Scottish independence: Salmond gives debt warning

Scottish First minister Alex Salmond. Picture: PA

ALEX Salmond has issued a stark warning that Scotland would walk away from the “entirety” of the UK £1.6 trillion debt if it is blocked from sharing the pound after independence.

The First Minister has launched an angry response to all three pro-union parties announcing today that the SNP’s plans for a sterling zone would be a non-starter.

George Osborne rejected the prospect of Scotland keeping the pound after independence in a speech in Edinburgh this morning. This position was quickly echoed by Labour and Liberal Democrats in statements.

The First Minister said: “This is a concerted bid by a Tory-led Westminster establishment to bully and intimidate - but their efforts to claim ownership of Sterling will backfire spectacularly in terms of reaction from the people of Scotland, who know that the pound is as much theirs as it is George Osborne’s.”

‘Concerns have been dealt with’

Mr Salmond insisted all the concerns raised by Mr Osborne have been dealt with in great detail by the independent Fiscal Commission Working Group set up by the Scottish Government which found a currency union is the best option.

“People in Scotland will not be fooled by the bluff, bluster and posturing of Osborne, Ed Balls and Danny Alexander,” he added.

“The reality is that a formal currency union with a shared Sterling area is overwhelmingly in the rest of the UK’s economic interests following a Yes vote, and the stance of any UK Government will be very different the day after a Yes vote to the campaign rhetoric we are hearing now.”

If Scotland loses the pound, it would cost firms south of the border “hundreds of millions of pounds a year” and blow a “massive hole” in their balance of payments, according to Mr Salmond.

‘Can’t default on debt that isn’t ours’

Salmond made it clear the UK would have to take on the full weight of its estimated £1.6 trillion national debt when Scotland is scheduled to become independent in March 2016 - unless Scotland gets its slice of “shared UK assets” like the currency.

He warned: “It would leave them having to pick up the entirety of UK debt.

“All the debt accrued up to the point of independence belongs legally to the Treasury, as they confirmed last month - and Scotland can’t default on debt that’s not legally ours. However, we’ve always taken the fair and reasonable position that Scotland should meet a fair share of the costs of that debt. But assets and liabilities go hand in hand, and - contrary to the assertions today, Sterling and the Bank of England are clearly shared UK assets.”

The SNP leader insisted today’s joint approach from the pro-union parties is a sign of panic.

He added: “It is the clearest signal yet that the Tory-led No campaign realise they are losing the arguments on the ground as they see the polls narrowing, and support for a Yes vote growing - a trend that today’s cack-handed intervention will only accelerate.”