Scottish independence: Credit blow for No campaign

By SCOTT MACNAB
Published on 24/02/2013 21:54

The loss of the UK’s triple-A credit rating has dealt a “hammer blow” for the pro-Union campaign in the Scottish independence debate, Nationalists have claimed.

Credit agency Moody’s downgraded the UK’s status on Friday and gave a gloomy forecast for the British economy.

The Better Together campaign had trumpeted the top notch credit status, which affects the rate at which government’s borrow cash, as a key reason for sticking with he UK, insisting it would be difficult for a fledgling economy like Scotland to secure this after independence.

Labour says the downgrade to AA1 status was a humiliation for the coalition government, but ministers insist there is no reason it should impact on the “real economy”.

The agency, the first to downgrade the UK rating since 1978, said it expected growth would “remain sluggish” over the next few years and the government’s debt reduction programme faced significant “challenges”.

SNP Treasury spokesman Stewart Hosie MP said: “The anti-independence campaign used the UK’s triple-A credit rating as one of their core reasons not to vote Yes in 2014, but this has been dealt a hammer blow.

“With No campaign leader Alistair Darling attacking Westminster’s austerity agenda – when he himself as chancellor wanted cuts deeper and tougher than Thatcher – adds to the No campaign’s lack of credibility.”

It is not clear what credit rating an independent Scotland would get, but Nationalists say small, well-managed countries can have “every expectation” of enjoying the highest rating.

“Almost two-thirds of the countries that now hold triple-A status have populations of fewer than ten million – including Sweden, Denmark, and Norway,” Mr Hosie added.

The UK and France have already lost AAA status. Critics say credit agencies had given major financial institutions a clean bill of health in the build-up to the banking crash five years ago.

Mr Darling, who heads the Better Together campaign, said yesterday he had been “extremely doubtful” of the government’s strategy since 2010.

“When they were elected they very unwisely staked their reputation on maintaining the AAA credit rating,” he said.

But Business Secretary Vince Cable yesterday dismissed the loss of the AAA rating as “largely symbolic”. He said: “In terms of the real economy there is no reason why the downgrade should have any impact.”