If it were to secede, there is some evidence to suggest that Scotland would not have to pay its share of the UK’s debt. This is the conclusion of a new article in this month’s issue of Public Money and Management.
The piece by Dr Matt Qvortrup, a senior lecturer at Cranfield University and a constitutional lawyer, points to the examples of Texas, Panama and Paraguay all of which did not take on any of the predecessor state’s public debt following their secession.
The international law is not clear. The Arbitration Commission on Yugoslavia declared that successor states must ‘together settle all aspects of secession by agreement’. However, when agreement cannot be reached, it appears that the presumption is that debt remains with the predecessor state.
The Vienna Convention on the Succession of States in respect of State Property, Archives and Data suggests otherwise stating, unless agreed otherwise, ‘the State debt of the predecessor State shall pass to the successor State in an equitable proportion.’ However this convention is not in force and had not been ratified.
Matt Qvortrup said,
“The secession of states is complex and controversial, but norms have generally been observed. Whether the Scottish, and the rest of the UK, will observe these norms if Scotland votes for independence is an open question. One must hope that this divorce – if it comes – is an amicable one.”
Contact: Matthew Patterson
CIPFA Press Office
t 020 7543 5787
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