An independent Scotland must still pay debt
Published 28/03/2014 | 02:30
Alex Salmond claims that, if the UK would not allow an independent Scotland to share sterling, this would mean Scotland would not be liable for its share of the national debt. No, it would not.
A Yes vote in the referendum would authorise the Scottish government to negotiate terms for independence, but the terms would have to be agreed by both sides. It may well be that, no matter what currency Scotland might use, the creditors of the UK would not be willing to have Scotland take on its share of the debt on the current terms enjoyed by the UK, because independent Scotland – a new nation without an established credit rating – could not expect such good terms.
If a newly independent Scotland cannot persuade international markets to give it the same credit rating as the UK, there is no reason why the UK should ignore the risk factor and grant favourable terms to Scotland.
I find it interesting that Salmond thinks it reasonable to suggest that Scotland can leave with the lion's share of North Sea oil and leave the national debt behind. It is a bit like a party to a divorce keeping the house, but leaving the mortgage. The North Sea oilfields were developed by the UK and became assets belonging to all UK taxpayers – including English, Welsh and, yes, Northern Irish.
If independence happens, it would be reasonable to agree that assets and liabilities should be apportioned by population.