FORMER governor of the Bank of England Mervyn King has said he sees no “major problems” in Scotland being an independent country, though warned there would be consequences.
Lord King told the BBC’s Newsnight programme: “Scotland certainly could be an independent country. There are plenty of small countries the same size as Scotland.
“Scotland has both the people, it has the capital city, the history, the culture. It could be an independent country. The question is, does it want to be, given the consequences of it?”
He added: “I, myself, don’t think there are any major problems in terms of currency – that was the thing that Project Fear focused on last time.
“But there is an issue about public finances.
“And if the oil price remains low and if they lose the money which is transferred from the rest of the United Kingdom to Scotland, then they would have to make that up in their own budget, but that’s a consequence of deciding to be financially independent, you end up paying for yourself.
“And it would be a challenge, I think, to borrow on the international market if Scotland decided to run a large budget deficit.
“I think that would be expensive, the interest rate would go up. But that’s one of the consequences of saying ‘if we want to be independent we have to accept the consequences’.”
Responding to the comments, an SNP spokesman said: “Mervyn King is absolutely right in concluding that, of course, Scotland could be an independent country – we have huge economic strengths and solid foundations on which to build.
“We’ve seen so many of the promises made to the people of Scotland in 2014 unravel – not least that if Scotland voted No we would keep our EU membership.”
He added: “We will be frank about the challenges we face to grow our economy but equally serious about the opportunities of independence.”
Scottish Labour’s economy spokeswoman Jackie Baillie said: “This is a stark warning about the astronomical cost of leaving the UK from a prominent expert.
“As Mervyn King points out, it is Scots that would have to foot the bill for the turbo-charged austerity that independence would cause.”
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