First minister unveils bold plan to boost investment in landmark announcement
A SCOTTISH National Investment Bank (SNIB) will be created to boost the economy of the country.
First Minister Nicola Sturgeon made the announcement during the Programme for Government 2016/17 speech.
The announcement follows a recommendation from think tank Common Weal, which first called for a SNIB in 2014. It says the move could save billions of pounds for the Scottish economy and create 50,000 jobs.
“I can therefore announce that we will begin work to establish a Scottish National Investment Bank.” Nicola Sturgeon
The first minister said: "We believe that the time is now right to take a new approach on capital investment. I can therefore announce that we will begin work to establish a Scottish National Investment Bank.
"Benny Higgins, the chief executive of Tesco Bank, has agreed to lead work on developing the bank's precise remit, governance operating model and it's approach to managing financial risk.
"Vital steps that will see this new bank up and running and providing the patient capital investment that the Scottish economy needs for the future."
Tesco Bank CEO Higgins said: “It is a privilege to be asked by the First Minister and the Scottish Government to lead the work on creating the Scottish National Investment Bank.
“It is vital that Scotland puts in place the right structure to develop long-term, sustainable growth for all aspects of the economy.”
Common Weal published a joint blueprint for a SNIB alongside New Economic's Foundation in 2016 that detailed how the venture could drive economic growth through long-term, low-interest loans for investment.
Public investment could also receive a massive boost through the formation of SNIB.
“Today’s announcement of a new Scottish National Investment Bank is a welcome step forward.” Laurie Macfarlane
Further, the bank could be regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Laurie Macfarlane, economist and author of Blueprint for a Scottish National Investment Bank, said:“Today’s announcement of a new Scottish National Investment Bank is a welcome step forward.
"As we have long argued, meeting the challenges of the twenty-first century requires patient, long-term, committed finance – something that Scotland desperately lacks."
But he added a word of caution on the details of the announcement that has the potential to transform the Scottish economy, saying: “There are still many aspects of the proposals that are unknown.
“The most important of these is around scale and scope: will the new institution be granted substantive borrowing powers so that it can invest on the scale required to transform Scotland’s economy? And what does the government want the bank to invest in? A national investment bank has the potential to be truly transformative, but as ever the devil will be in the detail.”
Commenting on the announcement, Common Weal Director Robin McAlpine welcomed the announcement, but also raised concern about how the bank would operate, saying: “This is a much more substantial agenda for government and has a number of genuinely promising ideas in it.
“It’s important that the national investment bank is there to level the playing field for Scottish businesses competing with the likes of Tesco and that we don’t replicate the Tesco model.” Robin McAlpine
“In particular, we’ve been campaigning for a Scottish National Investment Bank for three years and we’re delighted this is now going ahead.
"It is now crucial that this programme is pursued with vigour and that focus goes onto designing the details in a way that delivers maximum impact for communities across Scotland.
“For example, it’s important that the national investment bank is there to level the playing field for Scottish businesses competing with the likes of Tesco and that we don’t replicate the Tesco model.”
Picture courtesy of Scottish Government
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