Former Prime Minister Gordon Brown warns about Scotland holding UK to a debt ransom
Former Prime Minister Gordon Brown warns about Scotland holding UK to a debt ransom Reuters

Former Prime Minister Gordon Brown has warned Scotland that it would become an "international outcast" if the country's leaders were to follow through on threats to not pay the nation's debt.

In a speech delivered in Coatbridge in North Lanarkshire, Brown said that world leaders would view the country's refusal to take on debt as a "default" and therefore push up interest rates, cost of borrowing and push the nation's economy into hardship.

Scottish people will vote in an independence referendum on 18 September, 2014, and will be asked the straight "yes/no" question: "Should Scotland be an independent country?"

Scotland has a £150bn (€189bn, $250bn) economy but owns £100bn worth of UK debt.

The Scottish National Party has said that if an independent Scotland were not allowed to use the pound, it would refuse to pay its share of the UK's debt.

On 27 August, Scotland's Finance Secretary John Swinney confirmed the devolved government's stance.

"Alex Salmond said last night in the debate that our preferred option was a currency union in which we would take our fair share of the debt that has been built up over time," said Swinney, referring to SNP leader Salmond's debate with former Chancellor Alastair Darling on 25 August.

"But if the UK is going to seize the assets then it is welcome to all the liabilities and we won't be having any of them if that is how the UK behaves."

Politicians from all parties have made it clear that if Scotland "walks away from the UK, it walks away from the pound".

However, former Liberal Democrat leader Charles Kennedy recently warned that by not paying its debt and using the pound without political and regulatory support, it would only hurt Scotland in the short to long term.

"You can call it what you like so let's call it a pound. But it is a pound that is not backed by a central bank. So if there is a run on the pound, unlike today, you are stuffed," said Kennedy.

Kennedy said if Salmond negotiates on the basis that Scotland would not shoulder its bit of the debt, on day one of independence "the international markets would have you for breakfast lunch and dinner".