CALL FOR MAJOR OVERHAUL OF GOVERNMENT INVESTMENT PROGRAMMES
A paper published today by two leading Scottish economic figures argues for the creation of two new Scottish Government investment vehicles to sit at the top of a simplified economic development structure.
Andrew Wilson, former SNP MSP, RBS economist and Chair of the First Minister’s Sustainable Growth Commission, and Alan McFarlane, Chair of Reform Scotland and founder of Dundas Global Investors, also call for urgent co-operation between the UK and Scottish governments to allow Scotland to access debt-funded capital in order to accelerate the emergence from the Covid-19 crisis.
Today’s paper – Investing for Recovery – proposes:
- co-operation by both governments to access tens of billions of pounds of debt-funded capital
- the creation of Scottish Government Investments, to be an active shareholder of publicly-held assets, staffed by experienced industry personnel (examples of assets would include quangos, public corporations and infrastructure assets)
- the creation of Equiscot as the asset management arm of the Scottish National Investment Bank, based on Singapore’s Temasek model, which would be able to invest for value and return, and which could also provide a home for local authority pension schemes
- decluttering of Scotland’s economic development organisations to remove duplication and waste, create more independence and attract a different level of expertise
Commenting, Alan McFarlane said:
“Significant events need significant responses, and events do not get more significant than Coronavirus. We need to urgently ensure the Scottish Government has the ability to access tens of billions of debt-funded capital to underpin the recovery.
“This is about government, not politics, and we need co-operation between Downing Street and St Andrew’s House to ensure Scotland has the tools to refine UK initiatives in the national interest.”
Andrew Wilson said:
“Now is the time to be bold, ambitious and clear. Prioritisation also means stopping what isn’t a priority or isn’t working as it should. The creation of Scottish Government Investments as an expert shareholder and Equiscot as an investment arm of the new national investment bank would learn the right lessons from around the world and could provide a long-term source of sustainable revenue to the Scottish Exchequer.
“Low cost debt provides an historic opportunity if invested well, we need to act now to secure it. We can invest it to support the recovery and manage our shareholdings commercially but in the public interest. We need our whole recovery and development effort to be focussed, ambitious and world class”.
Reform Scotland Director Chris Deerin said:
“Scotland needs big ideas to navigate the seismic economic consequences of Covid-19. The time is right to rid ourselves of shibboleths in many areas of Scottish social and economic practice, and Reform Scotland is hosting these policy ideas on our Melting Pot blog.
“Alan and Andrew are serious economic figures in Scotland, and their calm, apolitical proposals should be listened to in both Westminster and Holyrood.”