Chief Secretary to the Treasury Danny Alexander is to launch a consultation into proposals allowing the Scottish Government to issue bonds, contained in the Scotland Act.
The bonds would pave the way for borrowing up to £2.2bn for capital investment infrastructure projects.
A consultation on how the scheme would work is set to be launched on 22 June at a conference on the Scottish economy in Glasgow’s Thistle Hotel, where the Lib Dem MP is one of the keynote speakers.
However, it is understood this launch will also mark the start of a sustained campaign from the Treasury and the pro-Union lobby aimed at teasing a more specific vision from the SNP, of their fiscal strategy for an independent future.
As the anti-independence campaign gathers pace, with the former chancellor, Alistair Darling, at its helm, it will aim to put the Scottish Government under increasing pressure to answer questions such as how the bonds issue could operate post-independence, where the money would come from and what interest rates would be.
In an exclusive interview with Holyrood, Alexander said: “Clearly, the question of how you would go about issuing bonds for a devolved country raises some challenges and could be a positive in the end, but that is something for us to gain people’s view on through the consultation.
“The issues you face in terms of debt issuance as a means of raising funds as an independent Scotland is not something our consultation addresses, because it is about matters within the UK,” he says, “but then perhaps there is a responsibility for the Scottish Government [that] should then be saying, well, this is how we would go about it as an independent country. And frankly, there would be huge challenges and we are seeing that across Europe where small countries are having huge difficulties in their public finances and what would that mean in terms of [the] interest rates they would need to pay, what would the credit ratings be and we have heard from some of the ratings companies on this already.
“Those are questions, big important questions that cut to the heart of how would the Scottish economy function under independence which the SNP are just not addressing right now.” The issuing of bonds allows the Government more shortterm access to capital and could be targeted at investors such as pension funds.
The Scotland Act was passed by Westminster earlier this year and was billed as the largest single transfer of powers in the history of the United Kingdom. It included control over other economic measures including more influence over income tax, but the SNP said it was a “missed opportunity” as it stopped short of demands in areas including devolving of corporation tax.
Meanwhile John Swinney, who will also be delivering a keynote speech at the same conference as Alexander in June, outlined his plans for the future of taxes in Scotland.
From April 2015, the Parliament will be able to introduce and manage taxes on the purchase or leasing of land and buildings – as well as the disposal of waste to landfill.
Last week Swinney outlined plans to replace Stamp Duty with the Land and Buildings Transaction Tax and set up Revenue Scotland, which he plans would administer and collect taxes at a lower cost than HMRC.