Scottish Government
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First Minister on treasury debt plan

FM 'Treasury recognises common sense approach of Fiscal Commission'

Responding to the Treasury’s confirmation that it will honour all of the UK’s debt in the event of a vote for independence in the referendum First Minister Alex Salmond said:

"This is recognition that the Treasury are starting to come to terms with reality - they have issued the debt and therefore have the responsibility for it.

“This is a case of the Treasury being hoist on their own petard as they have effectively endorsed the common sense approach proposed by the Fiscal Commission a year ago and that we outlined in the Scotland's Future paper published last November. These documents make clear that we remain prepared to negotiate taking responsibility for financing a fair share of the debts of the UK provided of course Scotland secures a fair share of the assets, including the monetary assets.

“Any market uncertainty in the gilts market has been caused by their own refusal to discuss the terms of independence before the referendum and it is their own insistence that Scotland would be a new state that lands them with the unambiguous legal title to the accumulated debts of the United Kingdom. That position is now beyond argument and today’s announcement makes clear that Scotland would be in an extremely strong negotiating position to secure that fair deal.

“The UK Government would be well advised to stop all the bluff and bluster around these matters and accept our offer of sensible discussions. There is a great benefit in being responsible and following the approach of the Edinburgh Agreement in letter and in spirit.

“On the issue of the currency, for example, they should listen to the overwhelming majority of the people of England who polls indicate see the common sense of sharing a common currency. The people know that it would be in the interests of both Scotland and the rest of the UK to do so - that it would be ‘logical’ and ‘desirable’ as Alistair Darling said last year before he got caught up in campaign fever.”

Notes to editors

Scotland’s Future (page 348-349) published 26th November 2013

The Fiscal Commission looked in detail at options for transferring debt to Scotland376. Following that consideration, the Scottish Government does not envisage that a proportion of UK debt would be legally transferred to Scotland on independence, since this is likely to require the agreement of lenders and would introduce unnecessary complexity.

Instead, the Scottish Government envisages that the two governments, once Scotland's share of the UK debt has been set, will establish arrangements under which the servicing costs of this share is met by the Scottish Government.

The average maturity of UK debt at present is about 15 years. The longest dated UK debt is for 60 years. It will be for the governments to agree the maturity profile of UK debt so that the Scottish Government refinances our agreed share of the UK debt as it matures, based on the overall maturity profile of UK debt, as part of a planned programme of borrowing. Over time, therefore, the full amount of UK debt apportioned to Scotland will become the responsibility of the Scottish Government. At that point, Scotland will cease financing UK debt.

The Fiscal Commission Working Group first report can be found at, published 15th February 2013

A Panelbase poll of 1011 people conducted between the 13th and 20th December 2013 found overwhelming support for a common currency.
Asked “Scotland and the rest of the United Kingdom are among each other's largest trading partners. Putting aside your own views on whether or not Scotland should become an independent country, if independence does happen do you think that Scotland and the rest of the UK should continue using the pound in an agreed sterling area?

Yes, definitely: 46%
Yes, I think so: 25%

Not sure: 16%

No, I don't think so: 7%
Definitely not: 5%

The poll breakdown shows that 81 per cent of Labour voters in the rest of the UK back a sterling area, 66 per cent of Conservative voters, and 75 per cent of Lib Dem voters.