A CAMPAIGNER has told of their “frustration” at a lack of engagement from the Scottish Government over their concerns about the bonds programme and independence.
Economist William Thomson, of Resilient Scotland, previously co-authored a report with Jim Osborne from the Scottish Currency group which raised issues with the way the bonds programme has been designed will benefit foreign investors rather than those living and working in Scotland.
Scottish Government Bonds and Investing in Ourselves argues that as ministers have decided to pursue a wholesale bond rather than a retail bond, approximately £170 million will leak out of the Scottish economy.
Thomson and Osborne also discovered through Freedom of Information (FOI) requests that officials gave “no consideration” to Scotland becoming an independent country when it set up the 10-year programme.
Pursuing the issue, SNP MSP Paul McLennan lodged two written questions on the topic in the Scottish Parliament, hoping to get answers from ministers on how the plan interacts with independence.
However, the responses from Europe, External Affairs and Energy Minister Stephen Gethins did not directly address the questions.
The Scottish Greens have also raised concerns about the Bonds programme, and the role of Israel-linked Barclays involvement.
Co-leader Ross Greer put out a furious statement when he was also given a “non-answer” through parliamentary questions, and accused the Scottish Government of breaching the Holyrood vote to boycott Israel.
McLennan’s first question asked: “To ask the Scottish Government what scenario planning it has carried out to assess the likely impact of (a) Scottish independence and (b) any increase in the perceived likelihood of Scottish independence on future credit ratings and interest rates for new bond issuances and bonds traded on the secondary market.”
In response, Gethins referred to the Scottish Government white papers on independence which “set out this government’s proposals for how Scotland could become independent, and what Scotland could do with the powers of independence”.
“The UK’s approach to managing public finances means that it is paying higher interest rates than other comparable countries,” he continued.
“The full powers of an independent country will give Scotland the opportunity to develop a new economic model, one that is tailored to our circumstances, opportunities and strengths.
“When Scotland becomes an independent country, our fiscal policy would be designed to support improved economic competitiveness and resilience, underpinned by the principle of fiscal sustainability.
“As with any independent country, the macroeconomic framework would evolve over time to adapt to changing economic circumstances, but with all fiscal levers in the hands of the people of Scotland.
“However, fundamentally, the benefit of an independent Scotland is that decisions about Scotland are made by those who live there and they will be the ultimate arbiters in deciding policy matters with Independence just like other independent states.”
McLennan’s second question read: “To ask the Scottish Government, regarding the 10-year horizon for public debt, what assumptions it has made in relation to Scottish independence, and what work it has undertaken to model the impact on the issuing of government bonds in an independent Scotland under scenarios in which the country continues to use sterling for a period or issues its own sovereign currency.”
In response, Gethins directed McLennan to his answer to the previous question.
Thomson told The National: "We have asked several times for an opportunity to meet with Ministers to express our concerns about the wholesale bond programme and we hoped that a more direct approach from a well respected former Minister would have progressed matters.
“So to be none the wiser after the considerable amount of energy and support from the indy movement on this issue is deeply frustrating."
Greer told The National: “Our country needs investment in transport, in homes, in hospitals and schools, but these bonds are not the way to achieve it.
“The Scottish Government can already borrow through existing routes which are cheaper and lower risk. Why would the SNP choose to issue expensive bonds instead, especially when they put another barrier in the way of Scottish independence?
“Borrowing to meet Scotland’s infrastructure demands isn’t just a good idea, it's crucial. The Scottish Government needs to drop this bonds plan and use its regular borrowing powers to deliver the homes, rail lines and public services that our communities are crying out for.
“Scotland’s public finances are under huge pressure right now and risky gimmicks are not the answer to that challenge. The Scottish Government must call time on this idea and start looking towards serious investment plans that are proven to work.”
A spokesperson for the Scottish Government said: “The funding raised from these bonds will help support delivery of the capital infrastructure projects outlined in the Spending Review, while allowing the Scottish Government to diversify its borrowing. Bonds are a standard form of borrowing for governments around the world.
“The Scottish Government’s bond programme is underpinned by high investment grade credit ratings from two global credit rating agencies. These are an endorsement of the strength of the Scottish economy and efforts we are making to drive that forward.
“The full powers of an independent country will give Scotland the opportunity to develop a new economic model, one that is tailored to our circumstances, opportunities and strengths with the fiscal levers in the hands of the people of Scotland.”
