Scotland to issue its own sovereign bonds

The British government announced that Scotland will soon be allowed to issue its own sovereign bonds – guaranteed by Scotland itself, and not the UK government.

Nicknamed the “Braveheart Bonds” by The Daily Telegraph, the bond offerings will be part of broader and comprehensive transfer of fiscal authority from Westminster to Edinburgh under the Scotland Bill.

The Treasury said the bonds can be issued without further primary legislation.

In addition, the Scots government will also be granted more powers to raise taxes.

On the whole, the Scotland Bill is expected to provide Edinburgh with an additional £12-billion -- currently its has an annual budget of £30-billion to spend on health, education and other public services.

Scotland will also be able to borrow up to£2.2-billion to finance long-term infrastructure projects. However, capital borrowing will be capped at £230-million per year.

The expanded fiscal powers being granted to Edinburgh are part of a series of concessions that Whitehall is providing the Scottish Nationalist Party, which recently gained control of Scottish Parliament.

According to British media, George Osborne, the Chancellor of the Exchequer, said that, the far-reaching changes we are introducing mean the Scottish people and their elected representatives will be much more responsible not just for decisions on public spending in Scotland but also for the Scottish taxes needed to pay for those decisions.”