Despite a share of £100bn debt, post-referendum Scotland would still be ok and have lower repayments than its UK counterparts, says Debt Solutions Company Scottish Trust Deeds.
An independent study by the David Hume Institute showed that Scotland would be given very little in the way of assets as a consequence of independence and its share of apportioned debts would completely outstrip this. Scotland could be left to take up anything between £83.5bn and £102bn, although experts have predicted that due to the worsening crisis in the UK Scotland’s share could expand by another £35bn by the time of the SNP referendum in 2014. However, according to the Institute’s report, as long as Scotland received all of the North Sea oil revenues, it would actually have a lower burden of debt overall than the whole of the UK.
A spokesperson for Finance Secretary John Swinney said: “These figures confirm that Scotland is in a stronger financial position than the UK as a whole, and that an independent Scotland will have lower public sector debt than the UK.”
However, not everyone is convinced by this line of argument and maintain that until the oil revenues are confirmed as Scotland’s, the plan for independence is not sound.
Scottish Labour’s shadow cabinet secretary for finance, Ken Macintosh MSP, said: “The very fact this analysis has come up with a number of different scenarios reinforces the uncertainty that surrounds separation. Some are more favourable that others, but all rely heavily on one single, volatile commodity – oil. I don’t want to gamble with Scotland’s future, I don’t want to see Scotland’s future based solely on oil alone.”
The Institute put forward a number of scenarios that could occur post-referendum, one of which was that with North Sea oil revenues in the coffers the public sector debts of Scotland would be 52.2% of its annual £159bn GDP. The equivalent figure for the UK would be 64.6%. However, if the revenues were not part of the independence deal, this would rise steeply to 66% of GDP, higher than the UK.
A spokesperson for Debt Solutions Company ScottishTrustDeed.co.uk, said: “The report highlights a lot of uncertainties around the likely finances of post-referendum Scotland, and as a first attempt at working out the figures it has been an important exercise for the Institute to do. While each side has used aspects of the report to argue for and against, the simple fact is that until the time of the referendum in 2014 nothing is clear or settled.”
“The UK has £2tr of public sector debt, pension costs, PFI payments and liabilities to cover, but only around £821bn of assets. Given that the last comment from a Whitehall source was that: ‘Scotland and all the UK benefits from risk sharing and cost sharing together,’ it could be that the revenues from the North Sea oil fields end up being shared equally between all parties.”
“That could really deal a blow to the case for an economically viable independent Scotland,” concluded the spokesperson.