Upon declaring independence, the public assets must be divided by sensitive negotiations.
The issue of debt and asset splits in the event of Scottish Independence is a sensitive and important topic but it is also one that has been successfully navigated by other countries. Previous attempts to lay out a negotiating strategy for Scotland (such as Scotland’s Future White Paper 2014 and the Sustainable Growth Commission Report 2018) have not fully considered historical precedents and thus a new strategy for future independence negotiations should be considered.
However, the lack of a Scottish Register of Assets is a severe shortcoming. It is currently almost impossible to determine what an independent Scotland would need but currently lacks – which fixed government assets are actually owned by the public and are thus easily transferable compared to government-used buildings leased from private companies which may be subject to complex transfer negotiations. Issues where the debt and asset separation may impact payments to residents in Scotland (particularly pensions and social security) must be handled with care to ensure continuity of service, even if liabilities are transferred (as even a single missed or delayed payment could result in severe financial hardship for many).
Amidst the political rhetoric and gamesmanship inherent in high level negotiations it is important for all parties to reflect on how their words and actions affect the population in general. Behaviour such as threatening pensioners with destitution should they vote a certain way in an independence referendum is unbecoming of a civilised debate in a democratic state.
All of the plausible negotiating strategies presented here represent clear advantages for an independent Scotland over the current devolved constitution. Even the least advantageous (the Annual Solidarity Payment) presents a scenario where Scotland would save around £1.5 billion per year in debt interest payments compared to that currently assigned to Scotland in GERS. The most generous scenarios for Scotland – the Additive and Zero-Option scenarios – are also the most considerate of the needs of the rUK. These would permit rUK to only transfer assets mutually agreed by both states (rather than an arbitrary amount based on a crude population share). Perhaps more critically, they would ensure that Scotland will accept and endorse the rUK’s claim to state continuity and thus mitigate Scottish independence becoming more disruptive to the rUK’s economy, national pride and geopolitical standing than is absolutely necessary.
Scottish Independence Convention. Transition Papers, no.3 Debts and Assets