Debt

7. Born Honest, Born Clever

How a nation is born – and how it behaves as it is born – matters. History tells us this. A nation born in blood almost always has a future of blood ahead of it. A nation which has to struggle for its freedom builds the love of freedom deeply into its nature. A nation born anew which turns on its neighbours is trapped in a cycle of recrimination and revenge.

Scotland must get its early days right. It must begin confident in its ability to make itself anew. It must rediscover a national strength that has been subsumed in a union where strength is an attribute of the south and endurance is the attribute of the north. But, quoting Gandhi, in those early days it must also be the change it wants to see. If it wishes to be a nation of justice it must act justly.

As I've been trying to make clear over and over, unless the UK accepts Scotland beginning its independent life as a continuing state (something the UK point blank refuses to even contemplate), we have no formal obligation to do, accept or agree anything. This is not Scotland's doing, it is the rules of the game as chosen by Whitehall. Were we to behave as Britain has behaved throughout history we would be focussed almost entirely on working out what we can grab for ourselves at the expense of any handy nation we can rob.

In this instance, if we are ready to forego Sterling, the remainder of the UK would be entirely ripe for the robbing. If all the things they have that we might want are added up and subtracted from a population share of the debt, it remains a big negative. Walking away would make Scotland one of the very richest nations on earth – massive natural assets, no debt whatsoever.

But it isn't really right. The citizens of Scotland had virtually no say in the running up of that debt. Whether we wanted to let the banks go bust or not, no-one was asking us. Our money was given to the financial elite by the political elite. The debt, rightly, belongs to Alastair Darling and Fred Goodwin, the two horsemen of our debt apocalypse. One had no democratic mandate to give it and the other had no moral right to take it.

Still, the people of England were robbed by these bandits every bit as much as the people of Scotland. Indeed, Darling Bandit was sent to London by the Scots. My position is clear on this; if this debt was to be repaid by the elite that created it I'd be off like a shot, leaving them to drown in the backwash of their corrupt financial system. But it isn't. The elite are never the ones that pay for their crimes; it's always the people. And it is the people of England, Wales and Northern Ireland who will be paying for the behaviours of the elite. I for one will have no part of leaving them on their own with no cash to invest in their society while Osborne and Darling enjoy their personal millions.

But – and oh what a size of but this is – the terms on which we repay our debt to the English, Irish and Welsh people will be our terms. Every intransigent action take by Whitehall in negotiations which costs Scotland money will be subtracted from that debt. If they really did refuse access to Sterling then the cost of a foreign currency reserve (the cost of running a currency pegged to Sterling) would be taken off that debt. If they mess us around on our share of the assets, we'll make the unilateral decision on what we're deducting in kind. And so on. If the people of the rest of the British Isles want us to take our share then they have the responsibility to make their democratic government behave in good faith. I promise them that the Scottish people will seek to do the same to their own negotiating team.

The next point is important. We will not and under no circumstances come out of this with any debt. The idea that there would be a debt transfer has already been ruled out by all involved. Scotland will simply agree to pay for a sum equivalent to the cost of servicing our share of the debt. Think of it like this; England remains stuck with the mortgage, we'll just set up a Direct Debit to help them out a bit. Let's call it the British Aid Payment.

And this next point is yet another that hasn't been properly discussed; it would be procedurally wrong for Scotland to agree to pay the ongoing costs of the UK debt. Scotland will have no democratic responsibility for the management of that debt. The debt belongs to the UK, not to Scotland, and so Scotland cannot influence how that debt is managed. It is not just theoretically possible that the UK could screw up its economy further, it's a likely outcome. By failing to make any substantial changes in the way the financial sector is structured and regulated, almost all of the risk and bad debt which caused the 2008 crash are still there. Britain is another financial crisis waiting to happen. If it did, Britain would have no capacity to further bail out the banks. If they borrowed to do it it is the remainder of the UK and not Scotland which would face the 'crippling' borrowing costs. Were that to happen, it is simply not acceptable that Scotland would pay the price of a failure by the government of another country. So Scotland would agree a fixed-rate repayment deal. Everything else is down to London and not our problem.

This is a little bit like debt. But then PFI is a little bit like debt and the Treasury doesn't include that on its books. So Scotland has no debt, just a payment programme. And it is a payment programme with no risk to us – London's debt management is its problem, not ours.

So how much would it be? There are Better Together hangers-on who bellow their usual 'if I say it loud enough the Scots will fall for it' lines. I've heard them claim that it would 'have to be' distributed on a GDP share. This is the only time that they are ever heard to admit that Scotland's GDP is substantially higher than the UK average. For fun I think we should just tell them that future oil income is volatile so we should take them at their worst makey-uppy future analysis, the ones in which Scotland is bankrupt and proportion it to that. But that's not what's happening. If Scotland has a moral responsibility to debt (which it does) then its a democratic responsibility and so its a per capita share. As a starting point. Before we through our weight around at all.

I could just stop here. But I began by arguing that Scotland should behave from its birth as it plans to go on. So let's think about what we could do for the people of England, Wales and Northern Ireland. I repeat, it is to them that our obligation lies, not the City of London. As a starting point we might wish to demand that a windfall tax be levied on the super-rich of London and the tax-dodging corporations who caused this and have suffered not a penny of loss. If there is to be a tax deal added to the negotiation of Sterling at London's behest, then there can be a tax deal on debt added at Scotland's. We shall assume a one-off wealth tax to be levied in the remainder of the UK which writes off 25 per cent of the debt. If London refuses to levy that debt that is up to it, but it is a condition for us and so we'll just take it off the total debt.

Or regionalism. The most galling thought is not that Scotland is paying back to the English people but that we're really giving it to George Osborne to piss away on tax breaks for all his rich pals. Scotland is not the part of the UK that has suffered most from London rule. Perhaps we should act to redress that issue. Perhaps we should pay a proportion of our annual 'direct debit' payment not to the Treasury but to local authorities in the North of England, Wales, Ireland, Cornwall, the Midlands... Better still, perhaps we should set up large cooperative development funds in these areas and put all our payments into them, allowing the people of the North of England and so on to manage their own resources. Scotland could send them money in a way London never would. 'You can't do that' screams Boris Johnstone. Sure we can Boris.

See! Once you get past the scaremongering, Scotland's responsibility to UK debt turns out to be quite fun.