Meeting of the Parliament 21 January 2020
To pick up on one of Willie Rennie’s points, I say that the bank’s emphasis has to be on preparing Scotland for tomorrow’s world, not on dealing with the consequences of yesterday’s world. Therefore, concentrating on things such as renewable energy is extremely important in the climate change debate.
However, the bank will be important not just in that sphere of influence. Artificial intelligence will be a major growth area and I believe that it will also have the impact of being a job creator. Robotics and animal life sciences will also be major growth areas. Scotland already has a presence in space technology—I am not talking about the Greens’ policies—with some world-beating developments based in Glasgow and elsewhere. The opportunities are enormous, and I hope that when the history of this period comes to be written by economic historians, it will be marked as a major turning point in the history of the Scottish economy.
I will mention two or three areas in which the bank should take early action, and in which the Government needs to look at the framework within which the bank will operate. The first is exports. Our export performance, in terms of our population and propensity, is way below par, and we have enormous opportunities to expand our export capacity. National investment banks in other countries help their exporters. In evidence to the committee at stage 1, it was pointed out that the assistance that the Finnish Government provides to exporters in Finland is far greater than the totality of all the financial support, in terms of credit guarantees and all the rest of it, that the UK Government provides to the entire UK. Finland, which has a population of 5 million, helps its exporters more than the UK helps our exporters—not per head but in total. That is not just in relation to manufactured goods. For example, a major beneficiary of the export finance that the Finnish investment bank provides is the shipbuilding sector. Shipbuilding is a sector in which we have potential to expand our presence.
Exports is where the bank should go out and create demand for its services. A lot of companies might not realise that if they get the funding to export on a much grander scale, they will have the potential to create many more good-quality jobs in Scotland.
Secondly, on the overall investment, I hope that the bank is so successful that future Scottish Governments have to increase the capital that is available to the bank to meet demand. We should all hope that.
The important point is that this is not just a £2 billion investment, and over the period of 50 years that Derek Mackay mentioned—which I hope to see—it does not have to be just £17.5 billion. It could be three, four or five times that, because one of the central features of the bank is that it will lever in private capital, including capital from elsewhere. If it does that on merchant bank ratios, or even near to them, we could be talking, over the piece, about £100 billion instead of £17.5 billion. That is extremely important.
Let me also say this. Members should look at the experience of the Scottish Development Agency, which was set up in 1975. It provided many similar services, but because one or two of its investments turned rotten, we abandoned the whole exercise. That was utter madness.
We have to say to the Scottish national investment bank, “Take risks.” There is no point in setting it up if it does not take risks, and if it takes a risk that does not work out, let us not hammer the bank. Let us not politicise or weaponise the SNIB in Parliament. Let us say, “Go out and take more risks.” In merchant banking, only two out of every 10 risks pay off, but those two pay for the other eight many times over. Let the bank be not only about public ownership, but about public enterprise levering and mobilising private capital to transform the Scottish economy.