THE Treasury was last night at the centre of a growing row over political bias, after admitting it had no record of when its most senior civil servant first advised the Chancellor against a currency union with an independent Scotland.
The inability of permanent secretary Sir Nicholas Macpherson to give a precise date is fuelling claims that Westminster's bombshell rejection of a currency union was cooked up to help the No campaign in the referendum.
The SNP said it was extraordinary that such a momentous decision had left no paper trail, and said it suggested the Treasury advice was little more than a dodgy campaign tactic.
In a formal memo dated February 11, Macpherson strongly advised George Osborne against a deal to share the pound on the basis that it would mirror the eurozone and prove unstable.
The confidential advice would normally have been kept secret for 30 years, but in a move Osborne himself described as "exceptional", it was made public just 48 hours later to help back up the Chancellor's rejection of a currency union on February 13.
Such high-level advice would typically crystallise after weeks or months of detailed discussion and research by Whitehall officials.
However, the Macpherson memo, which was seen as a huge boon to the No campaign, was later trashed by a leading independent economist as deeply flawed and based on loose assumptions.
Now, in response to a Freedom of Information request, the Treasury says it has no record of when Macpherson first warned Osborne against a currency union before the February 11 memo, raising further questions about its credibility.
It was reported last week that Westminster's refusal to let Scotland share the pound was taken on the advice of former Labour chancellor Alistair Darling, the chairman of the pro-Union Better Together campaign.
Until Osborne ruled out a deal on February 13, the official Treasury position was that such an arrangement was very unlikely.
Osborne's harder line, repeated by his Labour and LibDem counterparts, was seen as a body blow to the Yes campaign and to Alex Salmond, who had promised a formal deal after a Yes vote. The First Minister claimed the Unionist parties were bluffing, but all three insisted a currency union was impossible.
However, a newspaper report quoted an unnamed Coalition minister saying a formal currency union was "of course" possible, perhaps in return for the UK keeping Trident at Faslane. "Everything would change in the negotiations if there were a Yes vote," the minister reportedly said.
The same story contained the explosive claim that Darling and Downing Street's Scotland adviser, Andrew Dunlop, had shaped the Treasury hardline to boost Better Together's fortunes.
The Treasury confirmed in 2012 that Macpherson and Darling "meet socially from time to time".
UK ministers have repeatedly cited the three-page Macpherson memo as proof they are not bluffing over the currency, saying they could not go against such strong Treasury guidance.
But asked when Macpherson first warned against currency union before February 11, either in writing or verbally, the Treasury didn't know.
It said: "There is no record of the date when Sir Nicholas Macpherson, Permanent Secretary to the Treasury, first set out his advice to the Chancellor or other Treasury ministers regarding the currency union between an independent Scotland and the rest of the UK."
It went on: "To be helpful [we] can advise that the Permanent Secretary has for some time held the views expressed in his written advice of the 11 February.
"He recalls having expressed it verbally on several occasions prior to the formal written advice which was subsequently published."
Macpherson's memo was later dissected by Professor Leslie Young, of Cheung Kong School of Business in Beijing, who said it was flawed by loose analysis and inconsistent assumptions.
The SNP's Kenny Gibson said: "Westminster's currency bluff has completely crumbled. This FoI suggests the Treasury position was engineered externally, as there is no paper trail of how or when it was arrived at.
"Given the lack of documentation around Sir Nick's position, it is impossible to claim that ruling out sharing the pound was ever anything more than an ill-advised campaign tactic cooked up by Alistair Darling, as has been reported.
"Nothing the No campaign says on currency has a shred of credibility any more."
A Treasury spokesman dismissed the SNP's accusations as complete nonsense.
He said: "The Permanent Secretary and the Chancellor have a very close working relationship, as you would expect, and they talk about a range of issues all the time.
"This is just a distraction from the main issue, which is what currency would an independent Scotland use.
"That's what the Scottish Government should be spending their time and energies on, not trying to rake up a decision that has already been made."
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