THE SNP have breached a Scottish Parliament vote for an Israel boycott amid preparations to issue government bonds, it has been alleged.
Last week, the Scottish Government confirmed nine banks which had been chosen to support a £1.5 billion issuance of bonds. Expected later in 2026 or early 2027, the plan will see the Government lent money by private investors in exchange for interest payments and the return of their principal at a set maturity date.
Among the banks signed up was Barclays, which the Palestinian-led Boycott, Divestment, Sanctions (BDS) movement says is “bankrolling Israel’s genocide”.
The BDS movement notes that Barclays has “an agreement with Israel to act as a 'primary dealer' for its government bonds [meaning] it helps Israel directly to raise money to fund its genocide and apartheid against Palestinians”.
In September last year, MSPs in the Scottish parliament backed a motion calling on the SNP Government to “immediately impose a package of boycotts, divestment and sanctions targeted at the State of Israel and at companies complicit in its military operations and its occupation of Palestine”.
Patrick Harvie, the Scottish Green MSP who introduced the BDS motion, said: “This isn't good enough. When a company is so directly linked to arming Israeli forces then they should clearly be covered by any boycott worthy of the name.
“The Scottish Government agreed to our motion to boycott, divest from, and sanction Israel and companies linked to the atrocities being carried out against Palestinians.
“By any reasonable understanding they are breaching this commitment by choosing Barclays as a provider for their new bonds scheme.”
He added: “It is almost a year since the Scottish Parliament voted for our motion, but the Scottish Government has failed to turn words into action.”
A spokesperson for the Scottish Palestine Solidarity Campaign alleged that “despite a genocide taking place and ongoing gross violations of human rights by Israel, the Scottish Government have done nothing”.
“We should pay attention, and the Scottish Government is on notice that their inaction means they are accountable for their failure to prevent a genocide,” they added.
A Barclays statement on allegations that it has helped fund Israel’s war on Palestinians says: “As a global investment bank, we act as part of a syndicate of international banks that connects the world’s largest economies to the international capital markets through weekly debt auctions. This includes the State of Israel.
“We do not provide direct funding through these auctions.”
Deputy First Minister Jenny Gilruth said that "in response to the situation in Gaza, the Scottish Government has consistently advocated for peace, justice and human rights, and will continue to do what we can to support a rapid resolution to the conflict and to alleviate the suffering of the most vulnerable".
Concerns the bonds 'create a barrier to Scottish independence'
Elsewhere, Scottish Green co-leader Ross Greer has called the SNP’s plans to issue Scottish bonds a “gimmick” and called for it to be stopped as it “creates a new barrier to Scottish independence”.
Last year, the Scottish Government was given the same high credit rating as the UK as part of preparations for the bond programme. However, the Financial Times reported earlier in June that fund managers have been urging the SNP to keep the bonds’ maturity below 10 years amid fears that a move towards independence could change that credit profile.
Also this month, a report from William Thomson, of Resilient Economy, and Jim Osborne, from the Scottish Currency Group, said that the SNP Government should “pause” plans to issue bonds, saying that the proposals “will result in approximately £170 million leaking out of the Scottish economy”.
Thomson told The National that the bonds plan will “unquestionably” cost the Scottish Government more to borrow money than they currently pay to the UK Treasury National Loan Fund (NLF).
The economist said he was seeking a meeting with ministers to explain concerns outlined in his report, and added that the Scottish Government was moving forward on issuing bonds to prove “they're not just a big local authority”.
“It's all just ceremonial nonsense,” he said. “None of it is instrumental. None of it actually does any good.”
The Greens said that because the UK Government sets strict limits on the overall amount of money the Scottish Government can borrow, issuing bonds will not increase the funding available, it will only change the source of those funds and the cost of repaying those debts.
The party also warned that issuing shorter-term bonds would put more financial pressure on the Scottish Government over the next five to ten years, “a period in which Scotland’s public finances are projected to be under immense pressure”.
Green co-leader Greer said: “Scotland needs investment in homes, bus and rail services, schools and hospitals but these bonds are not the way to do that.
“The Scottish Government can borrow through existing routes which are cheaper and lower risk. Why would the SNP choose to issue expensive bonds instead, especially when they put another barrier in the way of Scottish independence?”
He added: “An independent Scotland, with all of our immense assets and talents, would clearly secure an excellent credit rating. That is a completely different issue to the Scottish Government’s current credit rating, which was secured for the purpose of issuing these bonds and is based on our place in the UK.
“Giving our Unionist opponents a reason to cast doubt on our prospects of success as an independent nation or to talk up potential costs – real or imagined – would be a major strategic mistake for a pro-independence government.
“The case for independence must be credible, serious and focused on how we can improve people’s lives with the full powers of a normal nation. Why risk undermining that with an unnecessary and expensive bond scheme that will be used against us ahead of the next referendum?”
Deputy First Minister Gilruth said: “The funding raised from these bonds will help support delivery of the capital infrastructure projects outlined in the Spending Review, while allowing the Scottish Government to diversify its borrowing. Bonds are a standard form of borrowing for governments around the world.
“The Scottish Government’s bond programme is underpinned by high investment grade credit ratings from two global credit rating agencies. These are an endorsement of the strength of the Scottish economy and efforts we are making to drive that forward."
