SNP MP Mhairi Black appeared on BBC Question Time last Thursday.
During the debate, Black suggested that Scotland lacked borrowing powers to make policy decisions that improve the lives of those who live here.
The Scottish Parliament has no borrowing powers whatsoever.
Mhairi Black MP
Ferret Fact Service looked at this claim and found it False.
Evidence
Mhairi Black, the SNP’s MP for Paisley and Renfrewshire South, was appearing on the BBC’s flagship debate programme.
During a debate about the nationalisation of UK water supplies, Black suggested that an independent Scotland would be able to regulate its nationalised water supply properly. She then claimed that Scotland currently had “no borrowing powers whatsoever”.
The Scottish Government’s powers are limited by devolution, with many aspects of the economy reserved to Westminster. This means that the Scottish Government has limitations in what it can do within its budget.
Under the fiscal framework, Scotland’s borrowing powers are limited. However, they do have some ability to borrow within the fiscal rules.
The Scottish Government is able to borrow for both resource and capital spending, but does not have the same powers as the UK Government in these areas.
Resource spending is day-to-day spending on delivering public services like the NHS or education. Scotland is only able to borrow money to account for errors in forecasting or cash management. This can be up to £600m if there is a specific Scotland-based economic shock.
This means the Scottish Government cannot borrow money to spend on services on a discretionary basis.
Scotland has more flexibility to borrow money for capital spending, which covers tangible assets such as construction of roads, hospitals and infrastructure.
The limit for borrowing is £450m per year, with a cap of £3bn in total capital debt.
This is a small amount compared to the overall annual budget of the Scottish Government, which in 2023-24 will run to nearly £59.7bn, and to the borrowing of the UK Government, which in 2022-23 was £139.2bn.
Ferret Fact Service verdict: False
Mhairi Black’s claim that Scotland has “no borrowing powers whatsoever” is incorrect. While Scotland’s ability to borrow is significantly limited by the devolution settlement it is able to borrow to cover shortfalls in resource spending and for capital projects.
Main image: David Woolfall
