Yes camp must end conspiracy of silence on default risks

Yes Scotland is engaged in a conspiracy of silence on the impact that a government default on debts would have on consumer interest rates in an independent Scotland.

According to Leader of the Scottish Liberal Democrats Willie Rennie MSP the nationalists’ campaign has failed to address concerns that costs of mortgages, car loans and credit cards will rise if the Scottish Government effectively defaults on its fair share of debt.

As Scotland’s mortgage debt alone currently stands at £100billion any increase in the cost of that borrowing will cause deep concern in households across Scotland.

Willie Rennie MSP said:

“The Yes campaign is involved in a conspiracy of silence to hide the real impact of their independence plans on Scottish households. With billions of pounds of consumer debt in Scotland any increase in interest rates would hit households hard in their pockets.  But that’s exactly what will happen if Alex Salmond refuses to pay Scotland’s fair share of national debt.

“A default of government debts on the first day of independence will put borrowing costs for the Scottish Government up. The international markets will charge them premium rates as the risks will be judged higher.

“The contamination caused by a Scottish default would directly infect consumers in Scotland.

“Figures from the Council of Mortgage Lenders suggest that households in Scotland owe £100billion on their mortgages. With billions more tied up in other consumer loans any increase in interest rates would hit consumers hard in their pockets.

“That’s the consequence of Alex Salmond’s plans.  As part of the UK Scotland has a solid reputation for sound money across the globe.  Refusing to pay our share of public debt will trash that reputation in just one day.

“Alex Salmond’s refusal to deny that consumer debt costs would rise if he turned his back on Scotland’s fair share of public debt is revealing in itself.  There is a conspiracy of silence at the heart of the Yes campaign.  They know that their reckless threat to effectively default would cost consumers millions of pounds.  Alex Salmond should speak out on this matter. He must not be allowed to let this be another unanswered question on the cost of independence.

“His Fiscal Commission chairman Crawford Beveridge confirmed that walking away from Scotland’s fair share of debt would be the equivalent of a default.  And a default sends warning signals to investors who subsequently want a higher price for investing in those bonds as a result of the higher risk.

“The National Institute of Economic and Social Research have predicted that borrowing costs in an independent Scotland could go up by 1-2%. Translated into mortgage repayments, it could mean a rise of £1,300 per year for a 75% mortgage.  And credit cards could go up by £120.  Alex Salmond’s reckless default threat will hit us hard in our pockets.

“He needs to come clean on the price of his independence plans.”

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