In full: Jennifer Dempsie webchat on Scotland’s share of the UK debt

Jennifer’s article from Tuesday’s Scotsman can be found here.

1212 Jennifer Dempsie

Afternoon Scotsman readers. Hopefully some nice and easy questions for me today!

Did you get a chance to read my column today on why we need to have balanced analysis on Scotland’s share of UK assets as well as liabilities on independence?

1213 Comment From Billy

What would happen to the RBS and bank of Scotland debt if Scotland was to become independent?

1217 Jennifer Dempsie

On independence Scotland would take it’s population share of the UK’s debt- just as it would have a population share of assets.

The good news is that an independent Scotland will have lower public sector debt than the UK. Indeed, Scotland’s public

sector debt is also lower than the EU and G7 averages.

1217 Comment From Guest

So, does it really all get split 91% to the Uk and 9% to Scotland - all assets?

12:23 Jennifer Dempsie

In theory yes - last week the David Hume Institute did calculate a suggested total UK asset base of £821 billion, with Scotland having an approximate £69bn share which is based on our population share of approx 8.4%.

But that is not all the assets.

Things like North Sea oil is a geographical asset. Oil & Gas UK estimates that there is a wholesale value of £1 trillion left of North Sea oil and gas.

12:23 Comment From kendomacaroonbar

Is there a proposed independent assessment of these figures or do we accept the UK governments figures ?

12:27 Jennifer Dempsie

Very good question. Hopefully the Financial Commission Working Group, made up of members of the Scottish Government’s Council of Economic Advisers will look at this.

With members like Joseph Stiglitz, Professor Andrew Hughes Hallett, Professor Sir Jim Mirrlees, and Professor Frances Ruane it should provide a strong starting point.

But we also need other independent academics, economics and media analysis to have a full debate. Hopefully the Scotsman will get involved too!

12:29 Comment From Spooked

And as a corollary to Billy’s question if BoS and RBS were wildly profitable would your anser be the same with respect to the tax on the profits

12:34 Jennifer Dempsie

I am sure we all hope that these banks return to more balanced books. Hypothetically- if they have paid back their debt to the governments and have returned to stronger asset position we would have a share of profits based on what % we still had at that stage. That is my understanding, but thankfully I am not an economist...

12:34 Comment From Baz

Concerning overseas representation, does the SNP envisage it will share UK embassies, that it will employ representation through another nations embassies or establish its own?

12:39 Jennifer Dempsie

Internationally countries often share the diplomatic and consular load, particularly in the EU and Commonwealth – don’t see why a similar arrangement can happen post-independence particularly since Scotland has a share of the UK overseas properties. We don’t need to reinvent the wheel and it makes economic sense.

And we already have a network of Scottish Development International offices around the world which will be utilised under a Scottish Foreign & Commonwealth Office. And instead of paying for these services to be based in London we have them in Scotland creating jobs.

12:40 Comment From Chris W

My question doesn’t really have anything to do with the debts & assests issue, it’s about the pound. Should we get independence, would we have to drop the pound and join the euro or would we have our own pound - possibly not worth as much as the English?

12:45 Jennifer Dempsie

The SNP Government’s firm position is that Scotland would retain Sterling as its currency. It has no plans to join the Euro and would not be forced into joining. Scotland is already a member of the EU and is not currently in the European Exchange Rate Mechanism II. Therefore Scotland would not be forced to join the Euro. Sweden is in a similar position and has not joined the Euro.

I think an independent Scotland would make a substantial contribution to a Sterling Zone, with its strong asset base and considerable wealth.

Maintaining a currency zone with the UK makes sense – both for Scotland and the UK but we need economic and fiscal flexibility to boost growth and create jobs

Monetary unions have clear economic advantages – which is why around 40 countries across the world are currently part of a formal monetary union.

12:46 Comment From Bill

Given that the splitting of assets and liabilities will be a process of negotiation (military assets for example) who would the independent adjudicator? The UN or the EU?

12:48 Jennifer Dempsie

That’s a very good question which I am not exactly sure of the answer of! I think if things can be agreed by process of negotiation then would not need an adjudicator, but that would be a guess. Think best to look at other international examples such as Montenegro for precedents.

12:49 Comment From dougnechtansmere

We could share the vastly expensive and prestigious UK embassies but would it be in our financial interests to do so? - why not set up more modest but independent ‘houses’ with much lower running costs. If independence means anything we need to get away from being seen as a small appendage of the rest of the UK.

12:55 Jennifer Dempsie

I think there will be a stark contrast as to how a Scottish Foreign and Commonwealth Office runs to the current UK one.

The sort of FCO a sovereign Scotland would need is a very different one from the lavish approach adopted by the UK. Scotland won’t need luxury pads, but instead a working network that puts trade and growth as the top priority. We already have our network of Scottish Development offices across the globe which would be a good place to start with a focus on international business investment.

We can share when it makes financial sense to do so, but promoting Scotland’s interests to the world would be the priority.

If you look at the UK National Asset Reigster 2007 it shows multi-million £ office and residences across the world which I think is unnecessary particularly in today’s financial climate.

Paris office buildings and residences fit for a king are worth more than £80m and decked out in over £3m worth of antiques, silver and rugs. There are £40.6m of offices and residences in Hong Kong, £55.65m offices and residences in the US and, my personal favourite, there is the £5.3m official residence and £1.5m office in Buenos Aires to name a few....

12:56 Jennifer Dempsie

I should correct that - we have a network of Scottish Development International offices already, known as SDI which are to attract inward investment.

12:57 Comment From Guest

Scotland is not a member of the EU, why are you telling lies?

12:59 Jennifer Dempsie

Scots are already citizens of the EU and would remain so on independence. Scotland is part of the EU are we are currently part of the UK which is a member.

For some context Eamonn Gallagher, former Director General of the European Commission and EC Ambassador to the UN in New York said: “Scotland and the rest of the UK would be equally entitled to continue their existing full membership of the EU.”

The late Emile Noêl, first and longest serving Secretary-General of the European Commission said:

“Scottish Independence would create two new member states out of one. They would have equal status with each other and the other states. The remainder of the United Kingdom would not be in a more powerful position than Scotland.”

13:00 Comment From Fiona Peel

How would the NHS functon within an independent Scotland?

13:04 Jennifer Dempsie

The NHS is already devolved to Scotland and the Scottish Government have responsibility for running it.

Thankfully that is the case otherwise we would be in the sorry state of the English NHS where services are being threatened with privatisation under the Tory/Lib Dem government.

The NHS, education and our legal system are all run independently under the Scottish Parliament and will continue to operate as they do now. These are areas where the Scottish Parliament has a little independence and being successful but with full independence so much more could be achieved for Scotland across many more areas.

13:06 Jennifer Dempsie

That’s it folks!

Time to get back to the day job. Thank you so much for the interesting chat, some great questions and sorry I didn’t answer every question - I will practise typing faster for the next one.

Enjoy the snow...