Page last updated at 20:24 GMT, Wednesday, 11 March 2009

Formal Scots borrowing power call

John Swinney
Mr Swinney said the inability to borrow was anomalous

The Scottish Government has formally called for powers to borrow money, saying it would be a "significant step forward" for devolution.

The call came in a submission to the Calman Commission, which is reviewing devolution 10 years on.

Finance Secretary John Swinney told the commission the inability to borrow put Scotland at a disadvantage.

Holyrood ministers made the submission in return for Liberal Democrat support for their 33bn budget.

The Scottish Government has been critical of the Calman Commission, as it has ruled out considering the issue of independence.

"Our inability to borrow is clearly an anomalous situation that must be addressed urgently," Mr Swinney stated in the submission.

He argued that paying for targeted short run cuts in taxation through borrowing could help boost demand in recessions by increasing take-home pay.

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