Lamont: Salmond wants 'divorce' while keeping joint bank account

After Chancellor George Osborne said earlier this week that it was "unlikely'' the rest of the UK would agree to a such a deal, the First Minister came under fire for the proposals at Holyrood today.

Both Labour and the Tories challenged him on the key issue at First Minister's Questions in the Scottish Parliament.

Ms Lamont said: "The currency we have is a most basic question and it is astonishing the First Minister has been unable to answer it.

"What the First Minister is saying is he wants a divorce but to keep the joint bank account."

But Mr Salmond insisted it would be "overwhelmingly" in the interests of the rest of the UK to have a formal currency union with an independent Scotland.

He argued the "most substantial" reason for that was there were £50 billion worth of Scottish resources "which bankroll the sterling area".

He asked: "What on earth would happen to sterling if that were outside the sterling area?"

For that reason, he argued, a currency union was in the "obvious economic self interest, the overwhelming self interest of the United Kingdom".

During a visit to Glasgow on Tuesday, Mr Osborne suggested the formal currency union favoured by the Scottish Government could result in an independent Scotland having to submit budgetary plans to Westminster first for approval, before putting them to Holyrood.

Ms Lamont challenged him on this, asking him who he would prefer to sign off an independent Scotland's budget - Mr Osborne, Labour shadow chancellor Ed Balls or German Chancellor Angela Merkel.

Mr Salmond told her: "I mustn't pick the the cabinet in advance, and I mustn't say in advance of the Scottish people.

"But if the Scottish people back the Scottish National Party, the way things stand just now, that first budget will be set by John Swinney."

Ms Lamont insisted: "We all know that's not true given what has been said in the last week."

She said the Scottish Government had been "unable to answer the very simple questions about the implications for Scotland being in a sterling zone".

The Labour leader branded the UK Chancellor a "slippery, untrustworthy man" and said his fiscal and monetary policies were "wrong for Scotland, and indeed the whole of the United Kingdom".

But she said the difference between her and the First Minister was "I want to get rid of the Tories and keep the Union, he wants rid of the Union and to keep the Tories in charge of the economy".

Ms Lamont pressed her SNP rival on this, demanding: "Can the First Minister explain to me why that would be independence?"

Mr Salmond said the arguments for a sterling area involving an independent Scotland and the rest of the UK had been set "in enormous detail "by the Fiscal Commission Working Group some weeks ago.

The group of economics experts, who were appointed by the First Minister, concluded a sterling zone where an independent Scotland would retain the pound is ''sensible'' and an attractive choice for the rest of the UK.

The SNP leader said such an arrangement would provide an independent Scotland with "flexibility over taxation and spending".

Ms Lamont said: "We now no longer seem to cry freedom, we cry flexibility, whatever that might mean."

She claimed the First Minister was "yet to answer a simple question about the implications of his choice" and had "no Plan B for the currency".

The Labour leader added that Finance Secretary John Swinney had previously suggested Scotland "might leave the United Kingdom without paying any debts at all."

This, she said, would mean "Salmond's Scotland" would start off as "an international pariah without a currency".

Ms Lamont continued her attack and said: "Four weeks ago I asked the First Minister what his Plan B was if we couldn't agree on a currency union.

"Like George Osborne, he said there was no Plan B, so is his strategy to say 'let us into a currency union or we won't pay our debts'?"

Mr Salmond told her the Scottish Government's position was that if Scotland left the UK it would be "entitled to a share of the assets proportionately of the United Kingdom and the liabilities of the United Kingdom".

While he said that was the "responsible position", he said Mr Swinney had made the point that "if George Osborne says all of the monetary assets belong to him, belong to the London Government, then by definition as night follows day, if you pursue that argument then so do the liabilities".

He went on: "People may have noticed that George Osborne and Alistair Darling between them have piled up an enormous number of liabilities over the last few years."

He also attacked Ms Lamont for Labour's links with the Tories in the cross-party Better Together group, which is campaigning to keep Scotland in the UK.

Mr Salmond said: "Johann Lamont criticises the Conservative Party. It is kind of difficult to do that when you are in an alliance with the Conservative Party.

"You can't say you don't like what George Osborne is doing to Scotland, then campaign shoulder to shoulder with him in the Better Together campaign."

Ms Lamont responded by challenging the First Minister's credibility on the issue, claiming: "He changes his position on the currency more times than I change my shoes."

She added: "He talks about building up liabilities, yes we remember how we built up those liabilities, saving the Royal Bank of Scotland, the bank the First Minister used to work for."

She said without a Plan B on currency "you can boil down the First Minister's position as simply this - please, gonnae please let us be in a currency union".

The Labour leader continued: "The First Minister clearly doesn't understand why this matters, he thinks it's a bit of a game, a bit of a knockabout.

"But it matters to families worrying about what currency their wages will be paid in and how they will put food on the table.

"It matters to pensioners who are entitled to know how how their pension will be paid, it matters to the person who has saved all of their life and who now wonders what those savings will be worth if there is a Yes vote.

"It matters to anyone paying off a mortgage, to anyone in a job, anyone in a business."

Mr Salmond said: "The Fiscal Commission Working group put forward in enormous detail why we think it is in the interests of Scotland to have a sterling area after independence, and why it was overwhelmingly in the interests of the rest of the United Kingdom."

He suggested that was why both Mr Osborne and the Chief Secretary to the Treasury Danny Alexander had refused to rule out a currency union.

Conservative leader Ruth Davidson said the SNP leader had shifted position from saying the pound is holding Scotland back.

"Can I ask at what point in the First Minister's political journey did the pound sterling stop being a millstone and start being a life raft?" she said.

The concept of a sterling zone will be difficult to establish, she said.

Former economic adviser to the Scottish Government John Kay has also warned he would "expect to fail" in negotiating for such a currency union.

Ms Davidson said: "We know this First Minister's a gambler, we know he's reckless. Is he honestly telling Scotland he would enter negotiations with no bargaining position and no back-up plan?"

Demanding a "plan B", she added: "Is it to use sterling anyway, like Ecuador uses the US dollar; or is it a separate currency - as his economic adviser suggests, the bawbee?"

Mr Salmond said the SNP wants to put forward what is in the best interests of Scotland.

"The bargaining position is £50 billion of Scottish assets which underpin the UK economy," he said.

"We've got a Conservative Party who are celebrating because over the last six months UK GDP has flatlined entirely.

"A Chancellor playing with fire, according to the International Monetary Fund, who's been downgraded in two of the three rating agencies.

"Yet the Better Together campaign are still delivering leaflets saying that you've got to maintain AAA status by voting for the Union."

Green Party co-leader Patrick Harvie questioned why a separate Scottish currency appears to have been ruled out.

He said: "Securing the future of Scottish bank notes or any other favourable terms of a currency union with sterling might well be possible, might even be in Scotland's and the rest of the UK's interests, but how can we possibly be in a strong enough position to negotiate those favourable terms if the Government has closed down the other option of a genuinely independent currency?"

Mr Salmond replied: "The Fiscal Commission put forward what we think is in the best interests of Scotland. The Scottish Government has responded by accepting its conclusions."

He added: "I think a Tory chancellor coming to Scotland and talking down the country and telling us what we can't do is exactly the sort of stimulus that the Yes campaign needs.

"I think we can make an offer to George Osborne: let's pay his bus fare in coming to Scotland to sink the No campaign."