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Treasury to take responsibility for total $1.2tn UK debt if Scotland goes independent

Published time: January 13, 2014 14:22
Edited time: August 26, 2014 17:25
Pro-independence supporters march in Edinburgh on September 21, 2013 for a march and rally in support of a yes vote in the Scottish Referendum to be held on September 18, 2014. (AFP Photo / Andy Buchanan)

Pro-independence supporters march in Edinburgh on September 21, 2013 for a march and rally in support of a yes vote in the Scottish Referendum to be held on September 18, 2014. (AFP Photo / Andy Buchanan)

The UK Treasury has confirmed it will take on the full responsibility for government debt if Scotland votes for independence in September. This is an attempt to minimize market turmoil ahead of the Scottish referendum.

"In the event of Scottish independence from the United Kingdom, the continuing UK government would in all circumstances honour the contractual terms of the debt issued by the UK government," the Treasury said in a statement.

The move is expected to shake off investor fears that some part of the UK’s debt will be transferred to a newly independent Scotland with no credit history.

While some experts believe London’s decision may undermine its negotiating stance, a Treasury insider told the Financial Times (FT) the move wouldn’t “weaken our hand”.

“If Scotland reneged on what it owed the rest of the UK, it would be an international pariah in the markets. The UK has a strong hand here,” the FT source said.

The Treasury expects an independent Scotland would settle its share of government debt, as well as directly reimburse the rest of the UK, This which will have to be negotiated with a new Edinburgh government.

Scotland, in turn, has repeatedly said its desire to pay off a part of the UK’s liabilities would depend on whether it would gain a share of UK assets.

An independent Scotland is expected to have less debt per person than the rest of the UK, with the borrowing costs being about 1.7 percentage points higher, according to a report last year by the National Institute of Economic and Social Research.

Comments (9)

 

Steven Wilson 12.03.2014 03:28

Lockerbie: What really happened?

Edinburgh accuses UK of hushing up British nuclear leak on Scottish territory

 

Correct Politically 16.01.2014 11:45

The Cabal run UK stollen all of Scotlands resources "just as they did with everyother country" now that there is nothing more left in Scotland but debt it would be OK to at least let them go off debt free :-) On a personal note I think the Empire has been darkening this world for long time its time for them to calm da fck down or to go under ... Its 2014 for god sake lets see some fair play at last ...

 

Eduardo 14.01.2014 19:11

Bond 14.01.2014 13:26

According to todays Daily Telegraph readers poll the vote for which country is better to live in:

  


According to their own website, the average age of a Telegraph reader is 61. France would be great country to retire to. If you are young and ambitious you would be better off elsewhere.

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