Monday, 12 May 2014

The UK Government really doesn't seem to understand the concept of fairly splitting assets and liabilities

Given the size of the UK debt stock which the UK Government has guaranteed to honour, the rest of the UK has a lot to gain from the fair division of assets and liabilities in the event of Scottish independence. You would therefore think that it would help its own interests by identifying the asset side of this transaction, so that picking up its share of the debt would seem like a fair deal for the Scottish negotiating team.

Statements like the following from today's Scotland in the UK report, seem to suggest that the UK Government is intent on claiming all of the assets whilst simply kicking up a fuss when it is reciprocally left with all of the liabilities:

"Instead of gaining from the UK’s EU budget rebate, an independent Scotland would actually have to pay towards the rebate of the continuing UK."

The EU budget rebate is clearly an asset of the current UK. If the UK Government wants Scotland to take its share of the debt, then it will have to share such assets. Someone should explain the impact of outside options/disagreement points on the bargaining solution to Alastair Carmichael.

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