UK confirms debt pledge ahead of Scottish referendum

LONDON Mon Jan 13, 2014 4:53am EST

The Saltire (R) and Union Flag fly together in a street before a debate in the Scottish Parliament on ‘Scotland’s future,’ in Edinburgh, Scotland September 18, 2013. REUTERS/Russell Cheyne

The Saltire (R) and Union Flag fly together in a street before a debate in the Scottish Parliament on ‘Scotland’s future,’ in Edinburgh, Scotland September 18, 2013.

Credit: Reuters/Russell Cheyne

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LONDON (Reuters) - The British government confirmed on Monday that it will take responsibility for all British government debt should Scotland vote for independence in September, a move it hopes will avoid jitters in bond markets ahead of the referendum.

"In the event of Scottish independence from the United Kingdom, the continuing UK government would in all circumstances honor the contractual terms of the debt issued by the UK government," the Treasury said in a statement.

An independent Scotland would be responsible for "a fair and proportionate share" of Britain's liabilities but a share of the outstanding debt would not be transferred to Scotland, it said, adding the terms of repayment would be subject to negotiation.

Britain's net debt stood at nearly 1.2 trillion pounds at the end of the 2012-13 fiscal year.

(Reporting by William Schomberg, Editing by Belinda Goldsmith)

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