The UK Treasury is to guarantee all of Britain’s debt even if Scotland votes to leave the UK, in an attempt to prevent creditors from pushing up the cost of government borrowing.
In a memorandum being sent to members of the financial community this morning, the Treasury will commit to holding all of the UK’s £1.2 trillion in debt, whether or not the Scottish people vote for independence this September.
If Scotland does vote to secede from the union, the Treasury would still expect a new Scottish government to pay its fair share.
However, instead of carving up the debt between the two countries, an independent Scotland would reimburse the Treasury’s payments.
The promise comes amid fears from Treasury officials that market jitters about an independent Scotland’s ability to service its share of the debt would drive up the Government’s cost of borrowing in the coming months.