The pound in your pocket...

On the 18^th of September this year Scots 16 years of age and older will face the most significant democratic decision in our country’s history. For many adults this decision is extremely daunting. I can only imagine then how my fifteen years old son and his peers will feel when they go into the polling station in September.

The referendum is not like a general election where we can change the government every few years if we don’t like what they have been doing. It is also not like previous referenda, such as those on membership of the EU, the establishment of the Scottish Parliament or, more recently, the introduction of the alternative vote system for Westminster elections. These decisions were, or are, all potentially reversible.

If we vote to separate Scotland from the rest of the United Kingdom on 18 September there will be no going back. It is a one-way ticket. Before we make such a momentous decision therefore it is crucial that we know the consequences.

Polling evidence shows that for those who are undecided how to vote the economy is the major concern. They want to know what currency we will have; who will be setting our interest and mortgage rates; will our taxes go up or down; what will happen to pensions; and generally will we better or worse off?

Until recently the SNP assured us that there was no question that we would form a currency union with England, Wales and Northern Ireland after separation and that we would continue to use the pound and the Bank of England would continue to set our key interest rates.

It is becoming clear that this isn’t going to happen. The SNP and the other parties involved in Yes Scotland must now let us know what their Plan B is.

Are we going to join the Euro? Are we going to have a separate Scottish Currency? Or are we going to continue to use the pound without the consent of the Bank of England and without any influence over it, similar to the way that Panama uses the US dollar?

We really need an answer to this fundamental question as many other economic consequences flow from it.

Of course there are deep divisions within Yes Scotland on the currency question. While Alex Salmond and the SNP stubbornly cling to the forlorn hope of a currency union with the rest of the UK, senior figures like its Chairman Dennis Canavan and Green MSP Patrick Harvie openly support a separate Scottish currency.

In most countries elections tend to be decided by economic factors. As they say in America: “its the economy stupid”.

It appears increasingly likely that the outcome of the 2014 Scottish referendum will be determined by which side is trusted most on the economy. In the end it could be “the pound in your pocket” that decides it.