Set up a Scottish National Investment Bank
Scotland should set up a Scottish National Investment Bank designed to maximise public benefit rather than private profits.
This policy is Common Weal's flagship policy "win" having been adopted by the Scottish Government in 2018 with £2 billion worth of funding committed so far.
Scotland's economy needs investment. Our business sector needs patient, supportive finance. The public sector needs to borrow to build infrastructure in a way that meets the public's interest. The UK banking sector has failed to create a heathy investment environment for the Scottish economy and so now we need a public alternative. A Scottish National Investment Bank will be a bank driven by a public-benefit mission, not by maximising profit at the expense of customers. It's mission will be to help Scotland's economy develop, to support its industry base and stimulate new enterprises, to help businesses grow and improve and to work with the public sector to create world-class public infrastructure. It should become the heart of Scotland's economic development strategy and help to create a more productive, more equal and more ethical economy.
It began with our 2016 paper "Banking for the Common Good"
Our successful campaign for a Scottish National Investment Bank (SNIB), can help transform the Scottish economy.
The bank can deliver public investment, as part of a strategy to replace costly public-private partnerships.
Our 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.
The bank is set up with the purpose of lending to invest, not lending to speculate. It will invest to improve Scotland and it's economy, not to maximise shareholder profits. SNIB will be run with full financial rigour but would be driven by a different ethos: providing long-term, patient funding for projects that meet social and environmental, as well as economic, criteria.
In October 2016 we published a detailed blueprint for setting up a SNIB which you can read here.
The campaign has not been easy. The Scottish Government initially knocked us back without seriously considering the idea.
But we persevered and we took the idea to the grassroots whilst still working constructively with the experts and civil servants who would be charged with setting up and running the SNIB. Teams of our local activists successfully lobbied their local representatives and their party branches and over the subsequent months they built the case and generated the demand for this approach to investment in Scotland. This culminated with a vigorous debate at the SNP's 2017 Spring conference and the unanimous adoption of the SNIB as party policy. This was coupled and strengthened by the Labour party also adopting the policy at Scottish and UK level.
Building on the success of the SNIB campaign, in February 2017 we launched a campaign to create a Scottish National Infrastructure Company. The SNIC would work with the Scottish National Investment Bank to provide sustainably financed, locally procured infrastructure that would remain in public hands throughout. By focusing on sustainability and longevity rather than profit margins, the final constructions would save money in the long run. Finally, the Scottish National Infrastructure Company would act as a centre of excellence to provide training and guidance to enable companies involved in the supply chain to be able to provide the materials and skills required to successfully bid for public contracts. The Scottish National Infrastructure Company can leave a legacy of world-class public facilities for us and generations to come.
In May 2019, the Economy, Energy and Fair Work Committee met to discuss the SNIB and Common Weal was invited to give evidence. This took the form of a consultation submission as well as Robin McAlpine meeting the committee directly to discuss the issues.
On the 4th of July 2019, the Economy, Energy and Fair Work Committee unanimously backed the creation of a SNIB and have requested more discussion along some of the issues that we have identified in particular such as diversifying the SNIB's missions into housing and renewable energy and seeking to clarify the role and responsibility for a stakeholder advisory group within the bank. The official report from the committee can be read here.
On the 21st of January 2020, the SNIB Bill passed its third stage at the Scottish Parliament unanimously and soon after passed into law with a view towards founding the bank later in 2020.
As the SNIB launches and begins its work, Common Weal remains a recognised key stakeholder and we continue to work constructively with the relevant teams to ensure that these campaigns achieve the best possible results.