Britain to assume all UK debt to stave off fear of Scottish independence default

LONDON – Britain's Treasury says it will assume all U.K. government debt, even in the event Scotland votes for independence.

Treasury said Monday the move is meant to fend off market worries over how the debt will be handled should Scotland vote on Sept. 18 to break away from the U.K. The government wants to prevent investors from demanding a premium on their U.K. bond purchases to compensate for uncertainty.

A Treasury paper says that Scotland would be responsible for a "fair and proportionate" share of liabilities and that an independent Scotland would have to reimburse the U.K.

Scottish independence advocates say they want to continue to use the pound as its currency and remain in the European Union and NATO should independence take place.