Legislation tabled to give Scotland bond-issuing powers

12 Dec 14
The Scottish government will be able to issue bonds from next April after the UK Treasury tabled legislation to enhance the borrowing powers of Holyrood.

By Richard Johnstone | 12 December 2014

The Scottish government will be able to issue bonds from next April after the UK Treasury tabled legislation to enhance the borrowing powers of Holyrood.

Chief Secretary to the Treasury Danny Alexander today published secondary legislation that will allow the Scotland Office to amend the sources of capital borrowing available to Scottish ministers.

Following the devolution of financial powers in the Scotland Act 2012, the Scottish government will be able to borrow up to a total of £2.2bn for capital investment from next April.

Under current rules, the money would come from the National Loans Fund but new powers will increase the range of borrowing options available.

Alexander said he received agreement from deputy first minister and finance secretary John Swinney and Scotland Office minister David Mundell to implement the change.

‘This is a big step that shows that the UK government is keeping its devolution promise to Scotland. By beginning this process now, we will be able to have legislation in place to ensure that Scotland can issue bonds from April next year,’ Alexander said.

‘Being able to issue bonds will give the Scottish government an additional source of capital funding as part of its new tax and borrowing powers contained in the Scotland Act 2012.

‘By the time we have fully implemented this Act and the Smith Commission's agreement, the Scottish government’s new powers will make it one of the most powerful devolved administrations in the world.’

The UK government first announced in February that the Scottish government would be given the power to issue its own bonds for capital investment such as transport projects, hospitals, schools and flood defences.

These borrowing powers formed part of the agreement following the Calman Commission, which led to the Scotland Act 2012, and is separate to the Smith Commission process on further devolution following September’s no vote in the independence referendum.

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