Deficit on the referendum

[Green Cabbage 7]

Hi I'm no economist but as we have heard we probably would start of with a 6billion deficit depending on who you believe, but as we are just now are we not 1.3 trillion in debt anyway! Now what I want to know is if we go what is the ramifications for the rest of the UK? Will it be worse for them taking our resources away or better?

[Just Alf]

Hi I'm no economist but as we have heard we probably would start of with a 6billion deficit depending on who you believe, but as we are just now are we not 1.3 trillion in debt anyway! Now what I want to know is if we go what is the ramifications for the rest of the UK? Will it be worse for them taking our resources away or better?

I'm expecting this to be moved into the HG :wink:

But in answer to your question, it's precisely this debt and the servicing of it that makes Salmond argue that a formal currency union is best for both parties. On one hand it's just simpler/cheaper for everyone and on the other the existing UK debt will continue to be covered by both rUK and iS and of course the oil resources will remain as one of the underpinning elements supporting the currency which in turn has a major effect on the interest rate on that debt (lose that and it's rUK who will be heading into serious trouble interest rate wise initially)

[seanshow]

A tenuous link to your post....but remember when this was released -

Freedom of information act reveals Scotland would have had wealth of the radar. :wink:

http://www.independent.co.uk/news/uk/this-britain/how-black-gold-was-hijacked-north-sea-oil-and-the-betrayal-of-scotland-518697.html

http://en.wikipedia.org/wiki/McCrone_report


I don't trust these people, Yes Scotland for me.

[Hibs7]

And you trust what Salmond says ... rofl

[The_Exile]

The only politician I trusted was Margo. She was a yes voter, and after doing my own research I'm a yes voter. I think if people are basing their decision on purely what politicians are coming out with, then IMO doing themselves a bit of a disservice.

[CropleyWasGod]

The only politician I trusted was Margo. She was a yes voter, and after doing my own research I'm a yes voter. I think if people are basing their decision on purely what politicians are coming out with, then IMO doing themselves a bit of a disservice.

Indeed.

One of the reasons I'm voting Yes is because the 2-party, first-past-the-post, remote, adversarial Westminster system is broken. The public have lost their faith in politicians; as a result, we're not voting, as a result of which we're getting the Governments we deserve rather than the ones we need.

What we need is accountability....of the politicians to the electorate, and vice versa.

The past 6-12 months have taught me that, when people feel their vote is important, they engage with the process. That engagement can be brought about by extension of the Scottish Parliament, with its co-operative PR model and its closer proximity to the people. Only through that can we get some of the trust (and, indeed, love) that people had for the likes of Margo.

[Moulin Yarns]

The only politician I trusted was Margo. She was a yes voter, and after doing my own research I'm a yes voter. I think if people are basing their decision on purely what politicians are coming out with, then IMO doing themselves a bit of a disservice.

Well said that man. I saw somewhere that research has shown that those people who are better informed, i.e. have gone out of their way to find out their own information, are voting YES. :thumbsup:

[JeMeSouviens]

Hi I'm no economist but as we have heard we probably would start of with a 6billion deficit depending on who you believe, but as we are just now are we not 1.3 trillion in debt anyway! Now what I want to know is if we go what is the ramifications for the rest of the UK? Will it be worse for them taking our resources away or better?

(You probably know this but I'm constantly amazed by the amount of people who don't: deficit is the amount by which you are increasing your debt year on year, not the overall total debt. A £6Bn deficit for 5 million people in the aftermath of a recession is actually not so bad when you consider the 2013-14 UK deficit was almost £110Bn for 60 million.)

For the rest of the UK, probably about the same. Including oil, we contribute more per head to the UK than average but because of Barnett* we get more identifiable per-head spending**. For most recent years, we contribute a bit more than we get back but not by a huge amount and when averaged over the scale of rUK, it's not enough to make a significant difference to them.


* our current Barnett extra spending is by accident not design because it still uses population multipliers derived in the 70s. Since then, Scotland's population has only grown very slightly whereas the rest of the UK's has grown quite a lot. Wales and some English regions get a really bad deal because of this, Scotland and NI do well. It's obviously unfair, so expect it to change post-No to bring Scotland/NI spending down.

** non-identifiable spending is much harder to quantify but because spending on the military and big projects like HS2 mainly happens in England, we probably get a slightly worse deal out of it.

[PeeJay]

Hi I'm no economist but as we have heard we probably would start of with a 6billion deficit depending on who you believe, but as we are just now are we not 1.3 trillion in debt anyway! Now what I want to know is if we go what is the ramifications for the rest of the UK? Will it be worse for them taking our resources away or better?

You've got things mixed up I think - the UK's debt is 1.3 trillion pounds, therefore an iScotland would have to assume a portion of that debt equivalent to the Scottish share of the UK population (8-9%) - so you are looking at a figure of roughly 126 billion - quite a difference to your figure. The debt is important here NOT the deficit. Apparently this debt would account for 72% of Scottish GDP (according to - Scottish government's independent Fiscal Working Group.) (The UK is currently at 80%+). Maybe you were referring to the annual interest payment on servicing that debt (roughly 6 billion)?

As you may know, the "free and fairer" iScotland has already threatened to renege on any obligation to accept that share of the debt (if the UK choses not to enter into formal currency union with Scotland - extremely unlikely IMO) Seems "independent" Scotland wants to use "another country's" currency, and its central bank (BoE) as lender of last resort, so if Scotland gets into trouble the UK can bail it out (so much for independence!). Refusing to accept a share of the debt would be disastrous for iScotland as who on the financial markets would lend money to a "new" country that refuses to honour its debts?

[JeMeSouviens]

You've got things mixed up I think - the UK's debt is 1.3 trillion pounds, therefore an iScotland would have to assume a portion of that debt equivalent to the Scottish share of the UK population (8-9%) - so you are looking at a figure of roughly 126 billion - quite a difference to your figure. The debt is important here NOT the deficit. Apparently this debt would account for 72% of Scottish GDP (according to - Scottish government's independent Fiscal Working Group.) (The UK is currently at 80%+). Maybe you were referring to the annual interest payment on servicing that debt (roughly 6 billion)?

As you may know, the "free and fairer" iScotland has already threatened to renege on any obligation to accept that share of the debt (if the UK choses not to enter into formal currency union with Scotland - extremely unlikely IMO) Seems "independent" Scotland wants to use "another country's" currency, and its central bank (BoE) as lender of last resort, so if Scotland gets into trouble the UK can bail it out (so much for independence!). Refusing to accept a share of the debt would be disastrous for iScotland as who on the financial markets would lend money to a "new" country that refuses to honour its debts?

This line gets parroted by political types all the time but I'm not actually sure there's much truth in it. If I was lending someone money, I'd be happier I was going to get paid back if my debtor *wasn't* offering to use some of their money to pay a big slice of a debt they're not liable for. Interest rates on Scottish government bonds would reflect the market's perception of its ability to pay, there's no honour in financial markets.

[NAE NOOKIE]

You've got things mixed up I think - the UK's debt is 1.3 trillion pounds, therefore an iScotland would have to assume a portion of that debt equivalent to the Scottish share of the UK population (8-9%) - so you are looking at a figure of roughly 126 billion - quite a difference to your figure. The debt is important here NOT the deficit. Apparently this debt would account for 72% of Scottish GDP (according to - Scottish government's independent Fiscal Working Group.) (The UK is currently at 80%+). Maybe you were referring to the annual interest payment on servicing that debt (roughly 6 billion)?

As you may know, the "free and fairer" iScotland has already threatened to renege on any obligation to accept that share of the debt (if the UK choses not to enter into formal currency union with Scotland - extremely unlikely IMO) Seems "independent" Scotland wants to use "another country's" currency, and its central bank (BoE) as lender of last resort, so if Scotland gets into trouble the UK can bail it out (so much for independence!). Refusing to accept a share of the debt would be disastrous for iScotland as who on the financial markets would lend money to a "new" country that refuses to honour its debts?

That's the thing though isn't it. It seems that an independent Scotland will be expected by the UK to accept its share of the ***** while every effort will be made to deny it a taste of the sugar.

If Scotland refused to pay any of the UK debt the reasons for that would be well known worldwide ..... I'm not sure how that could be viewed as making Scotland a bad risk in its future dealings. These guys don't lend money out of the goodness of their heart. All they care about is can you pay the money back and will you pay it back. In these circumstances I would bet Scotland will still be viewed as a good risk .......... Greed will prevail.

[PeeJay]

This line gets parroted by political types all the time but I'm not actually sure there's much truth in it. If I was lending someone money, I'd be happier I was going to get paid back if my debtor *wasn't* offering to use some of their money to pay a big slice of a debt they're not liable for. Interest rates on Scottish government bonds would reflect the market's perception of its ability to pay, there's no honour in financial markets.

That doesn't actually sound at all plausible in this instance ... Scotland is liable for its share of the UK debt - why would you be suggesting otherwise?

How does this unwillingness to honour its debt obligations tie in with Salmond's and the Yes campaign's oft repeated notion of a "fairer society" - there may be no honour in the financial markets as you say, but the financial institutions and banks in general are (since the 2008 FC) very wary of lending money - maybe you haven't noticed? Why would anybody - in this economic climate - take a risk on a new country that has already demonstrated that it doesn't honour its debts? How would that failure (something the UK has never done) sit with the populace of the new nation, I wonder?

[PeeJay]

That's the thing though isn't it. It seems that an independent Scotland will be expected by the UK to accept its share of the ***** while every effort will be made to deny it a taste of the sugar.

If Scotland refused to pay any of the UK debt the reasons for that would be well known worldwide ..... I'm not sure how that could be viewed as making Scotland a bad risk in its future dealings. These guys don't lend money out of the goodness of their heart. All they care about is can you pay the money back and will you pay it back. In these circumstances I would bet Scotland will still be viewed as a good risk .......... Greed will prevail.

Are you saying you don't think Scotland should honour its share of the debt? As to the taste of the sugar - iScotland will have to get used to negotiating with countries: there are quite a few in the EU for example - one UK shouldn't be too difficult to manage surely?

As to the risk: can you pay back? (Maybe/maybe not) - will you pay back? (Maybe/maybe not) - show me the bank that thinks that is a good risk!

[NAE NOOKIE]

Are you saying you don't think Scotland should honour its share of the debt? As to the taste of the sugar - iScotland will have to get used to negotiating with countries: there are quite a few in the EU for example - one UK shouldn't be too difficult to manage surely?

As to the risk: can you pay back? (Maybe/maybe not) - will you pay back? (Maybe/maybe not) - show me the bank that thinks that is a good risk!

None of these other countries will be expecting us to take on a share of a huge debt all the while kicking us in the baws. The debt would have been accrued prior to independence, we would have shared the pound for 300 years prior to independence. In what way then in any sense does that give Westminster the right to expect us to take on debt accrued as part of the UK and at the same time refuse us access to the previously shared currency.

Why would anybody with any sense agree to their part of the pain and allow the other party all of the pleasure .... when both were owners at the start ...... you would have to be mental.

I highly doubt world banking would give as much weight to 'maybe not' as you think they would. Apart from the fact that the non payment would be well documented as the result of an international dispute, not Scotland's inability to pay it, the debt is the UK's not an independent Scotland's ..... I have little experience of the banking world ........ I am super confident in the power of greed.

[southsider]

Nearly everyone, wheather YES or NO is talking about the vote. People who are of the " why bother thur aw the same " are taking sides in this. I expect the turnout to be really high, perhaps around 85% and i think (but hope i am wrong), NO will just do it.

[Beefster]

"Professor Boyle told us it was “nonsense” to suggest that his legal opinion implied that the rest of the UK would be “obliged to hold on to all of the debt”.

He told FactCheck: “Scotland would have to negotiate its share of the national debt. It is a negotiation and it will have to be a hard-headed one.”

Of course, the government of a newly independent Scotland could try to refuse to take any of the debt on board as a bargaining position, but the chancellor could be equally confrontational about dividing state-owned assets between the two countries.

The one thing we can say for sure about a “yes” vote is that there would have to be intense negotiations between Holyrood and Westminster. There are few certainties about the outcomes."

http://blogs.channel4.com/factcheck/factcheck-can-scotland-avoid-paying-uk-debt/13362

[Just Alf]

That doesn't actually sound at all plausible in this instance ... Scotland is liable for its share of the UK debt - why would you be suggesting otherwise?

How does this unwillingness to honour its debt obligations tie in with Salmond's and the Yes campaign's oft repeated notion of a "fairer society" - there may be no honour in the financial markets as you say, but the financial institutions and banks in general are (since the 2008 FC) very wary of lending money - maybe you haven't noticed? Why would anybody - in this economic climate - take a risk on a new country that has already demonstrated that it doesn't honour its debts? How would that failure (something the UK has never done) sit with the populace of the new nation, I wonder?

just catching up....
"Scotland is liable for its share of the UK debt - why would you be suggesting otherwise?" I thought the UK Treasury announced to the markets that they and not a new iS were directly liable for all UK debt (essentially to strengthen the successor state legal argument)

&

"How does this unwillingness to honour its debt obligations tie in with Salmond's and the Yes campaign's oft repeated notion of a "fairer society""
That's the opposite reality though? the YES position is very clearly stated that they want to pay a fair share of the current debt.

I will add the the word "fair" will be pivotal in deciding where on the scale between 0% and 100% (or even more for the right deal?) of deemed Scottish debt that will be. BOTH Westminster and the iS Negotiating coalition will obviously impact on that final number.