Scotland could soon have power to issue gilts
Scottish ministers could soon have the power to issue their own bonds, chief secretary to the UK Treasury, Danny Alexander, is set to tell the Glasgow Chamber of Commerce.
A consultation on the proposal was issued on 22 June, aiming to gather views and evidence on the potential advantages and disadvantages for bond issuance by Scottish ministers, both for Scotland and the rest of the UK.
Issues to be reviewed include value for money for Scottish and UK taxpayers, macroeconomic issues and alternative sources of borrowing.
“This takes forward the commitments we made in the Scotland Act, which represented the greatest transfer of powers from Westminster for three hundred years,” said Alexander.
“I hope that academics, investors and other market participants will respond to this next step in potential further devolution of powers to Scotland,” he added.
The government included a provision in the Scotland Act 2012 enabling it to amend the method by which Scottish ministers can borrow to include bond issuance from 2015 to 2016.
It has committed to consult on whether these powers should be extended to permit bond issuance as part of a £2.2bn borrowing limit.
Under existing law, from 2015 to 2016 the Scottish government will be able to borrow from the UK government through a commercial bank loan, while Scottish ministers can borrow up to 10% of their capital budget each year to fund additional capital projects, up to the overall £2.2bn limit.
This article was first published on Investment Week