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Scotland's Salmond: blocking pound will hurt UK

Jessica Morris, special to CNBC.com
Monday, 17 Feb 2014 | 9:44 AM ET

Stopping an independent Scotland from using the pound will hurt businesses in the rest of the UK, warned the country's 's first minister.

Alex Salmond, Scotland's first minister, hit back Monday at criticism from the U.K's main political parties over the Scottish Nationalist Party's (SNP) plans to retain the pound if Scotland achieves independence.

(Read more: Britain says Scotland would lose the pound if it leaves UK)

Jeremy Sutton-Hibbert | Getty Images

The speech came in response to UK treasury chief George Osborne's warning on Thursday that if Scotland votes for independence in a referendum this September, it would not be able to keep sterling .

"If Scotland walks away from the UK, it walks away from the UK pound," Osborne said last week.

(Read more: Carney to Scotland: Be careful what you wish for)

In a spirited defense Monday, Salmond warned that if plans for a currency union between the two countries was blocked, businesses across the UK would face increased "transaction costs" importing from and exporting to Scotland. Salmond added that the ban, which he dubbed a "George tax", could "run into many hundreds of millions of pounds."

Would Scottish banks move south if Scotland was independent?
Sam Bowman, research director at the Adam Smith Institute, says banks like the Royal Bank of Scotland could move to England if Scotland got independence as there would be no guarantee of getting a bailout should the institution collapse.

The Scottish leader, who is campaigning for a "Yes" vote in September, slammed Osborne for bringing party politics into an economic debate.

"In short, what was presented was not an economic assessment but a campaign tactic" he said.

Westminster's two other main political parties – the Conservatives and the Liberal Democrats – have also rejected the SNP's plans for a currency union in an independent Scotland.

(Read more: Barroso ruffles Scottish feathers over EU membership)

"Scotland needs a stable currency, within a secure single market, so that Scottish companies have the best chance to grow and create jobs. Staying in an unstable currency union would have serious economic consequences" said John Cridland, CBI Director-General.

"With the three main UK political parties making it clear that keeping the pound after independence is not an option, it is maintaining the Union that offers the stability of sterling that businesses need."

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