Earlier today, Liberal Democrat Scottish Secretary Michael Moore made a speech to CBI Scotland in which he highlighted the uncertainty surrounding an independent Scotland’s credit rating. In his speech, Mr Moore said:
“Scotland would have to start from scratch and approach the agencies to get a rating, without a track record to rely on.”
This seems to have irked the SNP with a press releasing dripping with all the assertions we have come to expect from the anti-UK camp pinging into inboxes not long after Mr Moore had finished speaking. SNP Treasury spokesman Stewart Hosie said:
“Instead of suggesting that he knows better than the ratings agencies and can decree that an independent Scotland would have a poor credit rating, Michael Moore would be better advised to actually look at the evidence.”
Look at the evidence you say? Ok.
What Mr Moore said was independent Scotland would have to ask for a credit rating without having a credit history – like applying for a mortgage without so much as a Tesco clubcard to back you up.
“Any judgement on the possible rating of an independent Scotland is impossible at this stage. This is because of the absence of information on the nature and terms of any possible independence agreement, and the considerable uncertainty regarding key provisions such as the partition of assets and liabilities, the regime governing the financial sector, possible currency change, and the length of a transition period to independence.”
“absence of information…” and “considerable uncertainty…” have always been the favourite phrases of international markets and credit rating agencies.
With precious little detail coming from the SNP on their plans for independence it is perfectly reasonable to argue that Scotland might not gain the confidence of credit rating agencies to merit a ‘AAA’ status, especially with no credit history to point to.
Credit where it’s due though. By using the information from Fitch to back up their argument, the SNP are obviously admitting that considerable uncertainty does exist over an independent Scotland’s credit rating.