The chief secretary to the U.K. Treasury, Danny Alexander, said Scotland would have suffered a similar fate to Iceland in the wake of the banking crisis had it been an independent nation.
Scotland’s 5.2 million people would have been saddled with about 123 billion pounds ($199 million) of debt in the fiscal year that ended in March 2010, Alexander said in a speech to business leaders in Glasgow this evening. More than half of that would have gone on rescuing Edinburgh-based Royal Bank of Scotland Group Plc and HBOS Plc, and Scotland would have run a 14 billion-pound budget deficit, one of the highest per capita in Europe, he said.
“As the experience of other small countries with large banking sectors, like Iceland and Ireland, has shown, these would have been a catastrophic problem for Scotland to deal with had we decided to go it alone,” Alexander, who represents a Scottish electoral district in the U.K. Parliament, said, according to remarks released by his office.
The comments are the latest attempt by the government of Prime Minister David Cameron to counter efforts by Alex Salmond’s Scottish National Party -- which controls the government in Edinburgh -- to break away from the U.K. The SNP has promised a referendum on independence by 2016.