Blueprint for a Scottish National Investment Bank
Policy Paper
Credits — Laurie MacFarlane
Overview
This paper presents a detailed case for a Scottish National Investment Bank that would provide secure, stable finance for long term investments in Scotland.
Investment – both by the private sector and by government – is crucial to the long term economic, social and environmental health of any economy. As part of the UK, Scotland has a longstanding problem of underinvestment relative to other countries. This has contributed to low levels of productivity, growth and innovation.
In many countries, national investment banks play a key role in financing and directing investment. In this report we develop the arguments for a Scottish National Investment Bank (SNIB) and set out in detail what a SNIB might look like and how it could be established in the Scottish political, legal and economic context.
Key Points
The SNIB’s overarching mandate should reflect a broader economic strategy developed in a democratic process, controlled by the Scottish Government, and reviewed periodically.
The core activities of a SNIB should be to support investment in infrastructure and SMEs and to direct investment towards innovation for social and environmental objectives.
The SNIB should be publicly owned but operated independent as a fully commercial entity, free of day-to-day political interference.
Robust ownership and governance structures should be put in place which promote the highest levels of transparency and accountability.
The Scottish Government should inject £225 million of capital, increased to at least £1.35 billion over six years.
The SNIB should be allowed to raise funds on capital markets by issuing bonds up to a leverage of 2.5 times its subscribed capital.
The Scottish Government should request that the UK Government grant SNIB dispensation from Treasury rules which would otherwise mean that SNIB lending counts against Scottish Government borrowing limits.
