Independence Referendum

[DungBeetle]

"BBB or above, they then later state: "Scottish wealth levels are comparable to that of the U.K. ('AAA'), Germany
('AAA'), Ireland ('BBB+'), and New Zealand ('AA-'). Even excluding North Sea output and calculating per capita GDP
only by looking at onshore income, Scotland would qualify for our highest economic assessment. Higher GDP per
capita, in our view, gives a country a broader potential tax and funding base to draw from, which supports
creditworthiness""

I don't see how you can make the leap that because Scotland has similar GDP per capita figures to Germany, then S&P will give them the same credit rating.  They've said they will be at least BBB.  They haven't committed to anything else.

[Rod Paradise]

When the Soviet Union broke up, Whitehall officials argued long and hard about how best to deal with the USSR's international debt. It was not fair to put the whole Soviet burden on Russia. On the other hand, the hassle involved in trying to share it out among the 15 republics would be horrible, plus Russia seemed more likely do pay back the debt. Eventually Russia did take on the whole debt, and in August 2006 finally paid it all off -- an impressive achievement. This simplification of the problem made it much easier for the other new countries to launch themselves on international financial markets and set up their own new currencies.

In Yugoslavia it was completely different. Belgrade not unreasonably demanded that if the other republics wanted independence they should take their fair share of the Yugoslav debt burden. Eventually a complicated apportionment was worked out.

We can look to history and argue it either way.

what i am suggesting is that not only should rUK not be intransigent (it is, whether as a scare position or not) but IndyScotland should take a share. After all, at BBB or above it will be able to service it, which was a main issue why the states newly independent from the USSR didn't take it....breadth and size of economies was an issue, and financial collapse a more likely issue than it is for Scotland

Scotland should do the right thing, it will long term pay off enormously in terms of borrowing costs

And Scotland have consistently said that we will take our fair share of the debt, but if rUK is to play economic vandal to punish us for leaving, then with less assets & higher costs we'll take less debts. It's been a rare No success that they have managed to portray Scotland as being unreasonable about this, when it is they who are ruling out negotiation points despite their stance on no pre-negotiation.

I'm also not convinced at the idea that the bankers would look at a moral debt, it doesn't ring true to me.

[Rod Paradise]

"BBB or above, they then later state: "Scottish wealth levels are comparable to that of the U.K. ('AAA'), Germany
('AAA'), Ireland ('BBB+'), and New Zealand ('AA-'). Even excluding North Sea output and calculating per capita GDP
only by looking at onshore income, Scotland would qualify for our highest economic assessment. Higher GDP per
capita, in our view, gives a country a broader potential tax and funding base to draw from, which supports
creditworthiness""

I don't see how you can make the leap that because Scotland has similar GDP per capita figures to Germany, then S&P will give them the same credit rating.  They've said they will be at least BBB.  They haven't committed to anything else.

Similarly I don't see how you can look at a range they've said we'd come in and assume it'd be the lower end, especially if we were to be debt free in the case of bad negotiations.

[DungBeetle]

To be fair - if the argument is that the debt was run up by the UK, not in Scotland's name therefore we won't pay, it does become a matter of honour.  You don't have to pay technically, but it's not very nice if you don't.

And I'm not sure where we are going with the asset argument - Scotland has plenty of infrastructure funded by UK debt?  The English aren't threatening to knock your hospitals down as far as I know.

I agree, but the threat not to take a share of the debt was in response to the claim that we can't use the £. 

I'm pretty sure we all agree that an independent Scotland will use the £ and in that case we will do what is  morally right and pay our fair share. 

Its the rUK who have been playing the scaremongering game from the day dot.

If rUK decide you can't use the pound why wouldn't you still pay off your debts when you leave?  After all, it's not the rUK who are asking you to leave.  You are leaving to become a stronger country so why wouldn't you settle all balances in full prior to you leaving whether you can use the pound or not?

You can't be serious. 

Why do you think we should take a share of debt we never borrowed f we don't get our fair share of assetts? 

You did reap the benefits of the borrowing as part of the UK.  You have hospitals, roads, schools.   You are keeping these assets.

[Rod Paradise]

But I don't see why using the £ is an asset really?  I think Scotland should get a share of the UK's reserves and keep the infrastructure it has built up.  In return it should take a share of debt and take on it's own pension liabilities going forward.  

I see the currency question as a seperate argument.

The £ is a strong currency because of all contributions from the countries in it, the BoE as a lender of last resort so oft quoted is a joint asset nationalised for just that purpose.

[DungBeetle]

"BBB or above, they then later state: "Scottish wealth levels are comparable to that of the U.K. ('AAA'), Germany
('AAA'), Ireland ('BBB+'), and New Zealand ('AA-'). Even excluding North Sea output and calculating per capita GDP
only by looking at onshore income, Scotland would qualify for our highest economic assessment. Higher GDP per
capita, in our view, gives a country a broader potential tax and funding base to draw from, which supports
creditworthiness""

I don't see how you can make the leap that because Scotland has similar GDP per capita figures to Germany, then S&P will give them the same credit rating.  They've said they will be at least BBB.  They haven't committed to anything else.

Similarly I don't see how you can look at a range they've said we'd come in and assume it'd be the lower end, especially if we were to be debt free in the case of bad negotiations.

Fair enough.  You've been even handed about the issue.  I have however seen the Yes campaign and people on this thread claim that S&P have said that Scotland would be cast iron AAA which is simply not the case.

[DungBeetle]

But I don't see why using the £ is an asset really?  I think Scotland should get a share of the UK's reserves and keep the infrastructure it has built up.  In return it should take a share of debt and take on it's own pension liabilities going forward.  

I see the currency question as a seperate argument.

The £ is a strong currency because of all contributions from the countries in it, the BoE as a lender of last resort so oft quoted is a joint asset nationalised for just that purpose.

That's true, but the strength of the BOA is from their reserves (and ability to print money).  If Scotland took a fair share of the reserves before going its own way that would seem fair? 

[Rod Paradise]

To be fair - if the argument is that the debt was run up by the UK, not in Scotland's name therefore we won't pay, it does become a matter of honour.  You don't have to pay technically, but it's not very nice if you don't.

And I'm not sure where we are going with the asset argument - Scotland has plenty of infrastructure funded by UK debt?  The English aren't threatening to knock your hospitals down as far as I know.

I agree, but the threat not to take a share of the debt was in response to the claim that we can't use the £.  

I'm pretty sure we all agree that an independent Scotland will use the £ and in that case we will do what is  morally right and pay our fair share.  

Its the rUK who have been playing the scaremongering game from the day dot.

If rUK decide you can't use the pound why wouldn't you still pay off your debts when you leave?  After all, it's not the rUK who are asking you to leave.  You are leaving to become a stronger country so why wouldn't you settle all balances in full prior to you leaving whether you can use the pound or not?

You can't be serious.  

Why do you think we should take a share of debt we never borrowed f we don't get our fair share of assetts?  

You did reap the benefits of the borrowing as part of the UK.  You have hospitals, roads, schools.   You are keeping these assets.

Nope - they were paid for out of what was spent in Scotland - which for 30-odd years has been less than raised in Scotland. The deficit has been in what has been spent on Scotland's behalf without Scotland having any say, and significant amounts of that have been for English infrastructure like the M25 etc which Westminster designates of 'national importance' and takes the funding for at source.

[DungBeetle]

But now you're back to assumptions.  To say that Scotland has run a surplus for the last 30 years you are taking all the oil revenue?

[Rod Paradise]

But I don't see why using the £ is an asset really?  I think Scotland should get a share of the UK's reserves and keep the infrastructure it has built up.  In return it should take a share of debt and take on it's own pension liabilities going forward.  

I see the currency question as a seperate argument.

The £ is a strong currency because of all contributions from the countries in it, the BoE as a lender of last resort so oft quoted is a joint asset nationalised for just that purpose.

That's true, but the strength of the BOA is from their reserves (and ability to print money).  If Scotland took a fair share of the reserves before going its own way that would seem fair? 

Not when Gordon Brown sold a shed load off not long ago... And those reserves are going to take a hit anyway if they say the Scottish Banks must stop printing their own notes - they are covered by funds kept by the BOE, no notes guaranteed and BoE has to cough that deposit back. So if reserves are included they go into the Assets column, and some debts go into the liabilities, remember we're not talking about if negotiations are fair and equitable, only in the case where rUK get stroppy because we choose to leave the club.

As I've said no Currency Union will cost both parts of the UK dear, why would Scotland take debt we don't have to when we're being vandalised (and our biggest market is being vandalised as well) - it makes no sense.

[DungBeetle]

And even if we give Scotland all the oil historically, it's fair to say that London would have run a surplus for the last 30 years as well to pay for the M25.  As a nation however, we were unable to live within our means to provide infrastructure/public services for the whole country.  

[Rod Paradise]

But now you're back to assumptions.  To say that Scotland has run a surplus for the last 30 years you are taking all the oil revenue?

No just what is ours by international convention. And it's not assumptions it's taken from UK Government figures.

[Rod Paradise]

And even if we give Scotland all the oil historically, it's fair to say that London would have run a surplus for the last 30 years as well to pay for the M25.  As a nation however, we were unable to live within our means to provide infrastructure/public services for the whole country.  

London didn't pay for it though - all the UK paid for it. But the M8 from Glasgow to Edinburgh was paid for from the Scottish 'allowance' no contribution was made from the UK pot.

[DungBeetle]

It's all one big pot, hence one big national debt.

[arbboy]

And even if we give Scotland all the oil historically, it's fair to say that London would have run a surplus for the last 30 years as well to pay for the M25.  As a nation however, we were unable to live within our means to provide infrastructure/public services for the whole country.  

London didn't pay for it though - all the UK paid for it. But the M8 from Glasgow to Edinburgh was paid for from the Scottish 'allowance' no contribution was made from the UK pot.

That seems incredibly unfair and totally illogical.