.

"I find it a bit puzzling how you can reconcile saying 'we're not prepared to talk to the Commission as a Government to ask what the consequences would be', with saying at the same time that we want to have 'a fully informed debate'.

"Does Mr Swinney not have a point there?"

Mr Moore said: "There will be elements of this which are, to put it mildly, inelegant in terms of how well-informed people can be at the time of that vote.

"But short of doing that pre-negotiation, which as the UK Government I don't think it's our place to do, I believe we cannot resolve some of those issues."

He added that "shadow negotiations" on the EU would be inappropriate amid all of the other uncertainties surrounding independence.

Mr Moore said he was not going to oppose independence with the "old" argument that Scotland is "too wee, too poor, too far away, and couldn't be independent".

"I think we can be independent," he said. "The question for me, and I think this is true of people across Scotland, is: would that be better for us? Would we be more secure? Would we have greater economic opportunities?

"It is my view, and the view of the Government, that the answer is no - we would be much better within the UK Government.

"We don't want to assert that, however."

He said he will work to iron out as many of the uncertainties surrounding independence as possible in the UK Government's under-construction Scotland Analysis Programme, but advised that the UK Government "will not pre-negotiate" the terms of independence.

Baroness Kingsmill said: "It is slightly irresponsible for the Government not to focus on what the economic consequences might be in advance of a referendum.

"I'm astonished by your remarks that there will be no negotiations, there will be no discussion, there will be no exploration of these economic consequences for the UK."

Mr Moore said: "I regret the uncertainty, but the reality is that we are not in a position where we can create the hypothetical circumstances to understand what the negotiations would be.

"We don't have a position in government that separates Scottish interests out from UK interests."

Former UK Chancellor of the Exchequer Lord Lawson suggested Mr Moore's position is "totally unsustainable".

"Leaving aside, for the sake of simplicity, the rest of the UK, I think you are letting down very badly the people of Scotland," he said.

"I agree with you entirely that Scotland is perfectly capable of being an independent nation.

"It's a very fine country. There are many independent countries in the world which have a lot less going for them than Scotland.

"How are the people of Scotland to judge this if you are not prepared to say in your judgment what the consequences would be?

"That seems to me a totally unsustainable position."

The Committee later heard from Sir John Gieve, former Deputy Governor of the Bank of England, who confirmed that an independent Scotland would be able to retain sterling as its currency, but said negotiations would be required over the role of the Bank of England in regulating that currency.

"You can have currencies that cross government and cross different territories," he said.

"Notably, the Republic of Ireland used their own currency tied to sterling for many years, so in principle that could happen.

"Having the Bank of England as their monetary authority and central bank goes a lot beyond that.

"There is the question of bank notes and the terms on which any notes were issued, but of course Scottish bank notes are already issued.

"There is the question of government accounts. Would the Bank of England still manage the top level of very high value accounts for the government?

"There is the question of clearing and settlement, and the open market operations, and whether Scottish banks would participate in those.

"There is the discount window, and the lender of last resort.

"There is a whole gradation of things that central banks do, and I guess there would have to be a negotiation over all of that list to decide which bits apply to Scotland."

He said retaining sterling in Scotland would also be convenient for British travellers who would not have to change currency at the border.

SNP MSP Annabelle Ewing said: "Scotland is capable of becoming independent and the UK Government is simply sticking its head in the sand.

"The Scottish Government is clear that officials could be discussing the steps to be taken in the event of a Yes vote now, so that the rest of the UK is as prepared as Scotland.

"Politicians will debate the issue all the way to referendum day, but the UK's refusal to consider a Yes vote is incredibly arrogant.

"It is time the UK Government paid attention and put in the work they should be doing.

"Instead of spending their time spreading smears about Scottish independence and trotting the globe talking Scotland down, they should be ensuring that the UK is prepared to follow through on the Edinburgh agreement and implement a positive decision by the people of Scotland."