Fiscal Policy

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Policy Paper - UK debt and the Scotland independence referendum


The Treasury has today set out detail on government debt in the event of Scottish independence. The technical note makes clear that the continuing UK Government would in all circumstances honour the contractual terms of the debt issued by the UK Government. An independent Scottish state would become responsible for a fair and proportionate share of the UK’s current liabilities.

Treasury analysis shows £1.6 billion funding gap in Scottish independence White Paper

The Scottish taxpayer faces a bill of £1.6 billion per year – the combined annual budget of the Police Scotland and the Scottish Fire and Rescue Service – to meet the costs of just three of the unfunded policy commitments in the Scottish government’s White Paper for independence, new Treasury analysis shows.

This blog originally appeared on The Economics of Constitutional Change, 3 December 2013

The level of debt and how an independent Scottish Government would deal with it is a hugely important issue. Given that it is currently running a deficit – its spending exceeds its tax revenue – Scotland will be dependent on the commercial money markets to supply funds to pay for that part of the costs of public services which cannot be paid from current revenues.

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by David Comerford, David Bell and David Eiser

Many of the questions, both actually asked in the White Paper launch press conference, and hypothetically asked in the Q&A in Part 5 of the White Paper, drew a comparison between the assessment of Scotland’s economy from the Scottish Government and the assessment from the Institute for Fiscal Studies in its fiscal projection report.

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