Scottish independence: SNP urged to come clean over credit rating

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.