Good news for Scotland yesterday. As Common Space noted:
Today Scottish Government published its implementation plan for a Scottish National Investment Bank.
This proposal - spearheaded by Common Weal in our 2016 blueprint - has the potential to become one of the most ambitious projects undertaken by the Scottish Government since devolution. We strongly welcome these plans and are genuinely excited to see them develop. To quote the First Minister, "If we get this right, then this has the potential to be truly transformative”.
First, congratulations to Common Weal, with whom I have worked, on this success. And let's note the upsides, as they do:
- It is to be a bank — A limited investment fund would never be able to reach the scale the SNIB needs nor would it be self-sustaining in the long term.
- It is to be mission driven — The purpose of the SNIB is to work for the Common Good, where ever that lies, rather than just to chase easy profit.
- It is to be ambitious — Which should go without saying but witness previous failed schemes which were simply left to wither on their vines.
- It is to take a long term approach to finance — Many commercial banks seek to return their investment within a very short time thus simply won't countenance projects which need the support of "patient finance". By looking at 10-15 year timescales, and perhaps longer, the SNIB can support projects that simply will not happen without it.
- It will be publicly owned — And hopefully, unlike schemes like the Green Investment Bank, it shall stay that way.
- It will invest in SMEs and public infrastructure — This will be a major part of the bank's operations although it must also go beyond this
- It will have a governance model which recognises its mission and the diversity of Scotland's economy and society — If the SNIB were simply captured by the banking sector, it would fail. If it were to be solely subject to the whims of political advantage, it would fail. The bank needs to have a diverse governance model and there is much in this proposal that it does well to lay a solid foundation for good governance. Importantly, the bank shall have a stakeholder advisory group which can keep the focus on the needs of Scottish society.
So is it enough? No. There's not enough capital. It's constrained by The Treasury. It will not deliver the transformation on the scale needed as a result.
But it is a decided step in the right direction.
If it could deliver a Green New Deal for Scotland it would be amazing.
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Shouldn’t they first be establishing a Scottish Central Bank to fund it? Are they devolved enough to legally do that?
Unfortunately not
I have argued that they should be
I am kind of stuck on Bill Kruse’s point.
Which is not to say that this is not a great announcement or a really positve step. It is. But if they want to get into “truly transformative” territory they may need the backing of a central bank and sovereign currency.
Bill does sometimes offer blind alleys whilst being well within moderation limits and as he often adds value I allow blind alleys as well for others to decide upon
I suppose if we’re thinking Overton Window then it’s at least a good thing from that POV because, here we are, and no doubt so will others be.
Marco Fante says:
“I am kind of stuck on Bill Kruse’s point.
Which is not to say that this is not a great announcement or a really positive step. It is. But if they want to get into “truly transformative” territory they may need the backing of a central bank and sovereign currency.”
Not ‘may need’, Marco. Do need. Why do you think we’re fighting for independence?
It’s not about oil any longer – oil is a horse that bolted. (and was eaten by Thatcherites long before Tesco got into the horse meat trade) Scotland needs to invest in the future and Westminster government is focussed firmly on the past.
In the meantime the only fit-for-purpose political party in the UK does what it can to ameliorate the iniquities of the worst.
Are you paying attention, Mr Corbyn ? Do you see how far behind the curve you are?
Well done everyone involved in this! I wish it every success. Sorry I am not in a position to offer you a substantial boost to get it off the ground as retired but should my Lottery ticket produce funds I will definitely share with you. It is about the future for our children . Thanks to you all for doing something practical about that as many of ny generation feel we are leaving them witg a terrible mess to sort out and few optioins with which to tackle it. I wish you well. Will not be easy but “We CAN do it!!”
I’m also a pensioner, but with the good fortune to have some savings (the benefit of having a thrifty wife!) With those savings currently earning peanuts in interest, and even that being taxed, I will be more than happy to stick it into SNIB bonds/gilts or whatever it gets called even if there is no interest at all.
My return will be that it will be for the betterment of Scotland.
I’d agree
I would buy them
I’ve been banging on about a public investment bank for years.. I’m a member of an American group which spreads the word as there are several US states doing this.., If the SNP publicised the SNIB properly I would think that many people across the U.K. would put their money there to help it succeed ..
I would also invest in this.is there somewhere to be kept abreast of developments ?
Hi Richard,
In the current climate, as I am sure you are aware, local councils have had their funding cut and cannot borrow for housing.
They can however borrow for ‘commercial interests’
Would some form of regional investment bank along the lines of the above be feasible?
I think so
But beyond the mayors who can run it?
I believe the Green Party’s David Malone, who might be more familiar to some as blogger Golem IV, has suggested Indian bankers as likely candidates for being able to run local banking systems here in the UK. Beyond this, I know nothing.
This is very welcome news! I look forward to following how this develops.
Richard – have you looked at how the Development Bank of Wales (https://developmentbank.wales/) has been set up? I understand it’s had numerous teething issues, and we would certainly do well to understand the problems they’ve faced so we might avoid them ourselves.
In a word – no!