Meeting of the Parliament 21 January 2020
I support having a Scottish national investment bank. It is fair to say that it has been a long time in coming. I think that John Swinney—clearly behind Richard Leonard in doing so—announced it a decade ago and re-announced it every year thereafter, because there was no money to capitalise the bank. That was until the UK Government came up with financial transaction money, the future of which is in doubt. Keith Brown described it as “funny money” at the time, but we now embrace it as a positive capitalisation of the SNIB.
The Scottish Government tells us that, if financial transactions are discontinued after March 2021—which is a real possibility—the bank will have to rely on traditional capital or the Scottish Government’s borrowing powers. The borrowing limit is £400 million a year, not taking into account the normal Government spending commitments that are made for public sector infrastructure such as schools, hospitals, health centres and roads. There is simply not enough money to do all of that and fund the bank as well.
If that source of funding—financial transaction money—is not there after March 2021, the SNP will need to find £1.5 billion. However, instead of pausing, the Scottish Government is intent on pressing ahead to set up a bank that might not have any money. We need an urgent response from the UK Government, or we are in danger of creating a white elephant.
At stage 1, I asked whether a review had been undertaken of whether that was the most effective means of having an investment bank and whether the Government had considered working with the existing Scottish Investment Bank within Scottish Enterprise. Unsurprisingly, no review had been undertaken in advance of the bill, so there is little evidence-based policy making. I have estimated that the cost to the public purse before the bank breaks even will be £80 million; others put it higher than that. The future remains uncertain, and that is what we should concern ourselves with.
I want the bank to succeed, as the cabinet secretary does. However, I am genuinely concerned. I know that the cabinet secretary has written to the Chief Secretary to the Treasury about increasing the Government’s borrowing limits. Has he had a response or any assurance that the financial transaction money will continue? Can he offer any comfort to the chamber that we are not creating a bank with no money to spend? I would welcome an intervention from the Conservative members, telling me that everything will be okay—but they are not standing up.
Dean Lockhart rose—