Earlier this year I launched a report I authored with Friends of the Earth Scotland, Common Weal, New Economics Foundation and Move Your Money in the Scottish Parliament. The report calls for ambitious whole-scale reform of the Scottish banking sector by creating a Scottish National Investment Bank and a network of locally controlled “People’s Banks” to make a more sustainable and stable economy.
In summary, the proposals think that:
- Not-for-profit “People’s Banks” should be
established in Scotland’s regions to offer
banking services to local people and business.
They would be overseen by representatives
of local people and bank workers with support
from financial experts, and be capitalised by
national investment bodies and local authorities.
- By investing solely in their respective regions,
People’s Banks would help money circulate within
local areas and serve the public interest.
Local banks would be part of a “People’s Banking
Network” to share risk and cooperate on training,
marketing and the operation of key services such
as payments systems.
- A “Scottish National Investment Bank” would
help establish these institutions by offering seed
funding and structural support. The bank would
be institutionally independent from Government
but publicly owned, and mandated to promote
through its lending sustainable development and
- A national investment bank would leverage
Scotland’s existing infrastructure budget to invest
in projects which private banks are unwilling or
unable to fund. We argue that with only a modest
6.5% (£225 million) of the Scottish Government’s
capital budget invested as subscribed capital this
new bank would leverage a total of £3.4 billion to
invest from year one. Scotland’s local government
pension funds, valued at £28 billion, could invest
in bonds issued by such a bank, giving them a
reliable mechanism through which to invest in
The full report is available here alongside a summary document.
Today we saw Jeremy Corbyn announce in Glasgow plans to boost infrastructure spending with the launch of a Scottish investment bank if Labour win the next election. I strongly welcome these proposals which build upon our own. The devil of course is in the detail but this gives hope to the possibility of building cross-party support.
Banking reform has been left off the agenda for far too long. It is now back on the table, lets keep it that way.