PEOPLE in the North of England would still be able to work and trade in an independent Scotland without changing currency, said First Minister Alex Salmond.

In a speech in Carlisle, he insisted that Scotland will keep the pound, despite the pointed refusal of all major UK parties to agree to a currency union.

The social and economic ties that exist on the border will continue, Mr Salmond will say, challenging UK Government predictions that independence would see a ''profound change'' in cross-border relations.

The speech to English citizens comes on St George's Day, and the Scottish Conservatives have urged Scots to ''slay the independence dragon'' at the referendum on September 18.

The First Minister said: ''Following independence, the social union between the peoples of these islands will remain.

''People would still live in Annan and work in Carlisle, or live in Penrith and work in Lockerbie. Friends and family would continue to visit each other.

"We would still watch many of the same television programmes. People from Scotland and England would still celebrate personal unions - by getting married in Carlisle Cathedral or perhaps by going to Gretna instead.

''On Monday, there were gun salutes in Stirling, Edinburgh and London to mark the Queen's birthday. That would continue, since we would still share a monarchy with the rest of the United Kingdom - just as we did for a century before the Parliamentary Union of 1707, and just as 16 other Commonwealth countries do now.

''Carlisle would still have strong trade and transport links with Scotland. We would continue to share the same currency.''

The Scottish Government intends to host a series of forums on economic co-operation with the north of England in the event of a 'Yes' vote in the referendum, inviting representatives from local authorities and business organisations to participate, he confirmed.

Scottish Conservative deputy leader Jackson Carlaw said: ''People in England will certainly recognise a dragon when they see it, particularly a toothless one.

''Meanwhile, the people of Scotland look forward to slaying the independence dragon on September 18.''