Osborne Warns Scotland: No Union, No Pound
George Osborne has threatened Scotland that if there was a "messy divorce" and it left the UK, it would not be able to keep the pound.
In a robust speech, the Chancellor warned Scottish people that there was no legal reason why they should keep the pound if they voted for independence.
He said that without the pound Scotland's major banks would leave and he cautioned that the country would be charged a premium for borrowing without currency union.
Mr Osborne estimated that this would add £1,700-a-year to people's mortgage repayments.
In a speech in Edinburgh he said: "People in Scotland are being asked to accept two diametrically opposite things at the same time - that with independence everything in Scotland will change and at the same time nothing will change.
"It simply doesn't add up for the Scottish Government.
"If Scotland walks away from the UK, it walks away from the UK pound."
Following the speech there was anger on Twitter from Scottish people, who accused the Chancellor of recklessness and threats.
Drew McGowan wrote: "Cameron sends his Bullingdon Club buddy, Osborne, to Scotland to lecture and 'warn' us of independence. Running scared, David?"
Robin Barbour wrote: "Watching Osborne reminds me of Edward 1 line in Braveheart,'the trouble with Scotland is that it's full of Scots' Can't think why."
Mr Osborne argued the countries of the UK have together "faced the worst economic and financial crisis since the great depression" and "avoided the economic collapse other nations around us in Europe faced because together, we had the strength to confront our problems and overcome them".
Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, endorsed Mr Osborne's view on behalf of his party saying that a currency union "simply isn't going to happen".
He said he "couldn't recommend a currency union to the people of Scotland and my party couldn't agree to such a proposition for the rest of the UK".
Deputy Prime Minister Nick Clegg told LBC radio: "The point that George Osborne and Danny Alexander, on behalf of my party, and Ed Balls, on behalf of the Labour Party, are making is that if you analyse what you need to make sure that a currency union is successful, it is very difficult to make that successful if you are pulling apart in so many other ways.
"This is not to try to browbeat anybody. This is to say 'Let's take a clear look at the facts. It's not an easy circle to square, to say we are going to pull apart in one direction but keep the currency in the other'."
Shadow chancellor Ed Balls is also expected to endorse Mr Osborne's comments.
Nicola Sturgeon, Scotland's Deputy First Minister said it was the "Westminster establishment ganging up to try and bully Scotland" into voting against independence in September's referendum.
She warned: "This is a panic move which will backfire spectacularly."
The Scottish Government has set out plans to retain the pound if people vote for independence, creating a "sterling zone" with the rest of the UK.
Last month, the Bank of England Governor said Scotland would have to settle for less independence than most other nations enjoy if it seceded from the United Kingdom.
Mark Carney warned of "clear risks" associated with the economics of Scottish independence, adding that the country would have to surrender some of its sovereignty if it were to retain the pound.
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