Why the Scottish Government must pause the wholesale bond programme and reevaluate the issuance to consider funding investment from within Scotland.
The focus of the proposed bond programme, as currently drafted, is to encourage the foreign ownership of Scotland’s assets.
The wholesale programme will result in approximately £170 million leaking out of the Scottish economy.
This decision to issue wholesale bonds is inconsistent with the Scottish Government’s commitment to Community Wealth Building (CWB) and directly conflicts with the principles of CWB upon which the Community Wealth Building Act 2026 is based.
An alternative retail bond programme would add £120 million to Scottish businesses and households.
If the Scottish Government is serious about CWB, it must consider how to retain wealth in Scotland’s economy and reduce its heavy reliance on foreign direct investment (FDI) and capital investment from overseas.
The wholesale programme further weakens the resilience of both the Scottish Government and the domestic non-government sector, which comprises households and businesses.
Issuing government bonds is unlikely to demonstrate that Scotland is a more desirable place for international investment. ‘Crowding in’ is highly uncertain.
The credit rating Scotland received to support the bond programme was based on subnational calculations by rating agencies. It has no bearing on Scotland's credit rating as an independent nation and is based primarily on HM Treasury's backstop.
Scottish Ministers have been disingenuous, linking this to Scotland’s independent economy.
Scotland’s immediate and long-term interests will be better served by issuing bonds as retail bonds or, if offering them to institutional investors, to do so exclusively to Scotland’s Local Government Pension Funds.
No planning, consideration, or scenarios assuming Scotland becomes an independent country were included in a process that will likely see the Scottish Government repay a 10-year bond issued in 2026 through 2036.
The Scottish Government must pause the wholesale bond programme and reevaluate the issuance to consider funding investment from within Scotland