THE Scottish Greens have called on the First Minister to halt plans to issue £1.5bn in government bonds, warning that the move risks becoming an expensive “gimmick”.
Ross Greer, co-leader of the Scottish Greens, argued that the proposed scheme could increase long-term borrowing costs and create new political barriers to Scottish independence.
The Scottish Government’s £1.5bn bond programme is scheduled for launch in late 2026 or early 2027. On Friday, ministers confirmed that nine major banks—including HSBC, Merrill Lynch International, and Barclays—have been appointed to advise on the framework.
However, economists have warned that raising funds through international bonds is more expensive than using the National Loans Fund, which provides low-cost loans to public bodies. Financial analysts have also warned that constitutional debate could drive up interest rates on any long-term Scottish debt.
Under current devolution rules, the UK Government sets strict caps on Holyrood’s borrowing limits. As a result, issuing bonds will not increase the total funding available to the Scottish Government; it will only alter the source and repayment costs of the debt.
Mr Greer said: “Scotland needs investment in homes, bus and rail services, schools and hospitals. Governments borrowing to build this kind of infrastructure makes total economic sense, but these bonds are not the way to do that.
“The Scottish Government can 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 build the infrastructure Scotland needs isn’t just a good idea, it’s essential. The Scottish Government should drop its bonds plan and use its regular borrowing powers to deliver the homes, rail lines and public services so urgently required.”
Mr Greer added: “An independent Scotland, with all of our immense assets and talents, would clearly secure an excellent credit rating.
“That is a completely different issue to the Scottish Government’s current credit rating, which was secured for the purpose of issuing these bonds and is based on our place in the UK.
“Giving our unionist opponents a reason to cast doubt on our prospects of success as an independent nation or to talk up potential costs – real or imagined – would be a major strategic mistake for a pro-independence government.
“The case for independence must be credible, serious and focused on how we can improve people’s lives with the full powers of a normal nation.
“Why risk undermining that with an unnecessary and expensive bond scheme that will be used against us ahead of the next referendum?”
