Scottish independence: Alexander blasts debt threat

Danny Alexander has called on SNP ministers to withdraw their threat for an independent Scotland to “renege” on its share of UK debt if a currency union is blocked after a Yes vote.

Danny Alexander has called on the SNP to withdraw their debt threat. Picture: Greg Macvean
Danny Alexander has called on the SNP to withdraw their debt threat. Picture: Greg Macvean

The Chief Secretary to the Treasury made the call in a letter to Scottish finance secretary John Swinney demanding the withdrawal of the SNP’s “bogus” debt threat.

The UK cabinet minister, prominent figure in the debate, has attacked what he claimed was the “most irresponsible claim of your entire campaign”.

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Mr Alexander accused Mr Swinney of “grandstanding” on the issue as he suggested the plan would lead to a sharp rise in interest rates in an independent Scotland.

In his letter, Mr Alexander said: “This week you have confirmed your position that the first economic policy of an independent Scotland would be to renege on the debts that have over generations funded public services and built schools, hospitals and more in Scotland.

“This is an extraordinary position and perhaps the most irresponsible claim of your entire campaign.

“I am writing to ask that you withdraw it – this is for the benefit of all Scots, who do not deserve to pay for your grandstanding.

“The threat to renege on our debts is really a threat to make every Scottish household pay the price for your failure to assemble a credible economic case for independence.

“The most important and damaging effect of an independent Scotland reneging on our debts will be the impact on individuals, families and businesses all over Scotland.”

First Minister Alex Salmond said he will “certainly not” withdraw, insisting Scotland cannot default on a debt it is not legally liable for and would have no moral obligation to pay without a share of Bank of England assets.

He said: “You can’t have a default when we already know as a matter of fact that there is no default, because the contractual legal liability lies with the UK government.

“But can I just come on to the moral aspect of this?

We’re putting forward an argument that we should share assets and liabilities, which is a wholly responsible position.

“Clearly, if Danny Alexander wants to take all of the assets then he gets stuck with all of the liabilities, which is why our reasonable position is much better.”