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Independent Scotland faces immediate £23bn debt to UK

A leading economic think tank has warned an independent Scotland would have to make an immediate £23bn debt repayment to the UK Treasury, reports The Guardian.

In a discussion paper published this week, the National Institute for Economic and Social Research examines the Scottish government’s promise to repay its share of the UK’s debt, which the think tank expects to hit £1.7trn by 2015/16.

That calculation would result in Scottish obligations of £143bn and according to the Whole of Government Accounts, £224bn of the UK market debt is due for repayment within one year.

On the basis that an independent Scotland would assume a population share of that debt. NIESR calculates the first year obligation to the UK Treasury would total £23bn in repayment and interest.

That figure would represent 35 per cent of the £65bn public spending in Scotland by the Scottish and UK Governments for 2012-2013, according to Treasury accounts.

A Scottish government spokeswoman told the newspaper NIESR’s analysis was mistaken and “misunderstands how Government works and reflects short-term borrowing not long-term debt repayments.”

She added: “The people of Scotland already pay their share of UK debts through taxes every year and any debt repayments to be made by an independent Scotland will be agreed as part of a fair negotiation over assets and liabilities.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. The U K debt has been building forever so why do they think they can just walk away from their fair share ?

  2. Scotland was bankrupt when it joined and would be bankrupt if it left. Certainly can’t be “Independent” and keep the pound. What sort of Independence would it be with another country setting your tax rates and interest rates ? Madness distraction.

  3. Or they can just do what any government does when a big repayment is due, and issue more bonds to cover it. Why is this even news?

  4. Can’t help thinking if …

    UK Chancellor George Osborne has said a vote for Scottish independence would mean walking away from the pound …

    then maybe the calculations do or don’t end up with 23bn … but if Mr Osborne is to be believed, then it can’t be in £’s, can it?

  5. I think the story here is about Westminster not being able to balance the books rather than anything to do with Scotland. The 23bn is obviously short-term debt they’re continually rolling over. Will there be a follow up paper about the 207bn that the rest of the UK needs to find for next year? No. No there won’t.

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