Scottish National Investment Bank

– in the Scottish Parliament at on 28 March 2018.

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Photo of Alison Johnstone Alison Johnstone Green

6. To ask the Scottish Government whether the Scottish national investment bank will have the power to refuse to lend to commercially viable businesses that it considers operate against its public-purpose missions. (S5O-01952)

Photo of Keith Brown Keith Brown Scottish National Party

In general terms, it is too early to provide detail on the lending activity of the bank, at this stage. Benny Higgins launched his implementation plan for the Scottish national investment bank on 28 February. The Scottish Cabinet will consider the report and its recommendations over the coming weeks, and will respond in early May. The plan recommends that the Scottish ministers should set the parameters within which the bank should work, by setting a strategic framework that will identify the missions that the bank will need to fulfil. The report also recommends that the bank should be administratively and operationally independent of the Scottish ministers and that it should not just operate to a code of ethics but should go beyond regulatory requirements and adopt a best-practice approach.

Photo of Alison Johnstone Alison Johnstone Green

I thank the cabinet secretary for his response. Can he give assurances that the bank’s investment strategy will, at the very least, be guided by the strongest of public-interest principles—for example, that it will not lend to high-carbon-polluting industries or companies that use poor workers’ rights practices?

Photo of Keith Brown Keith Brown Scottish National Party

As a caveat to my previous response, I should say that it will be for the Scottish Government, through engagement with the wider population—the mechanisms for which are still to be established—to set the missions for the bank. Examples would include the transition to a low-carbon economy, responding to demographic pressures including an ageing population and promoting place-based inclusive growth across the whole of Scotland.

Ministers will consider the strategic framework under which the bank will operate, and will progress the mission-based approach in the Cabinet in the near future. That will be our process but, beyond that, I make the commitment to Alison Johnstone that we will of course, through the relevant committees of the Parliament and in the chamber, present our proposals and have them questioned by Parliament, as usual.

The Deputy Presiding Officer:

We will have two quick supplementaries, please.

Photo of Dean Lockhart Dean Lockhart Conservative

Can the cabinet secretary confirm what percentage of funding for the

Scottish national investment bank will come from financial transactions money?

Photo of Keith Brown Keith Brown Scottish National Party

Dean Lockhart will know, from the Scottish budget, the amount that the Cabinet Secretary for Finance and the Constitution has made available. However, it is a starting position; we are looking beyond that to see what other funding we can get.

As the member knows, financial transactions funding is part of the discretion that the finance secretary currently has, but that is not the limit of our ambitions for the bank, so we are in discussions with Her Majesty’s Treasury to see what might be possible. We would like to see a substantial portfolio of funds being available, some of which will be from financial transactions as Dean Lockhart suggests. I cannot say what the percentage will be until I know the size of the other quantum. We expect to have that in future weeks, and as soon as we have it, I will be happy to let the member know.

Photo of Jackie Baillie Jackie Baillie Labour

The cabinet secretary has already suggested that the

Scottish national investment bank will be capitalised by £2 billion over 10 years. If he is now suggesting that the amount will be higher, I welcome it, because Labour’s proposal is, of course, for 10 times that amount. Does the cabinet secretary consider that the Scottish national investment bank is in danger of being undercapitalised, as was suggested by Jim McColl to the Economy, Jobs and Fair Work Committee?

Photo of Keith Brown Keith Brown Scottish National Party

Without question, even with the £2 billion that has been mentioned, the Scottish national investment bank could transform the Scottish economy.

Of course we would like more funding. Long before the Labour Party got on board, we requested from the United Kingdom Treasury, not least through the Scottish Futures Trust, between £5 billion and £7 billion to enable us to take forward major structural changes.

We have to work with the money that we have. We also have to work with the Treasury to ensure, for example, that we can carry forward balances from one year to the next. That is, unfortunately, the reality of the position that we are in, but we will carry on those discussions. There is no lack of ambition from the Scottish Government about what the bank might achieve.