Gordon Brown shares financial warning about independence
First Minister Nicola Sturgeon has continued to press ahead with the SNP’s campaign for another Scottish independence referendum and has frequently expressed hopes of rejoining the European Union. During the Brexit referendum in June 2016, Scotland voted by a convincing margin of 62 percent to 38 percent against leaving the EU. Both Ms Sturgeon and SNP Westminster leader Ian Blackford have used this to push the case for Scottish independence, arguing Brexit has occurred “against the will” of the Scottish people.
Scotland’s ruling party and the Scottish Greens are now drawing up and publishing a joint Government prospectus on independence that will be put to Scots in 2023 as part of a move to hold a new referendum next year.
But while the UK is set to pay the EU nearly £40billion over a number of years as part of a Brexit divorce settlement, Scotland could be left footing a much higher bill, a leading political expert has warned.
Alistair Jones, associate politics professor at De Montfort University in Leicester, told Express.co.uk: “If there is a successful move to Scottish independence, it is most likely that Scotland will have to take on part of the UK’s burden of debt.
“What is not clear, is how much that would be, or how it could be done.
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“There could be an annual payment to help in the servicing of the UK national debt and for that to be in place for an extended number of years.
“This could be something like £10billion per year, but that will depend upon the agreed legacy sum that the Scots would owe, and the length of time of repayment.
“Alternatively, a proportion of the UK national debt could be transferred to Scotland upon gaining independence.
“An example is the splitting of Czechoslovakia, where the debt, liabilities and assets were split 2:1 between the Czech Republic and Slovakia, based around population size.
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“If that model was followed, the split would be 11:1 between Scotland and the rest of the UK.
Professor Jones added: “If UK national debt is around £2trillion, the 11:1 ratio will see the Scots take on around £181billion.
“There will also be assets to take into consideration (e.g. oil and gas) and these will have to be factored in, along with any other liabilities (total UK liabilities, pre-Covid, were around £4.5trillion).
“Yet there could be a decision to split the debt by proportion of GDP or proportion of government spending.”
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But the political expert also urged caution over the matter, and concluded: “All of this, however, is conjecture.
“Neither side will want to explore this issue until an independence vote has been successful.
“Talk about such things, in advance, could undermine the Union arguments by merely acknowledging their possibility.
“Conversely, the size of the potential debt could scare lukewarm independence voters.”
Express.co.uk has contacted the SNP for comment.
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The latest forecast comes with Scottish nationalists warned the impact of lost trade with the UK after independence would be up to three times more costly for the country’s economy than Brexit.
Dr Thomas Sampson, associate Professor of Economics at the London School of Economics (LSE), wrote in The Herald: “Trade and cross-border investment would inevitably become more costly after independence, making it harder for Scottish firms to do business with the rest of the UK and increasing Scottish import prices.
“The rest of the UK currently accounts for close to two-thirds of Scotland’s trade, a much larger share than the size and proximity of the two countries can explain.
“At least part of this excess trade is caused by the political and economic union between Scotland and England. Independence would weaken cross-border integration leading to higher trade costs.
“The impact of lost trade following independence would be two to three times more costly for the Scottish economy than Brexit.
“And this is true regardless of whether or not an independent Scotland rejoins the EU.
“The reason for these findings is simple. The value of Scotland’s trade with the rest of the UK is around three times greater than its trade with the EU.
“Therefore, avoiding trade barriers within the UK is more important for the Scottish economy than reducing trade costs with the EU.”