[Closed] Scotland to help pay deficit - even if independence goes ahead

Listened to Danny Alexander explain on R5 how Scotland would be asked to help repay the deficit even if they became independent.

Pretty obvious that we'd take on what ever share of the national debt (subject to negotiations as to how it should be calculated) as it stood at the point of a Yes vote was along with any assets at the same time.

It could all get very interesting for Scotland's economy if Salmond refused ...

What do you mean? Care to elaborate?

Is it me or does Danny look like Beaker from the Muppets?

Not just you, but not really very relevant....

Sounds fair.

Debt or deficit? Sharing the repayment of debt seems to be generally accepted, although how exactly to calculate each nation's share of it does not yet seem to have been worked out. Defecit you can't repay. You borrow to cover it, then it becomes debt, then you repay it. Whether Scotland has one will depend on them.

[i]Listened to Danny Alexander[/i]

Well I'd give that a miss for a start. Likley to be the first sacrifice at the nnext lelection when the Lib dems try to get out of their Tory attachment.
Meantime, we either get to keep a share of the UK assets, or the UK gets to keep all the debt, which, remember, is in te name of UK, of which Scotland will no longer be part of so will have no legal obligation to pay.

[quote=matther01 ]Listened to Danny Alexander explain on R5 how Scotland would be asked to help repay the deficit even if they became independent.
This was covered in the Scottish Govt White Paper weeks ago and has been the policy position of the Yes campaign since it began. Expect some horse-trading on things like, oh I don't know, currency union?
[quote=ChubbyBlokeInLycra ] the UK gets to keep all the debt, which, remember, is in te name of UK, of which Scotland will no longer be part of so will have no legal obligation to pay.
This ^ is the important part and was the reason for the Treasury announcement today.

Apologies...should have been debt.

Financial lenders would likely hike lending rates to Scotland if they didn't help repay or went back on any deal to help repay if they were independent.

To be fair to Danny he did say Scotland could repay at very low rates.

I guess if the scots want to start their new country by walking away from their obligations then there's not much the english, welsh and northern-irish can do other than pick up the burden left by our friends in holyrood.

[i]Financial lenders would likely hike lending rates to Scotland if they didn't help repay[/i]

Repay what? Scotland has no outstanding debts. The UK owns all currnt debts. If the UK wants to keep the assets it claims to own, it gets to keep all the liabilities incurred in acquiring those assets. Scotland will not default on any debts, so no reason for a poor credit rating. Project Fear strikes again.

And the odious toad likes to bandy around worlds like responsible and bullying. This stems from the BS pretence that a currency is an asset (it's not, if anything strictly speaking its a liability) and hence if Scoltand is not automatically allowed to keep sterling, they would default on their debt liabilities (or at least threaten this). Some statesman, some responsibility??? So the Treasury has to make reassuring noises today to assure investors that all current debt would be honoured irrespective of the outcome of the vote.

They guy is an economist, so he can't even pretend to not know what he is doing. And he calls CMD arrogant!?!? Bloody weasel.

Scotland is such a big place with few people in it in relative terms, if they do decide to go the full independence route their taxes will likely rise a big way------ free perceptions, free university places-- it all has to be paid for! North Sea gas & oil is a finite resource so what happens when it all gone?

Spot on thm.

There is a perfectly legitimate debate how to split national debt if that becomes a necessity but no case to threaten default.

[i]walking away from their obligations [/i]
Again, what obligations? the Uk government incurred debt to acquire assets If we don't get a share of those assets why should we get a share of the debt incurred in acquiring them?
Of couse the UK government could start negotiations on how to split debt/assets but chooses not to.

[i]they would default on their debt liabilities[/i]

what debt liabilities would these be and why haven't you mentioned the assets that those liabilities were incurred to procure?

For one minute I thought Scotland was still part of the UK at the minute!!!! Scotland has still been supported by money from Westminster so why should it not share part of the debt. You cant have it both ways!!!!

Chubby bloke - start at page 71 in the book of dreams. Even salmond doesn't pretend that Scotland doesn't/won't have debts. It comes from a BS argument when he got caught with his pants down over assuming (not for the first time) something that can't be assumed - in this case, that Scotland would have automatic choice over using sterling.

The correct question is what are the assets you are talking about, A currency is not and never has been an asset.

free perceptions

Are the tories going to tax all perceptions, or only perceptions different from their own 😉

Fine, but only when you've given our £398,085 & 10s back

with inflation and interest since 1707 😉

[quote=teamhurtmore ]It comes from a BS argument when he got caught with his pants down over assuming (not for the first time) something that can't be assumed - in this case, that Scotland would have automatic choice over using sterling.
Scotland [i]does[/i] have automatic choice over using Sterling. As does every other independent country. 🙄

The tories will Tax anything anything ha ha !!!!!!

I wouldn't worry about the University places. If Scotland gains independence the universities in Scotland would essentially cease to function overnight, so you couldn't get a place worth having even if you wanted one. This is particularly true for the major research led institutions (Edinburgh, Glasgow, Dundee, St Andrews, Aberdeen) who rely on research income to support their teaching capacity.

Not fear mongering, I know for a fact that the one I work at doesn't really have a plan for what would happen in the case of independence because it would be so cataclysmic to the entire sector, and there are so many unknowns (or SNP unspokens), as to render all planning meaningless.

The Scottish University sector is not a cheery place at the moment.

[i]For one minute I thought Scotland was still part of the UK at the minute!!!! Scotland has still been supported by money from Westminster[/i]
We'll ignore Scotland being a net contributer so actually supporting Westminter, not the other way round, shall we?

[i]start at page 71 in the book of dreams. [/i]
Page 1, book of facts. All current UK debts are incurred in the name of the UK governemt. Scotland will have no debts. Scotland will also have no assets, and will buy those state assets by assuming some of the UK debt. We don't get the assets, we don't take on the debt. Really, how hard is that to understand, even for you?

If Scotland is so rich & is a net contributor to Westminster then why has it accepted the money that has flowed its way for years from Westminster?????

[i]The correct question is what are the assets you are talking about[/i]
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Scotland's desire to use sterling [u]requires approval.[/u] It is not automatic. That is simply not true and Salmond knows that.

Odd that the book of dreams has a whole chapter on the debt issue if they don't exist. I know there are lots of white lies in there, but even Salmond wouldn't go that far.

thm, he was on the radio this morning saying that Scotland had no legal responsibility to take on UK debt, but suggested that Scotland may take some almost as a favour. Alistair Darling made the point you did regarding the pound not being a divisible asset in the ordinary sense. I don't see as big issues with Scotland entry to EU and open borders as I do with trying to forge a currency union.

Surely this would require Scotland to have some say over rUK policy and vice versa, similar to scrutiny within the Euro zone?

I did laugh during Dear leader interview on R4 repeatedly stating the Bank of England was founded by a Scot,

Dear Leader - "The Bank of England was founded by a Scot"
Weary Presenter - "You have already said that. You keep bandying it about as if it actually matters"
Dear Leader -"erm???? I was only saying.

[i]If [s]Scotland[/s] England is so rich and is a net contributor to Westminster then why has it acicepted the money that has flowed its way for years from [s]Westminster[/s]Scotland????? [/i]
Why are you so desperate not to lose Scorland from what little reamins of your empire? After all, the economy is so screwed you're lookimg at cuts left, right and centre. Surely losing a whole country as a liability is a good thing? Unless said country isn't actually a liability, you just want the popukatoim to believe they are so you get to benefit from their net contributions?

I don't see the link between debt and accets. I may be wrong but surely the debts aren't secured against any assets. Has not most of the debt money come from paying for things such as services, intrest on debt etc etc, that's not to say some of it hasn't bought "things" I just thought most of it didn't.

I'm not for or against you getting independence, your big enough to make your own decisions. I just hope it's one you can live with either way. For me (Welsh) on one hand it would be sad to see you go, I'm sure we'd all get over it. But on the other I would really like to see what happens, also we can have a good look who's argument about the concequences was right. Although I suspect one fact will be true, that being the act of separation will cost everyone a shed load of money as anything that involves lawyers always does.

We'll ignore Scotland being a net contributer so actually supporting Westminter, not the other way round, shall we?

This only holds true if you assume that Scotland, rather than the UK, has owned all the north sea oil and gas since it was discovered (even the SNP admit this part). If, as seems fair at the moment, you apportion north sea revenue on a UK per capita basis Scotland has paid about the same tax per capita but has had more spent on it per capita than the rest of the UK. So on a per capita basis Scotland is a net drain on UK finances.

Assets: Not just the expensive shooty things but the roads, schools, hospitals, police, etc...................

The whole mechanism that is required for Scotland to keep sterling makes a mockery of the notion of economic independence. Scotland would have been less influence over macro policy that (it thinks) it has now.

[i]So on a per capita basis Scotland is a net drain on UK finances. [/i]
so you'll be better off without us then? what's the problem?
And well be better off without subsidising you. win win

The correct question is what are the assets you are talking about

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[i]This only holds true if you assume that Scotland, rather than the UK, has owned all the north sea oil and gas since it was discovered (even the SNP admit this part).[/i]
so scotland IS a net contributer then?

Buckfast is produced in Devon, what's your point caller?

[quote=teamhurtmore ]The whole mechanism that is required for Scotland to keep sterling makes a mockery of the notion of economic independence. Scotland would have been less influence over macro policy that (it thinks) it has now.
It currently has none. You can't get less than zero.

Almost but not quite. Worse than zero is having policy imposed on you that is directly opposed to your needs. That is negative and therefore less than zero. Ask anyone in the periphery.

all the debt, which, remember, is in te name of UK, of which Scotland will no longer be part of so will have no legal obligation to pay

If you apply this logic then Scotland has no automatic right to North Sea Oil. All of the international agreements carving up the north sea were made in the name of the UK govt

Its Shetland's oil

Salmond derides the Tories economic policy and the cuts associated with austerity etc. And yet under his plans and without an independent lender of last resort, he would be required to match them under a stability pact and without having any say on how far or fast that fiscal austerity would be. Absurd.

As McCrone puts it (but with a slightly different idea of your own central bank and lender if last resort)

The lesson I draw from this is that an independent Scotland could not continue to use sterling as if nothing had changed. A lender of last resort would be required to deal with speculative pressures and possible crises. This would require a Scottish Central Bank and it should issue its own currency, which could be pegged to sterling. If a Scottish Government did not always want to accept policies decided for the rest of the UK and objected to oversight of its fiscal policy by authorities in London, its exchange rate could be altered. The possibility that this might happen, however, could affect the price and rate of interest of Scottish Government bonds.

All of this just goes to show that the declared option of staying with sterling would be far from a simple matter for an independent Scotland, and how that is dealt with would have major implications for the economy. There is a good deal to be considered and explained before we vote in the referendum.

The answer is not in the book of dreams (on which note, it's time for my dreams. Good night!)

[i]If you apply this logic then Scotland has no automatic right to North Sea Oil. All of the international agreements carving up the north sea were made in the name of the UK govt [/i]
..ams if CMD wasn' so scared of negotiating th post independance situation, that would be under negotiation right now. But he is, so the oil is in what may become Scottish waters, so it's ours.

Almost but not quite. Worse than zero is having policy imposed on you that is directly opposed to your needs. That is negative and therefore less than zero. Ask anyone in the periphery.

So on a per capita basis Scotland is a net drain on UK finances.

so you'll be better off without us then? what's the problem?
And well be better off without subsidising you. win win

I didn't say England would be better off without Scotland (BTW I live in Dundee just in case you think I'm writing this from Westminster). I said that "on a per capita basis Scotland is a net drain on UK finances". I firmly believe that the rest of the UK [u]and[/u] Scotland will suffer if a yes vote happens. There will be no winners.

This only holds true if you assume that Scotland, rather than the UK, has owned all the north sea oil and gas since it was discovered (even the SNP admit this part).

so scotland IS a net contributer then?

Read what I wrote. Now read what you wrote. The UK is what exists at the moment therefore all taxation and spending exists in the context of the UK. If and when the two countries go their separate ways then, and only then, does taxation and spending become a Scotland/rest of UK issue. As for who owns what of the north sea gas and oil - where do you think the money to get it all going came from? Yep, you guessed it, the UK coffers. So it is a whole UK issue.

So in short; Scotland is not currently a net contributor to the UK economy on a per capita basis.

Gowrie - Member

Its Shetland's oil

Why are you so desperate not to lose Scorland from what little reamins of your empire?

It may come as a surprise to you ChubbyBloke but from my experience as a Scot living in England for the last 25 years most English couldn't give a sh!t whether Scotland is part of the union or not. Most English I've spoken to about this just say well if they want independence why don't they just get on with it?