Alex Salmond’s attempt to disown the UK national debt should be a non-starter

Robert Henderson

During  February 2014 the Conservative, Labour and LibDem parties all  pledged not to enter into a currency union consisting of Scotland and the rest of the UK if there is a YES to independence in the coming referendum ( http://www.telegraph.co.uk/news/uknews/scotland/10657721/Scottish-independence-Alex-Salmond-reveals-currency-Plan-B.html). In response   the SNP leader Alex Salmond  threatened that Scotland would not take  on a share of the UK national debt unless Scotland can share the Pound ( http://www.telegraph.co.uk/news/uknews/scotland/scottish-politics/10634697/Scottish-independence-SNP-retribution-plan-over-pound-would-cripple-economy.html).

The idea that Scotland can just walk away from the UK National Debt  is a nonsense both legally and  as a matter of realpolitik.  Legally, the Union would have to be dissolved by an Act of Parliament because the Act of Union   contains no provision  for the Union to be dissolved, viz: “That the Two Kingdoms of Scotland and England shall upon the first day of May next ensuing the date hereof and forever after be United into One Kingdom by the Name of Great Britain …” (http://www.legislation.gov.uk/aosp/1707/7/section/I)

Consequently, the Act of Union would need to be repealed  formally or a further Act granting independence to Scotland passed with the Act of Union falling on the doctrine of implied repeal. Until either of those things are done there can be  no legal independence.

The passing of such legislation is entirely dependent on reaching terms. If  terms are not reached then there is no obligation of  Parliament to grant Scotland independence.  Moreover,  no Parliament can bind another. Consequently, if the  next General Election is held in 2015 ( before Scotland is  independent),  there could be no bar to a new Parliament refusing to accept any or all  of the terms agreed by the previous Parliament or of refusing to grant Scottish independence under any circumstances. Even if the previous Parliament had passed an Act granting Scotland independence on agreed terms, the incoming Parliament could repeal the legislation and nullify the independence.

A possible refusal of legal  independence is both inherent within the situation and reasonable. The idea of  holding a referendum to divide a state without agreeing  first the conditions for separation means as a matter logic  that independence is conditional on terms being agreed.  If that were  not so then Salmond could demand anything and could not be denied it because of the vote for indepenence.

That brings us to realpolitik. Its use is reasonable because  what is called international law is no law at all. That is so  because there is no supranational  agency which, as a last resort, has the power to enforce breaches of such putative law by armed force.

The realpolitik blocks to Salmond’s position are many and powerful.  For example, the  punitive measures Westminster could deploy to force Scotland to accept their share of the debt include  these:  vetoing Scotland membership of the EU, setting up border controls, denying Scots the right to work in England and  blocking the export of Scottish goods through  the rest of the UK .

Salmon has made much of Article 30 of the Edinburgh Agreement:

30. The United Kingdom and Scottish Governments are committed, through the Memorandum of Understanding  between them and others,  to working together on matters of mutual interest and to the principles of good communication and mutual respect.  The two governments have reached this agreement in that spirit.  They look forward to a referendum that is legal and fair producing a decisive and respected outcome.  The two governments are committed to continue to work together constructively in the light of the outcome, whatever it is, in the best interests of the people of Scotland and of the rest of the United Kingdom.

The Memorandum of Understanding has no legal  standing, viz:

2. This Memorandum is a statement of political intent, and should not be interpreted as a binding agreement. It does not create legal obligations between the parties (para 2 of the introduction –  http://tinyurl.com/Devolution-Memorandum ).

Consequently, the memorandum can be ignored with impunity as far as legality is concerned. Moreover, the language  of Article 30 is woolly. There are clearly issues where the best interests of two parties cannot be served. The question of  a currency union is one of them. Its creation would grossly disadvantage the remaining UK members  and grossly benefit Scotland. The international markets would immediately downgrade the currency and the  UK’s credit rating,   both because of the uncertainty of what Scotland would do when it had control over its spending and as a result of the long shadow of the Bank of England’s standing as the lender of last resort  for Scottish banks.  Scotland would gain immensely because they would have the use of one of the most stable currencies in the world and the UK taxpayer (in reality the English taxpayer because Wales and Northern Ireland do not come close to meeting their public expenditure out of tax raised in their territories) would shoulder the risk of Scottish banks defaulting.  Conversely, the refusal of a currency union would benefit the remainder of the UK and be very damaging to Scotland.

On the question of the Pound being  a currency  which is part owned by Scotland, the position is simple. Scotland only gained access to the Pound by the Union of 1707.  The Pound Sterling before the Act of Union  was the English currency. Sterling was pressed into service as the currency of first Great Britain. Article 16 of the Act of Union applies:

That from and after the Union the Coin shall be of the same standard and value throughout the United Kingdom as now in England . . .( http://www.legislation.gov.uk/aosp/1707/7/contents)

The Scottish Pound (worth only a few shillings Sterling in 1707) was abolished by the Act of Union. By leaving the Union Scotland  loses the legal right to the Pound Sterling.

It is worth noting in all the huffing and puffing from the SNP that in the 307 years of Union  Scotland has built up a massive debit balance between the taxes raised in  Scotland and the public money spent there.  Right from the off Scotland was given a much lighter tax burden than England through Article IX of the Act of Union, viz:

IX. THAT whenever the sum of One million nine hundred ninety seven thousand seven hundred and sixty three pounds eight shillings and four pence half penny, shall be enacted by the Parliament of Great Britain to be raised in that part of the United Kingdom now called England, on Land and other Things usually charged in Acts of Parliament there, for granting an Aid to the Crown by a Land Tax; that part of the United Kingdom now called Scotland, shall be charged by the same Act, with a further Sum of forty-eight thousand Pounds, free of all Charges, as the Quota of Scotland, to such Tax, and to proportionably for any greater or lesser Sum raised in England by any Tax on Land, and other Things usually charged together with the Land; and that such Quota for Scotland, in the Cases aforesaid, be raised and collected in the same Manner as the Cess now is in Scotland, but subject to such Regulations in the manner of collecting, as shall be made by the Parliament of Great Britain. (http://englandcalling.wordpress.com/the-act-of-union-1707/)

The population of  Scotland in 1707 was about one fifth of  England and Wales estimated six million or so. Had the taxation been the same in Scotland as in England , under clause IX Scotland would have paid around £400,000 not £48,000.

There  is  also the vexed question of how to ensure Scotland services  the debt after independence., It is all too easy to see them defaulting. The only practical way would be for the UK to continue to administer all the debt with Scotland paying the money for their share to Westminster. The idea that Scotland could create a new currency and pay for it with that would be a non-starter because such a currency would have no international credibility for many years. I have addressed  this subject in depth at http://englandcalling.wordpress.com/2011/06/02/the-wages-of-scottish-independence-public-debt/

Worryingly, not one Westminster politician has challenged Salmond or the SNP generally on the  claim that  Scotland could refuse to take on a share of the UK national debt.  This suggests that either that no Westminster politician  has considered the matter properly or that our political elite have already decided to sell England down the river in the event of a Yes vote by letting Scotland either have their currency union or to walk away from the UK without taking on any of the UK national debt.

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21 Responses to Alex Salmond’s attempt to disown the UK national debt should be a non-starter

  1. The English could secede from London and have their own country.

    • Salmond tends to make fantastic statements, but that’s a national characteristic of the Scotch so what do you expect? He has also said that Scots won’t need visas to work in England, as if that is a matter for him to decide, and that if independence doesn’t work Scotland can opt back into the ‘union’, as though the people of England have nothing to do with the decision.

      They’ve lived in a deluded la-la fantasy land, at our expense, for so long they cannot conceive of the reality of self-reliance. It doesn’t seem to have occurred to very many of them, either, that: a) their independence is at our discretion and b) we can kick them out, whether they will or not, if we wish, and I have noticed, over the past fifteen years, a growing disinclination to put up with their boasting, whining and grasping. I give the ‘United’ Kingdom twenty years at most, although I hope, in 1997, that it would have been dissolved by now.

    • david brown says:

      what about Bradford having a vote on leaving the United Kingdom

  2. DICK R says:

    It would be worth getting rid of Scotland just to make it impossible for England to ever again be ruled by a scotch socialist clique like the blair regime

    • It is worth getting rid of Scotland so that the English can set about clearing up the mess generations of Scotch favouring or Scotch dominated British governments have made of England. For about a thousand years before the act of ‘union’ England was an unparalleled economic, artistic, cultural, creative and military beacon, and an incubator for many cultures elsewhere – all the things that, laughably, Scots like to claim for themselves. Freed from the numbing grip of British control we have some chance of once again realising our potential and enjoying the fruits of our labours, the which are currently appropriated and squandered by the British for the benefit of anyone who isn’t English.

      • Agnes says:

        Better to rid of all the people who don’t appreciate England, and have a fresh start. Strange that you only seem worried about getting rid of the Scot’s. In fact you would do better if both Countries stay together and help one another to have a decent life. I am worried about Britain too ,but there is no point in complaining and doing nothing constructive. I will keep praying?

    • david owen says:

      what is it with you english arseholes scotch is a drink ,so if your backward education system cant teach you to say things properly or spell dont say it or spell it ,as for getting rid of us read your history englishman or are you to retarded like half of you are,thick as shit,no understanding of what goes on in britain or your own doorstep

      • Another Scotch brain overheating as the requirements of the debate prove too much…

      • david owen says:

        very funny you english bastard what did you get your mummy to spell every thing for you? does your english brain comprehend what life is about or what a debate is or did mummy tell you what to write !!!!! oh my england ,full of pakis ,eastern euro rubbish and what the odd white person ,jolly old england are you one of the bum bashers who would shag mummy if told to do so ,oh england a place fit for heroes, oh sorry a place for pakis and all other muslims

  3. Agnes says:

    I really think that England should really be brave and face them head on. Even have a War and clear out all the foreign ” Rats” and Politian’s that have polluted the whole Country, and can only destroy it if they are allowed to get away with it. “England is such a beautiful country” Please WAKE UP and save your Country, its to small to accommodate all this Scum………. They are getting to much attention.. .

  4. Colin Ray says:

    The MacCakeandeatits of North Britain have not changed too much. The Union of the Crowns came about because James 1st (6th of Scotland) rushed to England immediately he heard of the death of Elizabeth 1st in order to claim the crown and get his hands on English wealth (and fill his court with his Scottish clansmen). The Act of Union 1707 was desired by the Scottish government following their disastrous foray into the New World, trying to emulate a growing English trading empire, which left Scotland bankrupt. England’s advantage for the Union was closing the back door to Scotland’s Auld Alliance, France, however, England had to pay Scotland’s debts from the failed Darien Project.

    I think that the Union has benefited both nations for most of its history but without it many Scots would never have gained the power, wealth and influence, globally, that they did.

    Times change and history has consistently illustrated that artificially created nation states eventually implode. The former USSR and the former Yugoslavia are two recent examples. Why should the, current, Dis-united Kingdom be any different?

    If Scotland actually does vote for and achieve independence (which I doubt the majority of Scots will vote for, cannily knowing which side their bread is buttered on), then I have no faith in the British/English MPs negotiating a settlement that will benefit England.

    England needs a leader to emerge with the attributes of Oliver Cromwell. Unfortunately, there is no sign of that happening and we will have to rely on the current crop of invertebrates.

    • david owen says:

      what bread & butter are you talking about the only thing i have seen from a english parliament is crumbs ,as for the act of union is was brought about by rich pricks at the time to line their own pockets who all happened to be a minority and now run by south of england bastard tory scum,my people pay enough in tax as it as inglisi cunt the money we get from scumdon is our own so dont make me laugh as the english empire is gone ,wake up will you !!!! so if your a tory reading this” fuck you you scum of the earth”

  5. Colin Ray says:

    Thank you for you ‘articulate’ reply, Mr Owen. The biggest service the Scots can do for England is to vote for independence. Scotland was bankrupt before the Act of Union, due to overweening Scottish arrogance with the failed Darien Project, In the 21st century, Scotland virtually bankrupted the entire UK due to the arrogance of the exclusively Scottish board of RBS, now 80% owned by the majority English tax payers. (Presumably, the Scots will repay that following independence).

    With regard to ‘the crumbs from an English Parliament’. Well, there is no such thing as an English Parliament. I wish there was. We English suffered thirteen years, between 1997 and 2010 of a Scots dominated British government. Every Scottish MP, except Tony Blair, signed Scotland’s Claim of Right in which they publicly pledged to make Scotland’s interests paramount in everything they said and did. They certainly honoured that pledge. The Barnett Formula ensures that Scotland receives far more per capita in Scotland than in England. Some crumbs.

    It was the votes of Scottish MPs which forced through the votes for foundation hospitals and tuition fees for English students, confident in the knowledge they would not affect their own constituents.

    England was a free and wealthy country before the Act of Union and Scottish independence will assist our return to that enviable state when we are free of Scottish MPs interfering in English matters.

  6. Barry says:

    Why is all this tension and crap being stirred-up for? I, for one, like the Scots. They are a very talented nation who I hope will always be with us. If the split happens (and I passionately hope it won’t) both Scots and English will be the losers. The ONLY people who will gain from it will be the EU (ie the Germans and the French) and Zionist Supremacist Jews who always like to gain when two white nations fall-out with each other.

    Indeed, I have my suspicious about Mr Salmond in this regard. Whenever, I have visited Scotland, I have never seen a native Scotsman who looks like him. I wouldn’t be at all surprised if he has some Jewish ancestry down the line somewhere.

  7. Never mind the nonsence. The reason Salmond says we can’t take our share of the debt unless we can keep the pound is very simple. The U.K. debt is one of the worst in the world. Much worse than Ireland or Portugal’s two countries who recently had to borrow from the IMF because their debt was so bad no one would lend them money at a reasonable rate.We get away with it because the U.K Government borrows money from The Bank Of England at 2 % The bank create this out of thin air & lend it to the Government. At the end of the financial year the bank which is state owned sends it’s profit to the state. IE the U.K government. We the U.K are printing money for nothing. We need to, it’s the only way any country can service such enomous debt. The “old money people” have engineered this so they are always in control of our Governments. Scotland cannot possibly take our share of this debt unless there is a currency union, so we can can continue to be involved in the money printing scam. See exiledplumber.com

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