Common Weal, Friends of the Earth Scotland and the New Economics Foundation (NEF) call on the Scottish Government to set up a Scottish National Investment Bank
SNP Spring Conference delegates unanimously passed a motion to set up a Scottish National Investment Bank (SNIB). The proposal should now be pursued by the Scottish Government, Common Weal and other advocates of the policy proposal have argued.
A SNIB could be established now by the Scottish Government, could be a major creator of jobs and become a huge boost to the Scottish economy. The motion, proposed by Kirriemuir and Dean branch of the SNP, reflected this potential.
Common Weal has worked alongside Friends of the Earth Scotland and the New Economics Foundation in developing the proposals for a SNIB across two reports, one outlining the broad vision in March 2016 and another in October last year developing the details of implementation.
Using Scottish Government figures for job creation from capital investment, the report states that such a bank could directly support the creation of 50,000 jobs “within just a few years of being established”.
It could also be used for public investment, being part of a strategy to replace costly public-private partnerships. To illustrate the scale of the potential benefit to the public finances, the report estimates that the Scottish Government would have saved a total of £26 billion if the projects financed through Private Finance Initiative (PFI) and Non-Profit Dividend (NPD) schemes had instead been financed by a SNIB.
Ben Wray, Head of Policy for Common Weal said:
“The SNP membership has spoken – now the leadership should listen. A Scottish National Investment Bank is exactly what the Scottish economy needs in the post-Brexit landscape: tackle chronic under-investment, provide the patient capital small and medium sized Scottish businesses are not getting and create high-paying jobs.
“In countries like Germany a state investment bank is the norm – there’s no reason why that shouldn’t be the case here, and the Scottish Government could set it up now. It’s an idea whose time has come.”
Laurie MacFarlane, economist from the New Economics Foundation said:
“The passing of today’s motion reflects the strength of the economic case for establishing a new Scottish National Investment Bank . Meeting the challenges of the twenty-first century requires bold and ambitious plans for financing and directing investment in a smart, inclusive and sustainable direction. But with public budgets in decline, economic uncertainty increasing and a banking sector still focused on short-term shareholder returns, the need for fresh thinking around investment is greater than ever.
“A new Scottish National Investment Bank would channel investment to the areas of the economy most in need. In doing so, it would boost productivity, expand the business base, speed up the transition to a low carbon economy and support the creation of thousands of new jobs. It would also generate billions of pounds of savings for the public purse by providing a low cost alternative to expensive private finance schemes. It’s now up to the Scottish Government to act to turn it into a reality.”
“We now have a real chance to construct a modern form of public investment that promotes beautiful, cost-effective public buildings that serve the need of our citizens first.” Malcolm Fraser
Malcolm Fraser, award-winning architect said:
“This is a pivotal moment, recognising that if we cede responsibility for building our essential public infrastructure, such as our schools and hospitals, to private finance – to Bankers, in essence – we get ruinously-expensive, shoddy buildings, that put the interests of fancy finance before people. We now have a real chance to construct a modern form of public investment that promotes beautiful, cost-effective public buildings that serve the need of our citizens first.”
Robin McAlpine, Director of Common Weal said:
‘There is now a substantial momentum building up behind the idea of a Scottish National Investment Bank and that support is coming from many different places. I very much hope this can now be explored properly by the Scottish Government.”
Ric Lander, Divestment Campaigner for Friends of the Earth Scotland, said:
“Tackling climate change requires long-term investment. We can’t rely on the private sector to provide investment to secure our future. National investment banks in other countries fund projects like renewable energy, public transport and insulation: this is exactly the kind of investment we need to avert dangerous climate change.”