Go-alone Scotland won’t get UK’s triple-A credit rating, Scottish Secretary warns

Michael Moore is 'confident' more powers would be devolved
Michael Moore is 'confident' more powers would be devolved
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AN INDEPENDENT Scotland would have its credit rating downgraded, raising the price of government and personal borrowing, Liberal Democrat Scottish Secretary Michael Moore will today claim in a major speech.

The speech at a CBI Scotland event will mark a new attack on the economic viability of the country should voters back independence in 2014.

But last night the claims were being dismissed by the Scottish Government, which argued Scotland would end up with a better credit rating than the rest of the UK.

In his speech today, Mr Moore will point out that despite just coming out of a double-dip recession, the UK has a strong triple-A credit rating, while countries such as France and the United States have been downgraded.

He will add: “We benefit from strong structural demand for our debt from investors because of its liquidity and very long maturity. And we benefit from our status as the most creditworthy issuer of sterling sovereign-denominated debt.”

But he will question whether this would be the case for an independent Scotland.

“An independent Scotland would not inherit the UK’s strong credit rating – a rating we’ve managed to keep hold of when our European neighbours have not.

“Instead, Scotland would have to start from scratch and approach the agencies to get a rating, without a track record to rely on.”

He will claim this means it is “very unlikely an independent Scotland could borrow as cheaply as the UK”.

He will add: “These are serious consequences that will affect Scottish businesses and will impact on growth. The onus is on the SNP government to tell Scots why they should give all this up.”

In his speech, Mr Moore will say his views are backed up by the three international credit rating agencies: Moody’s, Fitch and Standard & Poor’s.

However, the agencies have yet to go on the record with their official view of a credit rating for an independent Scotland.

Fitch has previously reported that Scottish independence would “probably” have a neutral impact on the residual UK’s AAA sovereign credit rating.

However, it reports it is “impossible at this stage” to speculate on a possible rating for an independent Scotland, because of challenges of the nature and terms of independence and uncertainty over asset, liabilities, regulation of the financial sector and a possible currency change.

A Scottish Government spokesman said: “We are entirely confident of Scotland having the top credit rating – in common with other small nations such as Finland, Denmark, Norway and Sweden – and that position is supported by Scotland having stronger public finances than the UK as a whole, and lower public sector debt. Denmark, Finland, the Netherlands and Sweden all enjoy a lower cost of borrowing than the UK.

“Indeed, almost two thirds of the countries deemed to have triple A status by Standard & Poor’s have a population of less than ten million.

“In addition, Oil & Gas UK estimates that the sector boosted the UK’s balance of trade in goods and services by £40 billion in 2011 – almost halving the UK’s deficit.”

The spokesman added: “We have been self-governing in domestic policy for some 12 years now, and this administration has balanced the budget in each and every year since 2007.”