Scottish independence: SNP urged to come clean over credit rating
Johann Lamont has called for the SNP to come clean. Picture: PA
THE Scottish Government is facing calls to seek urgent advice on an independent Scotland’s credit worthiness, after three of the world’s leading ratings agencies warned it would lose its triple-A status.
Standard & Poor’s, Moody’s and Fitch have indicated Scotland would not automatically inherit the UK’s top-notch rating after separation, prompting claims the case for independence is “unravelling by the day”.
Ministers insisted yesterday they were “entirely confident” the country would get the highest possible rating, despite the warning that Scotland’s score is likely to be “some notches” below AAA.
The Scottish Government insists the UK’s “deteriorating growth outlook” has led the credit ratings agencies to question the UK’s triple-A status.
“We are entirely confident of Scotland having the top credit rating, in common with other small nations such as Finland, Denmark, Norway and Luxembourg, and that position is supported by Scotland having stronger public finances than the UK as a whole and lower public sector debt,” a spokesman said.
“Indeed, nearly two-thirds of the countries deemed to have triple-A status by Standard & Poor’s have a population of less than ten million.”
The SNP is adamant Scotland is in a better financial position than the UK as a whole, saying North Sea oil and gas boosted the UK balance of trade in goods and services by £32 billion in 2010.
However, Scottish Labour leader Johann Lamont said: “The economic case for separation is unravelling by the day.
“I find it extraordinary that the SNP have not even approached the credit agencies for a draft opinion. Basically, they are asking the people of Scotland to take a gamble on the economic future of the country. While independence may be an article of blind faith for the SNP, people deserve to know the real consequences of breaking away from the rest of the United Kingdom.”
Scottish Tory finance spokesman Gavin Brown said ratings agencies were taken “extremely seriously” by investors all over the world. “A drop of just one notch would have severe consequences for our economy and it is vital that we maintain triple-A status,” he said.
“I am astonished that the SNP government has not even sought opinion from these credit agencies on the potential rating of a separate Scotland. I am calling on the SNP to seek a draft opinion on what our rating might be so we present the people of Scotland with all the facts of what separation from the UK would mean for our economy.”
Scottish Liberal Democrat leader Willie Rennie said: “This is just another example of the continuing uncertainty over the implications of independence.
“Instead of focusing on the process, the SNP need to answer the serious questions on what an independent Scotland would look like. Continuing to bury their heads in the sand will not wash with the public who want to have a mature discussion about Scotland’s future.”
Standard and Poor’s sparked controversy last year when it downgraded the United States from a AAA rating to AA+, while France was recently stripped of its AAA status in a mass downgrade of nine eurozone countries by the agency.
Being downgraded can have a crippling effect on a country’s ability to borrow money on the markets. It would effectively mean more being spent on borrowing to fund schools, hospitals and other public services.
Last month, fund manager Jim Leaviss, of M&G Investments, warned that an independent Scotland “would probably get rated lower” than AAA.
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Comments
There are 189 comments to this article
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steveluby
Sunday, February 12, 2012 at 08:56 AMWestminster Parliament: if Scotland vote yes in 2014,if negotiations are complete by 2016,an election will then be held!! Will the U.K Government pass on budget details to the Credit Rating Agencies in 2012 for the year 2016???? If these agencies don't have some idea of what kind of rating Scotland could have,then they know as much about what there doing than the U.K Government understands about the aspirations and politics of Scotland. The Scottish Labour Party knows nothing of economics,they have proved that for decades. Would they pass on details of the Scottish Economy to these agencies if they we're seeking Independence????? U.K credit rating will fall within a few short month's,anyone who can't see this should simply recognize that pumping monies into a an economy that can't fund this becomes a liability.This is all following in the wake of the U.S.A doing the same thing,and everyone is sitting back ,waiting for the preverbial hitting the fan. AAA rating? Maybe,maybe not,but that should never deter a nation from taking steps towards whats right for itself.
David Milligan
Wednesday, February 8, 2012 at 08:50 AMA few simple questions; How many of you believe what you are told by the Westminster Government? How many of you believe that the political parties who are part of the main UK party are autonomous and unfettered by their political leaders in London? Do you wish to have policies and economic constraints imposed on you by Westminster that don't work in Scotland and actually damage Scotland's economy? Do you actually think that Scotland is fairly represented in the House of Commons? Do you want to stay as you are or support independence? I could have asked dozens of questions here but these are enough perhaps to get you thinking. And before some posters come back with "smart" answers, think first as your stance may be harming your famiky in the long run. Think hard.
David Milligan
Wednesday, February 8, 2012 at 08:38 AMRider - This Easter Bunny fan is only trying to help you get to some real information. When there's a lot of money at stake and it has been proved that several Westminster administrations have "downplayed" Scotlands true economic position in straightforward lies to the Scottish public, what is it that gives you confidence in the figures that you are being presented with. Please, don't believe a word I'm saying but at least go and do a bit of digging for yourself. You owe it to yourself and your family. You've got a good mind, now use it, and as I say, I'll meet you at the finish line.
well informed
Tuesday, February 7, 2012 at 11:25 PMIt is good to know these threads are unmoderated. -------------------------------------------------------------------------------------------------- No house trolls were harmed by this post.
Fergie35
Tuesday, February 7, 2012 at 09:45 PMSorry I m off the topic a wee bit. I ve read The Daily Mail as regards the Scottish referendum, & anything in support of Independence gets edited out.I m always polite & respectful, so why have I no voice? What kind of democracy is this UK? What kind of Union for the Scots? That paper is guilty of producing columns of lies, and misinformation, that in turn whip up comments of the vilest anti Scottish & anti SNP bigotry along with childish behaviour & misinformed brutality. Scotland has the London based BBC, which is so anti independence that it is now seen in Scotland as the state controled broadcaster. I think the debate should be on a level field with honesty, because due to the internet people are now starting to get more truth elsewhere.
samcoldstream
Tuesday, February 7, 2012 at 08:36 PMThe Leader of the Labour Parliamentary group at Holyrood should not tempt fate. It was recently reported that the UK has now broken through the £3 trillion national debt ceiling which is costing it £145 billion in annual interest payments. Growth has slowed, and the economy is on the verge of double-dip recession with 3 million unemployed, and still has one of the highest inflation rates in the past decade. IF, the Coalition austerity measures fail, the economy enters a period of prolonged stagflation, and unemployment rises even further then just like Japan the UK's credit rating will be downgraded. (Source: The Financial Times)
Hester Blumenbonus
Tuesday, February 7, 2012 at 08:03 PMThe Pictures Editor is incorrigible.
I AM THE OPERATOR OF A POCKET CALCULATOR
Tuesday, February 7, 2012 at 05:42 PMComment removed that merely asked Mrs Lammont to name her reasons as to why we could not acheive a triple A rating, no bad language and no naughtyness. Labour party round robin strikes again. Nothing like the sweet smell of democracy , EH?------------------------------------------------------------------------------------------------------Perhaps we should all just agree with Labour, at least our comments would remain un-molested.
rider000
Tuesday, February 7, 2012 at 05:16 PMEven with that spending factored in, Scotland's financial position in 2008-09 was a current budget surplus of £1.3 billion, or 0.9 per cent of GDP, including a geographical share of North Sea revenues. At the same time, the UK was in current budget deficit of £48.9 billion, or 3.4 per cent of GDP, including 100 per cent of North Sea revenues........ A nice bit of balanced accompanyment to the GERS report, 2008-9 NSO tax take was over £12bn on the back of record oil prices, contribution halved in 2009 - 10. At least excluding 100% of NSO from the UK figures wouldn't change things across the UK economy as a whole. Isn't it a pity that 20 years of NSO at 2009 - 10 contribution level will just about cover the outstanding RBS toxic loan liability.
rider000
Tuesday, February 7, 2012 at 05:07 PM178 David Milligan ........... Ah right, so the Scots gov website is clearly a mouthpiece of unionist drivel and you need to go to the holy grail to get the real story. Easter bunny is due soon too.
HighwayChode
Tuesday, February 7, 2012 at 04:56 PMFamily Guy. You seemed to think that the Claim of Right 1989 is a legal document that is part of the constitutional law of this country. That is absolute nonsense. It has no legal force and is no more a part of consitutional law than a menu at Nando's. Your confusion is that you are repeatedly confusing the political with the legal.
David Milligan
Tuesday, February 7, 2012 at 04:55 PMRider, try looking at the Gers report under "extra regio income", that'll give you a clue. There's a lot that you have to dig for. Go on to the Newsnet Scotland website and any number of posters there will gladly give you direction to get the "real" numbers. Exasperating, isn't it? Enjoy the journey. See you at the finish line.
rider000
Tuesday, February 7, 2012 at 04:43 PM176 David Milligan Tuesday, February 7, 2012 at 04:16 PM Rider000 is getting upset because people aren't agreeing with him. Oh dear. Rider, 2009-2010 tax year the figure minus any VAT or fuel duty on purchases of fuel at a garage is £13.4 Billion................ I haven't got a clue where you are pulling your figures in from. The Scottish gov web site has the 2009-10 tax revenue at £6.49bn on North Sea Oil.
David Milligan
Tuesday, February 7, 2012 at 04:16 PMRider000 is getting upset because people aren't agreeing with him. Oh dear. Rider, 2009-2010 tax year the figure minus any VAT or fuel duty on purchases of fuel at a garage is £13.4 Billion. The licences for the as yet "undiscovered" fields were put up for sale about three weeks ago. Funny that isn't it? The real information is there on the internet. Don't get angry, just get clued up on the reality of our unique situation. We don't need your politics for independence, we just need you to put the "X" in the right box. I know that Labour are suffering at the moment but if they get behind independence they will "connect" with the Scottish electorate once again. And I can tell you that as a keen as mustard supporter of the SNP and a CyberNat, I would be delighted if that happened and the Labour Party took their proper place in Scottish politics. I never thought I would see us this far towards independence in my lifetime but here we all are. Now isn't that a turn up for the books? (:D)
rider000
Tuesday, February 7, 2012 at 04:03 PM162 Family guy Tuesday, February 7, 2012 at 03:03 PM Also, what happens if Shetland goes off on its own------------------------------------it won't................... So you speak for the Shetlanders, oh head of the vikings or extreme arrogance.
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