It’s the debt stupid, not the currency

Sir, In 1707 it took bribes (mainly paid to the Scottish nobility) to get them into the union and it now appears it will take cash payouts to avoid divorce – or as Alex Salmond would have it, “separation”, where we continue as “just good friends” (“Scots see Cameron visit as panicky”, September 11). In desperation, the “Three Amigos” (David Cameron, Nick Clegg and Ed Miliband) make a last-minute gallop north of the border, as they finally realise the “bad guys” are using real bullets. What next? A kilted Alastair Campbell on bagpipes reprising Things Can Only Get Better, accompanied by a chorus of Labour MPs on the train out of Euston?

After the scaremongering over the currency, resulting in fear and loathing in West Lothian, the Three Amigos now hope for a temporary love-in until the vote on the 18th. But all this will do is reinforce the Scots’ view of Westminster’s remoteness and lack of trust in the “English parliament”.

Divorce can be either amicable or contentious and expensive – to both parties. But the main thing the Scots have to fear is excessive debt: household, company, bank and government debt. Keep these at manageable levels and Scotland can prosper, whether they simply use sterling (it’s a world currency after all, created by banks not by Mark Carney) or enter a formal currency union (taking on a UK debt commitment in exchange for the Bank of England acting as lender of last resort) or eventually join the euro. It’s the debt stupid, not the currency that’s the key to the economics.

Whatever the outcome of the vote, the Scots will end up in a new civil partnership. I hope it’s a “Yes we can” – not least because it might act as a catalyst for a major decentralisation of power from Westminster.

Prof K Cuthbertson, Cass Business School, London EC1, UK