Draft Scotland Act 1998 (Increase of Borrowing Limits) Order 2026

Peter Fortune Excerpts

Wednesday 10th June 2026 General Committees

[The Secretary of State for Scotland (Mr Douglas Alexander)]

I beg to move,

That this Committee has considered the draft Scotland Act 1998 (Increase in Borrowing Limits) Order 2026.

It is a genuine pleasure to serve under your chairmanship, Ms Vaz. I am grateful for the opportunity to debate this draft order, which was laid before the house on 20 April 2026. It is the result of collaborative working between two Governments of the United Kingdom and of Scotland, and it upholds the 2023 fiscal framework agreement, which I will refer to as the 2023 agreement.

The draft order deals with the cumulative borrowing powers of the Scottish Government, and it is not the first time that the House or its Committees have considered such an order. As with the increase in borrowing limits order this time last year, the draft order, if made, will increase the Scottish Government’s cumulative capital and resource-borrowing limits to reflect inflation. It is made under sections 67 and 67A of the Scotland Act 1998, which set out the amounts available to borrow under section 66 of the Act. As specified in those sections, we bring forward the order with the consent of the Treasury. This is the third such order to be brought forward. The first was in May 2024, under the previous Government, and the second was last year, under this Government. The draft order, like all Scotland Act orders, delivers the Government’s responsibilities for the effective functioning of the devolution settlement.

The 2023 agreement sets out that the cumulative limits for capital and resource borrowing will increase based on the Office for Budget Responsibility’s GDP deflator forecast at the time of the Scottish Government’s draft budget. In the 2023 agreement, the UK Government agreed to amend the Scotland Act 1998 to increase those limits as necessary. If made, this draft order would increase the cumulative resource borrowing limit from a little more than £1.83 billion to a little more than £1.91 billion, and the cumulative capital borrowing limit from a little more than £3.14 billion to £3.27 billion.

[Peter Fortune (Bromley and Biggin Hill) (Con)]

Will the Secretary of State give way?

[Mr Alexander]

I have almost finished. I am happy to respond to comments made in the course of the debate.

The draft order will provide the Scottish Government with certainty over the cumulative borrowing limits for this financial year. I wish to make it clear that the Scottish Government remain accountable to the Scottish Parliament on how they use those increased borrowing powers.

In summary, the order will make amendments to UK legislation to increase the cumulative borrowing limits of the Scottish Government ahead of the next financial year. In doing so, the UK Government uphold our commitment to the 2023 agreement. As ever, Scotland Act orders are only possible with the joint working of officials in both Governments. I put on the record my thanks to officials across the Scotland Office, His Majesty’s Treasury and the Scottish Government for their work on the draft order. Such positive collaboration delivers for the people of Scotland.

--- Later in debate ---

[John Cooper]

I thank the hon. Gentleman for a very important question. The GDP deflator is incredibly complex, as are all these matters. We talk about cross-Government working here, and I think there is a genuine attempt by this Government, as there was by the previous Government, to maximise the money available. The system is complex in how to measure inflation—there are many choices to be made. We are here with the GDP deflator, and that is as simple as that. We are not going to debate that today.

It is an oft-repeated canard in Scotland that the so-called Scottish Executive cannot borrow. This myth is a conspiracy theory as fake as the “Capricorn One” fanciful notion of faked moon landings, but it is sometimes perpetrated not only by internet trolls but by elected Members. This matters because it is corrosive to public trust in politics and inimical to the settled will of the Scottish people so clearly expressed in their rejection of separation in the 2014 independence referendum.

It would be welcome for the Secretary of State to indicate what steps this Government might take to puncture this no-borrowing fallacy, because for us to sit here silently, simply ticking off increased powers as part of a devolve-and-forget agenda, is dangerous. It gives succour to those who would break up the United Kingdom—something that would affect every one of our constituents in every part of Britain.

[Peter Fortune]

On devolution, we have to appreciate that the increase in the borrowing limit is underwritten by the whole of the UK economy. I wonder if my hon. Friend knows of any equivalent flexibilities that English local authorities, which are also under huge financial pressures, could use.