Scottish National Investment Bank will provide £2bn investment in decade

A new Scottish National Investment Bank would be operational by 2019 and provide £2 billion of investment in a decade, MSPs have heard. Economy Secretary Keith Brown said the planned bank could potentially transform the economy to enable Scotland to become fairer and more prosperous.

However the Conservatives warned they would not support legislation to create the bank unless the government streamlines business support.

Labour's Jackie Baillie criticised timid'' funding plans and said Labour would invest 10 times as much.

Speaking in a Scottish Parliament debate, Mr Brown said Cabinet had agreed to accept all recommendations in an implementation plan drawn up by Tesco Bank chief Benny Higgins.

He said the Scottish Government would provide the bank an average of £200 million a year of capital for a decade, enabling it to focus on investment not currently provided by the market.

The bank will be a public body, absorbing the existing Scottish Investment Bank.

It will have priorities set by ministers, with investment types decided by the board, the chairperson and non-executive members who will be appointed by ministers.

A bill to create the bank will be brought forward in 2019. It is expected to operate in shadow form pending the legislation passing.

He said: I believe that a publicly-owned investment bank will become a cornerstone of the economy we want to create in Scotland.

It also has the potential to be truly transformative, operating under a core set of principles and missions, supporting sustainable growth and bringing benefits to individuals and communities across the country, making Scotland in the process a fairer and more prosperous country.''

Tory Dean Lockhart said investment banks can improve economic performance but only as part of a clear framework to support businesses.

He said: Our concern is this clarity, alignment and support for business has been absent from SNP economic policy for a number of years.''

He added: We support many of the objectives behind the bank but the Scottish Government must address the issues we have raised today if it expects our support for these proposals in the future.''

Ms Baillie welcomed the imminent'' start-up date for the bank, saying she had counted nine separate announcements over a number of years.

She added: Having waited this long I would at least have expected the plans to be slightly bolder and more ambitious.''

She said the money being put in was quite timid'', adding:Now is the time surely for radical decisive action.

Our economy is stagnating, the truth is we are flirting with recession.''

She added: Scottish Labour would invest £20 billion over the same period in the Scottish Investment Bank, 10 times the amount proposed by the Scottish Government.''

Liberal Democrat leader Willie Rennie also stressed the need to kick start the economy'' but warned against a repeat ofScottish Enterprise giving Amazon millions of pounds and turning a blind eye to the needs of its workers''.

Meanwhile Green MSP Andy Wightman said the new bank could play a vital role in funding more affordable housing developments.