Scottish National Investment Bank legislation passes first parliamentary hurdle

A bill to support the set-up of the Scottish National Investment Bank passed its first stage yesterday following a debate in the Scottish Parliament.

Scottish National Investment Bank legislation passes first parliamentary hurdle

Economy secretary Derek Mackay

The Scottish Government said the bank’s primary mission will be to secure the transition to a net-zero economy as it works with businesses to identify opportunities and break down barriers to green investment.

The government has committed to investing £2 billion over 10 years to capitalise the bank, with £130 million committed in the coming year to support its establishment and early activities.

The bank will be a public limited company and ministers will be given the power to guide its strategic direction by setting missions that will address socio-economic challenges.

It is set to be operational in 2020.

Economy secretary Derek Mackay said: “Helping towards our transition to a net-zero economy will be the primary mission of the Scottish National Investment Bank. It will play a part in the work we are doing to tackle the climate emergency, secure a just transition and create new jobs in low carbon industries.

“We also know the green finance market is growing and we want to be ready to attract those investors, and the bank will help establish Scotland as a key location for low carbon investment.

“The bank will become a cornerstone in Scotland’s economic architecture, providing patient and growth capital to support businesses, in addition to financing infrastructure to secure private sector investment. These steps will ensure we are delivering for the economy of today and ready to seize the opportunities of the future.”

Scottish Labour leader Richard Leonard said the best rate of financial return must not be the bank’s sole purpose.

Speaking in the debate, Mr Leonard said: “The people of this country do not simply want a residual state which is reactive, which steps in only at the point of market failure. We need a different allocation of resources than would simply be delivered by the market. That is what the establishment of a Scottish National Investment Bank should be about.

“So the purpose of the bank that we must create with this legislation cannot simply be about the best rate of financial return and the best rate of financial return alone.

“It must be ethical. It must take account of the strategic interests of the wider economy, like the urgent need to tackle climate change. It must be empowered to help build a more equal and a more democratic economy too. It must be on the side of the people - because we live in an economy, which is too often unjust, which is in too many areas inefficient.

He added: “We will not solve every problem in the Scottish economy with this bill and the establishment of a Scottish National Investment Bank. And we need to make sure that this is not another Government proposal overflowing with spin but underwhelming with substance.

“But this bill is a starting point and we can improve on it. We can establish a Bank which is accountable. We can establish a Bank that has clear objects whose overarching aim is to build the economy from the bottom up.”

The Scottish Greens called a fund to transition to net zero to be placed on the face of the bill and for councils to have a stake in the bank.

Local government and communities spokesperson, Andy Wightman, said: “Given the First Minister said that tackling the climate crisis would be the Scottish National Investment Bank’s ‘primary mission’, it’s important we see that reflected in the wording of this bill.

“It must be the absolute statutory priority of this bank to invest in the herculean change we need to see in our economy if we are to tackle the climate emergency in the next ten years.

“Furthermore, the German public development bank is 80% owned by the Federal Govt and 20% by the states.

“Given the vital role that local government plays and will continue to play in tackling the climate crisis and promoting economic development, councils should have a stake in this bank.

“The Climate Bill was disappointing because it committed to no radical or transformational action to lower our emissions. This bill is an opportunity for the Scottish Government to turn its rhetoric into action.”

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