Scottish independence: Debt threat ‘chilling’ - PM

Prime Minister David Cameron. Picture: Getty Images
Prime Minister David Cameron. Picture: Getty Images
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DAVID Cameron has described Alex Salmond’s threat that an independent Scotland may not share the UK’s debt as “the most chilling thing” he has heard in the independence debate.

The Prime Minister warned that not honouring Scotland’s portion of the UK’s £1.6 trillion debt would lead to punitive interest rates in Scotland. The warning came in the House of Commons, where Mr Cameron also attacked the First Minister on the key issue of the NHS.

As tensions over the referendum spilled into Prime Minister’s Questions, Mr Cameron came under fire from a senior Tory backbencher who accused him and the other main party leaders of being “too complacent” over the result on

18 September as polls this week showed support for Yes just six points behind No.

Sir Edward Leigh said a Yes vote would be “a disaster for Scotland” and the Prime Minister, Labour leader Ed Miliband and Lib Dem Deputy Prime Minister Nick Clegg need to “stand shoulder to shoulder” with those in Scotland working to prevent independence.

Mr Cameron’s criticism of Mr Salmond’s economic policy came as Wall Street bank Goldman Sachs warned an independent Scotland could face a eurozone-style crisis and suffer public service cuts and higher borrowing.

A report by Goldman senior economist Kevin Daly said leaving the UK could have “severe consequences” for both the Scottish economy and the UK overall. Goldman Sachs also said that uncertainty over currency would lead to capital flight.

Mr Cameron expressed his concerns when he was asked by Labour’s Glenrothes MP Lindsay Roy about Mr Salmond’s threat to not share the UK’s debt if the rest of the UK does not agree to a formal currency union.

Mr Cameron said: “One of the most chilling things that has been said in the referendum campaign is that a separate Scotland would consider defaulting on its debts.

“We all know what happens if you do not pay your debts – no one will lend you any money unless you pay a punitive interest rate. We all know what that means for homeowners – much, much higher mortgage rates. For businesses, it means crippling interest rates.”

Mr Cameron’s concerns were echoed in an article published today on The Scotsman website by the former deputy governor of the Bank of England Sir Andrew Large and Sir Martin Jacomb, the former chairman of Prudential. The two men said that Mr Salmond’s threat was “shabby” and would lead to higher mortgage rates. Earlier, former health secretary Andrew Lansley asked the Prime Minister about Yes Scotland’s focus on fears that the NHS would be destroyed if Scotland remains in the UK.

Mr Lansley pointed out that spending on the NHS has been protected from austerity measures and funding has increased by £17 billion since the coalition was formed, which means an extra £1.7bn for Scotland.

He said: “Does this not give the lie to Alex Salmond’s propaganda against the NHS?”

Mr Cameron replied: “My right honourable friend is absolutely right. Because of the decisions we took to increase spending on the health service, that has given extra money for Scotland to spend on the NHS.”

He went on: “His second claim that, somehow, a Westminster government could privatise parts of the NHS in Scotland is complete and utter nonsense.

“The only person who could privatise parts of the NHS in Scotland is Alex Salmond.”

Mr Salmond hit back at Mr Cameron, who he said had “ramped up” the UK government’s stance on the debt issue because he was losing the referendum campaign.

Speaking during a campaign visit in Kilmarnock, Mr Salmond described the Tory leader’s comments as “high-decibel anxiety”.

“It was aggressive, but he’s obviously anxious. He’s getting more aggressive the more feart he gets,” Mr Salmond said.

“Mr Cameron is feart about meeting people with different points of view to him. He’s ramped it up because he’s under pressure.

“Our position is wholly responsible. If we are stopped from having a share of the Bank of England’s assets then we have no legal or moral obligation to accept liabilities. The legal position is crystal clear and there is no question of a default.

“The Prime Minister needs to cool down and stop being so anxious.”

Meanwhile, in the Commons, Mr Cameron was asked by the SNP’s Angus Robertson why he had not kept a promise to appear on STV to field questions from undecided voters.

Mr Cameron claimed he had offered STV a date and a format, claiming that the broadcaster had “run away themselves”.

Later, the broadcaster released a statement saying that, during negotiations, Downing Street had insisted that the Prime Minister should not be interviewed by STV News political editor Bernard Ponsonby – a condition that the channel was not prepared to meet.


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