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Treasury gives debt pledge on independent Scotland

The Treasury is to pledge to guarantee all of Britain’s £1.2trn debt even if Scotland were to vote in favour of independence.

The Financial Times reports the announcement, expected later today, is an attempt to prevent creditors from pushing up the cost of Government borrowing ahead of Scotland’s referendum in September.

It is feared market jitters about an independent Scotland’s ability to service its share of the debt could raise gilt yields in the coming months.

According to the FT, the Treasury will still expect Scotland to pay its share of the debt and to reimburse the rest of the UK directly.

Scotland has previously said it would take responsibility for servicing and refinancing a fair share of UK debt.

But Scottish first minister Alex Salmond has said willingness to take on UK liabilities would depend on Scotland also gaining a fair share of UK assets.

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