This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/uk-scotland-scotland-politics-26260086
The article has changed 4 times. There is an RSS feed of changes available.
| Version 2 | Version 3 |
|---|---|
| Scottish independence: Finance ministers clash over mortgage and tax costs | Scottish independence: Finance ministers clash over mortgage and tax costs |
| (about 4 hours later) | |
| Ministers from Holyrood and Westminster have clashed over the cost to households of Scottish independence. | Ministers from Holyrood and Westminster have clashed over the cost to households of Scottish independence. |
| Chief Secretary to the Treasury Danny Alexander said interest rate rises could see up to £5,200 added to the annual cost of a mortgage in Scotland. | Chief Secretary to the Treasury Danny Alexander said interest rate rises could see up to £5,200 added to the annual cost of a mortgage in Scotland. |
| Meanwhile, Finance Minister John Swinney said UK taxpayers might pay an extra £5.5bn each year to service the national debt, unless a deal is agreed. | |
| Both ministers appeared before MSPs examining Scotland's economy. | Both ministers appeared before MSPs examining Scotland's economy. |
| A Scottish Parliament committee assessed Scotland's economic future ahead of the 18 September independence referendum. | A Scottish Parliament committee assessed Scotland's economic future ahead of the 18 September independence referendum. |
| Scottish government ministers said keeping the pound under a formal currency union - or "sterling zone" - was in the interests of both Scotland and the rest of the UK in the event of a "yes" vote. | Scottish government ministers said keeping the pound under a formal currency union - or "sterling zone" - was in the interests of both Scotland and the rest of the UK in the event of a "yes" vote. |
| UK Chancellor George Osborne has ruled out a currency union, a position backed by Labour and the Liberal Democrats. | UK Chancellor George Osborne has ruled out a currency union, a position backed by Labour and the Liberal Democrats. |
| Scottish ministers have suggested they might not take on a share of the UK's debt if there was no deal on sterling in the event of independence. | Scottish ministers have suggested they might not take on a share of the UK's debt if there was no deal on sterling in the event of independence. |
| Mr Alexander told Holyrood's economy committee the "likely volatility" of a new Scottish currency would lead to higher interest rates. | Mr Alexander told Holyrood's economy committee the "likely volatility" of a new Scottish currency would lead to higher interest rates. |
| He added that if Scotland refused a share of UK debt post-independence, it would lead to higher international borrowing costs. | He added that if Scotland refused a share of UK debt post-independence, it would lead to higher international borrowing costs. |
| Mr Alexander said: "In the event of a default, or a refusal to accept debt, one bank, Jefferies investment bank, has done the only detailed estimate out there - they have suggested that under those circumstances there would be a premium of more like five percentage points in that default scenario. | Mr Alexander said: "In the event of a default, or a refusal to accept debt, one bank, Jefferies investment bank, has done the only detailed estimate out there - they have suggested that under those circumstances there would be a premium of more like five percentage points in that default scenario. |
| "Assuming a 75% pass through from bond rates to mortgage rates, that would be an extra cost of about £5,200 on an average mortgage cost in Scotland." | "Assuming a 75% pass through from bond rates to mortgage rates, that would be an extra cost of about £5,200 on an average mortgage cost in Scotland." |
| Mr Alexander claimed this could have "a huge effect on mortgages and businesses". | Mr Alexander claimed this could have "a huge effect on mortgages and businesses". |
| The UK government has warned that, even if a new Scottish state accepted its share of UK debt, it would have to pay an "independence premium" to borrow from the markets, leading to an extra £1,700 a year for the average mortgage-payer. | The UK government has warned that, even if a new Scottish state accepted its share of UK debt, it would have to pay an "independence premium" to borrow from the markets, leading to an extra £1,700 a year for the average mortgage-payer. |
| Mr Swinney said failure to agree a deal with an independent Scotland on the division of liabilities and assets - including the pound - could result in the remainder of the UK having to pay up to £5.5bn more a year in debt servicing costs. | Mr Swinney said failure to agree a deal with an independent Scotland on the division of liabilities and assets - including the pound - could result in the remainder of the UK having to pay up to £5.5bn more a year in debt servicing costs. |
| That, the Scottish finance secretary added, would be the equivalent of increasing income tax by one penny for people in the rest of the UK. | That, the Scottish finance secretary added, would be the equivalent of increasing income tax by one penny for people in the rest of the UK. |
| Appearing at the committee after Mr Alexander, he told MSPs: "If we follow the logic of the Treasury's position, the Treasury is walking into the payment of an extra £4 to £ 5.5 billion a year in debt interest charges to sustain up to an extra £130 billion of debt. | Appearing at the committee after Mr Alexander, he told MSPs: "If we follow the logic of the Treasury's position, the Treasury is walking into the payment of an extra £4 to £ 5.5 billion a year in debt interest charges to sustain up to an extra £130 billion of debt. |
| "Under the proposition we have put forward, an independent Scotland would be quite happy to pay, as part of negotiated arrangements which would include participation in a sterling zone." | "Under the proposition we have put forward, an independent Scotland would be quite happy to pay, as part of negotiated arrangements which would include participation in a sterling zone." |
| Deputy First Minister Nicola Sturgeon, appearing alongside Mr Swinney, rejected the UK government's claims on interest rates. | Deputy First Minister Nicola Sturgeon, appearing alongside Mr Swinney, rejected the UK government's claims on interest rates. |
| She told the committee there was "not a scrap of evidence" that borrowing costs would be higher, and that Scotland would continue to benefit from an "integrated financial services market, one of the reasons we propose remaining in a currency zone". | She told the committee there was "not a scrap of evidence" that borrowing costs would be higher, and that Scotland would continue to benefit from an "integrated financial services market, one of the reasons we propose remaining in a currency zone". |
| Ms Sturgeon added: "There are examples of other small European countries that have lower mortgage costs than people in Scotland as part of the UK right now." | Ms Sturgeon added: "There are examples of other small European countries that have lower mortgage costs than people in Scotland as part of the UK right now." |