Scottish National Investment Bank must have a guaranteed ‘public good’ mission

Common Weal has proposed a ‘stakeholder’ governance structure made up of a diverse cross-section of the economy

THE Scottish National Investment Bank (SNIB) must have a series of ‘public good’ mission guarantees to prevent it ever becoming a typical for-profit bank, Common Weal has argued in its submission to the public consultation on the implementation of the new bank.

The submission to the public consultation on the implementation of SNIB, which closed on Monday 20 November, can be read in full here

Common Weal has led campaigning for the introduction of SNIB including over two reports (here and here), and argues in its submission that the bank must be structured to “make investments in enterprise and infrastructure in Scotland which works towards a 'public good' intervention in the economy as a whole”, proposing a series of approaches which can ensure that.

These include:

  •  A clear set of mission statements which clearly define the lending criteria of the bank, including re-balancing economy sectors, promoting diversity of ownership models in business, supporting innovation and meeting social and environmental imperatives.
  • A ‘stakeholder’ governance structure which includes business and worker representation in governance, and which looks at the potential for mixed public ownership across Scottish Government and local authorities so that there is no one majority stakeholder, preventing the bank from ever being privatised.
  • The bank should lend to both private-sector and public institutions, expanding investment in public infrastructure like housing and transport at low-cost.
  • The bank must be established with full banking functions and of sufficient size to be able to lead and direct a new kind of economic development. The paper proposes a number of necessary steps to capitalisation in order to achieve this.

“This is a really big opportunity for Scotland, but we really need to get this right. A half-hearted attempt to do this will only leave an institution that no-one really comes to love.” Robin McAlpine

Commenting on the submission, Common Weal head of policy Ben Wray stated:

“The implementation of a Scottish National Investment Bank is a huge opportunity to establish a vehicle that can lead economic development in Scotland for the public good. Those tasked with designing the implementation plan must not settle for half-measures, or a bank that is subordinate to the existing Scottish financial sector.

“It must be a major publicly-owned bank with the capacity to lend for public-sector investment and incentivise businesses to work to social and ecological imperatives. It also must have a governance structure made up of businesses and civic organisations as well as bankers, and to prevent it ever being sold-off by a future government which doesn’t understand the value in public-led economic development, like the UK’s Green Investment Bank.”

Robin McAlpine, Common Weal director, said: “This is a really big opportunity for Scotland, but we really need to get this right. A half-hearted attempt to do this will only leave an institution that no-one really comes to love.

“This needs to be well designed, mission-driven and bold in its scale and ambition if it is to have the impact it should and if it is to become a permanent, trusted and respected part of Scotland’s economic future.”

Comments

Peter Dow's picture

Peter Dow

Thu, 11/23/2017 - 11:41

Actually, a new "investment bank" with no new money to invest isn't worth the cost of the nameplate on the door.

Scottish Enterprise already has a "Scottish Investment Bank", details at this link.
https://www.scottish-enterprise.com/about-us/what-we-do/investment/sib

There's no difference in concept between that existing government investment bank and the new "Scottish National Investment Bank".

This is SNP-numpties REARRANGING THE DECK-CHAIRS ON THE TITANIC.

What matters is THE MONEY.

If there is NO MORE MONEY then it doesn't matter if you change the name of the "Scottish Investment Bank" to "Scottish National Investment Bank" and bring in somebody from Tesco to run it.

The problem is that we have a numpty SNP First Minister - Sturgeon - who AGREES WITH a bad fiscal framework that leaves the Scottish government with NOT ENOUGH MONEY to invest.

So Sturgeon has to be TARGETED for political condemnation and ridicule for signing and sticking by that bad deal fiscal framework.

We can't get beyond this failure of government for so long as we are stuck with a First Minister who insists on agreeing with a bad deal fiscal framework.

The Scottish National Investment Bank WILL FAIL - not necessarily go bankrupt but simply under-deliver simply because there's NO NEW MONEY - not enough capitalisation, meaning NO new £ billions a year borrowed interest-free from the central bank.

And there won't be £ billions a year more, not with this FISCAL FRAMEWORK which Sturgeon signed up to and which those running Common Weal keep letting Sturgeon off the hook about, refusing to hold her, Sturgeon, accountable for signing up to that bad deal fiscal framework.

The only way to avoid failure is to do what Common Weal have refused, refused and refused again to do - HANG STURGEON on the FISCAL FRAMEWORK HOOK.

Sturgeon's fiscal framework allows a few £100 million a year of borrowing for a few years before the total debt limit is reached so yes there could be some £ millions invested in the investment bank for Sturgeon's Tesco pal to have fun investing in a few projects and one or two might be quite nice.

But THAT scenario is not "growth and prosperity of the people" but rather it is the FAILURE of the investment bank which follows from FAILURE to secure macro economic investment that is only possible from a new fiscal framework allowing for £ billions a year more of interest-free borrowing.

Don't be Fiscal Framework Fibbers.

We owe the truth to ourselves.

Isembard

Sat, 11/25/2017 - 14:08

An interesting paper about a Scottish National Investment Bank.
I note that Mr. Dow is still ranting about the First Ministers' 'choice' of fiscal framework. I would reply to him that the Scottish Governments' fiscal and monetary position is not chosen, it is imposed, and changing the first minister to a person of his liking will not change that. I would also advise that his copious use of upper-case words and perhaps misogynistic vituperation of the First Minister does not advance his case. Calm doon man.

More importantly, I would expect that the Government of an independent Scotland would have the excellent social goals outlined in the paper as part of its remit anyway. I would hope that the SNIB described in the paper would, after independence, become a department of the Government central bank (the Independent Bank of Scotland?) and perform its functions with the security of the Central Banks' funding of its sovereign currency.

I really can't understand why the Scottish Government isn't doing as much as it can legally do to behave as though it is already an independent country, including the establishment of a useful SNIB and a parallel Scottish currency that would make people used to the concept of a sovereign currency and evolve into it as time passed. With Brexit looming, the time for caution is past.

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