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U.K., Scotland Sign Agreement Implementing Fiscal Autonomy

  • Treasury says deal implements Smith Recommendations in full
  • Scotland can now invest 3 billion pounds in infrastructure

The U.K. and Scottish governments agreed a new fiscal framework implementing a deal that paved the way for Scotland staying in the union and gives the nation new borrowing powers.

The agreement implements the recommendations of the Smith Commission, which gave new powers to Scotland, including the ability to manage its own budget and invest as much as 3 billion pounds ($4.2 billion) in infrastructure, the Treasury said in a statement on Tuesday. The Scottish government will get 200 million pounds to implement the new powers.

QuickTake Scotland's Indpendence

“The arrangements we’ve reached with the Scottish Government are fair to Scotland and fair to taxpayers in the rest of the U.K.,” Chancellor of the Exchequer George Osborne said in the statement. “This enables us to deliver on the vow we made to the Scottish people.”

Prime Minister David Cameron pledged to give Scotland unprecedented autonomy in order to secure a win in the independence referendum in 2014, in which Scotland opted to remain part of the U.K. The Scottish National Party, which campaigns for independence, won 56 of Scotland’s 59 parliamentary seats in May’s election, reigniting concerns of another independence vote in the future.

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