Whilst, seventh, whatever is owing must be agreed to be due in Scottish pounds, fixed at independence.
Err, why should a foreign currency debt not be in the foreign currency?
So let me offer some rational comment on this situation.
This’ll be good, right?
There should also be common ground on another issue. And that is that there is actually already agreement that Scotland will have no liability for any of the debt of England, Wales or Northern Ireland (although for all practical purposes, this is English debt) if it chooses to become independent. We know this because the UK government issued a publication on this issue in 2014 under the title:
UK debt and the Scotland independence referendum
In this the UK government, based in London, said:
In the event of Scottish independence from the United Kingdom (UK), the continuing UK Government would in all circumstances honour the contractual terms of the debt issued by the UK Government. An independent Scottish state would become responsible for a fair and proportionate share of the UK’s current liabilities, but a share of the outstanding stock of debt instruments that have been issued by the UK would not be transferred to Scotland. For example, there would be no change in counterparty for holders of UK gilts. Instead, an independent Scotland would need to raise funds in order to reimburse the continuing UK for this share.
An entirely separate contract between the continuing UK Government and an independent Scottish state’s Government would need to be established. The respective shares of debt and the terms of repayment would be subject to negotiation.
In addition they said:
In the event of independence, the full spectrum of assets and liabilities – past, future and contingent – would need to be considered in negotiations between the continuing UK and Scottish Governments, on a case-by-case basis. This means that the negotiations would need to cover the arrangements for all forms of debt covered in this note, not just gilts and Treasury.
I think this really rather helpful because much of it summarises what appears to be legally, practically and politically both true, and necessary. In the process it resolves the first question. The UK government has said Scotland will not be liable for debts managed by London before independence. Instead anything owing is entirely down to negotiation.
Err, no, that’s not what has been said. Rather, to reassure the holders and buyers of gilts – where that’s not the BoE – they’ve said that the UK, or England if you prefer, will continue to honour them. That the UK, or England, will then go after the Scots. Rather than current holders of gilts having to watch their Scots share of the pile being inflated away by the porridge wogs.
That isn’t the same as declaring that there is no debt due by Scotland, it’s a comment about who to.
They say that the UK debt is as follows
He’s used gilts there, instead of the useful number from government accounts of total liabilities.
The rest of it is just the pursuit of verimine from a party that doesn’t recommend for it.