Robert Peston examines the question of whether a post-referendum Scotland would be debt-free or would have a share in the existing debt obligations of the United Kingdom:
This morning’s statement from the Treasury that the UK will stand behind all its sovereign debts, whether or not Scotland’s people vote for independence, is in a way a statement of the bleedin’ obvious.
That debt, all £1.4 trillion of it, is an obligation of the National Loans Fund.
And nothing can change that — whether Scotland were to decide to secede (or, to pick an unlikely corollary, in the event that the People’s Liberation Army of West Sussex, miffed about fracking, were to declare UDI).
So why has the Treasury chosen to say that the UK will honour its debts, whatever Scotland does?
Well, it is because investors — whom we may think of as sophisticated and informed (ahem) — have been increasingly asking the Treasury and the Debt Management Office for clarification of the status of the UK’s financial obligations in the event of a fracturing of the United Kingdom.
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Who would not vote for independence if an autonomous, separate Scotland would be set free from the burden of UK debts currently equivalent to 76% of GDP or national income (on the latest estimates by the Office for Budget Responsibility)?
Except that even Alex Salmond and the Scot Nats don’t believe that an independent Scotland could, in practice, walk away from its fair share of the UK’s debts — even if they would have the legal ability to do so.
