New investment bank 'could provide £2bn'

A new Scottish National Investment Bank could be operational by 2019 and provide £2bn of investment in a decade, MSPs have heard.

Economy Secretary Keith Brown said the publicly-owned bank could potentially transform the economy.

He suggested it could help Scotland to become fairer and more prosperous.

But the Conservatives warned they would not support legislation to create the bank unless the government streamlines business support.

Labour's Jackie Baillie also criticised the plans, describing them as "timid" and saying Labour would invest 10 times as much.

The Scottish government unveiled plans for the investment bank in its programme for government last year.

Speaking in a Scottish Parliament debate, Mr Brown said cabinet had agreed to accept all recommendations in an implementation plan dawn up by Tesco Bank chief Benny Higgins.

Public body

He said the Scottish government would provide the bank an average of £200m a year of capital for a decade, enabling it to focus on investment not currently provided by the market.

The bank will be a public body, absorbing the existing Scottish Investment Bank.

It will have priorities set by ministers, with investment types decided by the board, the chairperson and non-executive members who will be appointed by ministers.

A bill to create the bank will be brought forward in 2019. It is expected to operate in shadow form pending the legislation passing.

He said: "I believe that a publicly-owned investment bank will become a cornerstone of the economy we want to create in Scotland.

"It also has the potential to be truly transformative, operating under a core set of principles and missions, supporting sustainable growth and bringing benefits to individuals and communities across the country, making Scotland in the process a fairer and more prosperous country."

'Address the issues'

Tory MSP Dean Lockhart said investment banks can improve economic performance but only as part of a clear framework to support businesses.

He said: "Our concern is this clarity, alignment and support for business has been absent from SNP economic policy for a number of years."

He added: "We support many of the objectives behind the bank but the Scottish government must address the issues we have raised today if it expects our support for these proposals in the future."

Ms Baillie welcomed the "imminent" start-up date for the bank, saying she had counted nine separate announcements over a number of years.

But she said the money being put in was "quite timid", adding: "Scottish Labour would invest £20bn over the same period in the Scottish Investment Bank, 10 times the amount proposed by the Scottish government."

Green MSP Andy Wightman said the new bank could play a vital role in funding more affordable housing developments.

Liberal Democrat leader Willie Rennie also stressed the need to "kick start the economy" but warned against a repeat of "Scottish Enterprise giving Amazon millions of pounds and turning a blind eye to the needs of its workers".