 The next item of business is debate on motion 2127, in the name of Kate Forbes, on celebrating the first anniversary of the Scottish National Investment Bank. I would invite members who wish to contribute to the debate to press their request-to-speak buttons now, as soon as possible, or place an R in the chat function if they are joining us online. I call on Kate Forbes to speak to and move the motion. Cabinet Secretary, around seven minutes please. Today's debate marks the first anniversary of the Scottish National Investment Bank, which formally takes place on 23 November. Many of us have spent the last two weeks immersed in COP26 and on climate change, a generational worldwide challenge. That has only reinforced the original vision of the bank and the missions that were set for it. The bank and its ability to offer patient capital and to draw in private investment to address critical challenges like climate change—and I just transitioned to net zero—is more crucial than ever. If we want to achieve our goals on climate change, housing and demographic challenges, now is the time for innovative public sector finance. The bank's ability to also work with the private sector and our enterprise agencies is essential in supporting projects and businesses to grow across Scotland. I will. I am grateful to the cabinet secretary for giving way. I certainly have constituents who have businesses operating in the net zero space who would welcome engagement with the Scottish National Investment Bank but are presently having difficulty understanding how to access the bank. Can the cabinet secretary outline to us how people should go about approaching the bank? Is it through Scottish Enterprise or is there some other route? The member asked an important question and I will go on to explain how the bank sits alongside Scottish Enterprise. The bank has obviously only been operational for just under a year. It has been building its functions as well as making investments, which is quite remarkable for a start-up. Individuals should approach the bank directly. The chief executive, Ailey MacTaggart, I am sure, would welcome that approach. The form of financing that the bank offers will not be for every business. It may be that the grants and loans that are available from Scottish Enterprise, particularly for early-stage businesses, is best from Scottish Enterprise rather than the bank. I start by reflecting on the point that structural change, such as the change that I have just outlined, benefits from cross-party support. The bank, at its inception, enjoyed that cross-party support to the credit, I think, of everybody involved. I hope that that cross-party support can continue, perhaps made easier by the fact that the bank is and will always be operationally independent of ministers. I want to start my comments by reflecting on why we set up the bank. As Murdo Fraser has already alluded to, we already support many SMEs accessing finance, but evidence at the time, which is still applicable, suggested that, for Government investment to have an impact, it needed to be big. It needed to have a scale and a skill set to match the private sector with which it seeks to engage. We deliberately committed £2 billion in initial capital for the bank, a scale of ambition significantly greater than for earlier initiatives and a statement of our intent for the bank's impact over the longer term. Having made a strong start in its first year, the bank is already delivering against its missions and actively investing in new technologies for the future, creating the environment for additional private investment and leading in the creation of new markets. That should positively affect the scale and the direction of private investment alongside Scottish Government capital and commitment to the bank. I am grateful to the cabinet secretary for giving me a hint. She is quite right about scale, so it is with concern that I note that financial transaction money coming in the coming financial year is significantly down on previous years. Given that it is the primary source of financing, does that call into question the ability to scale? If so, what is the Government's plan to address that? I would dispute an element of that. What we have seen is that financial transaction is actually being higher than was expected next year but then falling considerably in years 2 and 3. The question still stands in terms of how we will provide that finance. We are committed to doing £2 billion of funding. We have hoped to do that in financial transactions, but our commitment remains the same. That means ensuring that whether it is capital or financial transactions, we deliver on that. That is not to say that it is not hard. It is extremely hard in terms of those long-term commitments when you see FTs and capital falling. All of us would reflect on the scale of the challenge ahead and the need for public finance to work very closely with private finance. The mission element of the bank's objectives is our hugely important part of the original statement of intent. The bank's missions are supporting that just transition to net zero. They are focused on improving places and allowing people to flourish through innovation. Indeed, the mission focus—and, of course, it is the first mission-based bank in the UK—was such a good idea that the UK Government is now copying it for the UK infrastructure bank. Just today, the bank has announced a £13 million investment into the Iona wind partnership to accelerate the delivery of the Iona onshore wind pipeline in Scotland, taking advantage of Scotland's natural capital to help to achieve our net zero targets. The missions are important because, through those missions, the bank is here to deliver long-term outcomes, not outcomes based on electoral cycles. The bank does not just want to invest but to do so intelligently alongside private capital in order to make and shape markets with public purpose at its core. In its first year, the bank has not only built up its capabilities from an investment team of two to a team of 30 and above, but it has also made investments, which is a remarkable achievement and to the credit of the chief executive, Ailey MacTaggart. First of all, I apologise for being just a few minutes late to deal with an urgent call. Can I ask the cabinet secretary—in that context, I agree with what she is saying in terms of longer-term planning. Is it not the case, however, that we have to have some degree of timescale so that the measurement of the outcomes that she has just referred to are clear? Therefore, people who are wanting to take advantage of the facilities that the National Investment Bank will offer can be measured more effectively. I think that the point is very well made, and it is highlighted in the Conservative amendment today, in terms of the need to have metrics that look beyond just immediate political returns. The bank is working on that. As I said, it is still a start-up and it has an obligation, for example, to publish metrics that look not just at the financial commercial returns, but also at the social and environmental returns. We need to make sure that the KPIs that they work and the bank and with the Scottish Government are working on that. In terms of the long-term objectives, I think that this is a challenge for all of us in this chamber in terms of how we measure success. If the bank does its job well, yes, there will be a commercial return, but there will be other returns, too. My hope would be that those returns outlive, perhaps all of us, this parliamentary term. In terms of the investments, when the First Minister launched the bank last year, it was with a £12.5 million investment in M-squared, a laser technology company. Since then, the bank has made great strides in becoming the financial institution for Scotland that we need and expect. It has made a number of investments, whether it is a £1 million investment in R3IOT to scale up its pioneering satellite technology, £2 million in forever for vehicle charge points, £3 million in indie nature to create a manufacturing plant in the borders, £6 million in one of the most exciting investments in Sunamp to develop thermal energy storage technology or heat batteries, a company that has now gone on to secure a major export agreement to China during COP and £6.4 million with NOVA innovations to help to expand their production of innovative tidal turbines, generating zero-carbon energy in remote communities. I thank the cabinet secretary for giving way. She described a really exciting portfolio of investments. One of the big problems that Scotland strategically faced is start-ups to early commercialisation, which very often ends with Scottish companies being subject to foreign take-overs. Could a potential opportunity with the bank being taking strategic investments in those companies to protect them from predator take-overs that prevent them from becoming those big commercial players in the world that we could build in Scotland? That is an important point. I know that those are areas of discussion with the bank. If you think of their three missions, one of them is to place. In other words, they want to ensure that the investments that they make have a lasting legacy in particular locations—perhaps locations where there are a higher number of disadvantaged communities. If the jobs all leave, that is not delivering on the core mission of place. As I close, the point with the bank is that it has an obligation to deliver commercial returns, but it also has an obligation to the people of Scotland. This is not a Government's bank, this is not a Party's bank, this is the bank for the people of Scotland, and the obligations that it has is to deliver on a long-term basis to change our country. The need for the bank remains clear. It will help to drive financial innovation and channel investment at scale into the areas of the economy that offer solutions to the biggest problems facing Scotland. That is only one part of our set of ambitions, but I hope that all of us today can welcome what the bank has achieved as a start-up in just under a year of operation. I move the motion in my name. I call Liz Smith to speak to a move amendment 2127.1, around six minutes. Thank you, and I move the amendment in my name. When it comes to national investment banks, just as the case is the case for many other financial institutions, their purpose has to be abundantly clear, not least because they are obviously underpinned by the public purse for which government is rightly held accountable, but they must also be able to demonstrate that, in terms of the key economic indicators, whether that is in productivity, investment, job creation, innovation, growth, whatever it might be, that they will be able to deliver better outcomes for the nation as a whole, as the cabinet secretary said. Can I begin my contribution by looking at each of those in turn? First, with regard to the need for the Scottish National Investment Bank, about which this Parliament last year was agreed in principle, we are still very much on the Conservative benches agreed that a little bit more has to be done to clarify the central purpose of the SNIB, because despite the missions that are referred to in the Scottish Government motion, the central purpose has never really been completely clear. I think that the cabinet secretary would be the first to admit that, even within the SNP ranks, there was some dubiety back in 2014, 2015 and again in 2016 about what that purpose should be, because John Swinney was obviously talking about whether we should build on what had been the existing investment bank, and he said that there wasn't going to be a new one. We also know that, in response to my colleague Dean Lockhart at the time last year, there were concerns about how the investment bank, the new bank, would articulate with the other growth agencies, which I think is an absolutely key point, and where the additional money would come from. In that regard, I have some sympathy with one part of the Labour amendment, if not in its entirety, because I think that Daniel Johnson is raising an important issue about some of these principles as well. Of course, we know too that in 2014, Nicola Sturgeon spoke about the main role for the new investment bank that was being, and I quote, to provide patient capital investment. By 2019, that had slightly moved on a little bit to the principal aim of financing net zero technology investment. That's laudable, but the goalpost had slightly shifted. I think that, in terms of the coherency, there's maybe just a bit of an issue to be debated from that. I'm not speaking on behalf of myself, but I'm speaking on behalf of quite a lot of people in business who feel that there is that lack of coherency. I'd be genuinely curious to Liz Smith's views, because being operationally independent, obviously the temptation for government is to want to micromanage investments and therefore to be overly prescriptive about what they should invest in. Quite clearly, businesses then come to me saying, we asked the bank for money and we didn't get it, but, on the other hand, we wanted to create the missions to be quite broad. I think that there is a balancing act there in terms of breadth versus prescription, and I wondered where she fell on that balance. Liz Smith, there is undoubtedly a balance to be struck, but I think that the key thing that business is asking is to have a little bit of clarity around what is expected of them when they make an application. Particularly when the Scottish National Investment Bank is going to deliver something, my concern about it just now is that, while it's a good idea in principle, we haven't really got the criteria as to what makes a successful investment and how that delivers in terms of the rest of the macroeconomy. I think that that's the point that many of the people in the Scottish Conservatives making this time last year is about how it all fits together. I agree with the point that Daniel Johnson made about what is the role of the Scottish Enterprise in all this and how does it all fit together. Those are the questions that businesses want and we have to try to address that. I have read quite a bit about the investment strategy and I tried to drill down on some of the answers that I have posed. I also tried to find some minutes of board meetings—maybe I wasn't looking in the right place—but I couldn't find them. I think that it's really a case of that clarity of purpose. If it's patient capital—which it is and that's important because that's about the longer term and the cabinet secretary is quite right to say that this is not a Scottish Government thing, it's not a political party thing—it does matter for the future growth of the economy in big time. Therefore, as I say, I think that we have to get some clarity on that. For us, there is a really serious issue about SMEs, many of whom, particularly just now, are struggling to quote with debt. They're struggling to make ends meet effectively. Those are companies that I think are really wanting to know a little bit more about what is the Scottish Government's role in supporting SMEs because they are the bedrock of the economy. Nobody doubts that. How does that all fit together? Deputy Presiding Officer, I just finish that the cabinet secretary knows that we are supportive of the principle of the Scottish National Investment Bank as we set out both in the chamber and in committee last year, but we also feel quite strongly a year on that it's not the right time to be judging just how successful this bank can be because it's about the relationship with the other economic agencies, particularly when it comes to growth and entrepreneurship innovation. I think that we still have a lot to do just to be able to demonstrate how it's going to be so beneficial to Scotland. Thank you very much indeed, Ms Smith. I now call on Daniel Johnson to speak to a move amendment 2127.2, around five minutes, please. Without doubt, we are facing the greatest moment of economic upheaval in around 80 years. In that context, the debate around industrial strategy, the role of patient capital, the role of the state in terms of investment, is clearly welcomed by Labour. However, the issue that I have and we have on these benches is that, one year on, rather than celebrating the creation of the investment bank—which, indeed, we do—we really need to be asking the question of what's next. We need to be asking ourselves what role it should be playing within that recovery that we have to ensure happens. We should be asking ourselves about what its role is within transition further to the COP, but, instead, I think that we have a Government motion that is a little bit complacent. If I may, I think that, listening to the Cabinet Secretary, there's not a word that I would disagree in terms of the need for an investment bank, but really what she was doing was rehearsing the logic for creating it rather than exploring what its strategic challenges are and how they have changed in the light of COP and in the light of the pandemic, because, undoubtedly, they need to. However, I think that, even in more narrow terms—and I was grateful for a response to my intervention—there are serious questions about its long-term financing, because, even at £2 billion, it's questionable whether it will really achieve the scale at which she correctly—just in a moment, I'll take it—identifies as being really critical to its success. We need to see £200 million or thereabouts per year, but we also know that the financial transaction money is reducing. I know to quote the Cabinet Secretary that that is a headache, but there's not a word of that in the Government motion about how they are going to address that. If the Cabinet Secretary has something else to add, that would be very grateful for their intervention. Just two points. One is that, obviously, we need to distinguish the bank in terms of its objectives. It needs to deliver a return, and, in delivering a return, it will, hopefully, become self-sustainable. It also has an objective to crowd in and leverage private investment, so I don't think that anybody is suggesting that £2 billion is sufficient in and of itself to meet the challenges, but the whole point of the bank is to add value by being able to leverage private investment. We know, post-COP26, that there is substantial private investment looking for a home. I want that home to be in investable propositions in Scotland. That is important. The ability to leverage and draw in wider private investment is critically important, but that is not really my question. My key question is how are we going to achieve that £2 billion of capitalisation itself? Indeed, we cannot have patient capital if the bank is not sufficiently capitalised. However, there are broader issues regarding enterprise support and policy in the round. Even despite the creation of the bank, and this is a point that I have raised in Parliament before, the Government is spending approximately 40 per cent less in real terms on enterprise support than it was 10 years ago. Nor has the focus regarding enterprise support improved. Five years ago, indeed, the Government spent a great deal of time discussing the need for streamlining and simplifying the enterprise support landscape. However, since then, we have seen the creation of two new agencies and three new boards. The truth is that enterprise policy has not just seen an erosion in funding, but the bodies and the system that the Government has put in place are more confusing. There is a need to address that. Again, the Government has failed to use the opportunity of this debate to do that. The motion mentions a role for the Scottish National Investment Bank in terms of the net drive for net zero. That is important, but we need to develop on precisely how it should do that and the focus. I welcome investments that have made to date, such as that in Nova, named checked by the Cabinet Secretary. However, I met renewable firms yesterday and they were clear that much more needs to be done to encourage innovation and growth in this sector. We are simply not learning the lessons that Denmark learned 30 years ago when it seeded the creation of wind turbine industry there. Nor are we seeing any proposals, as suggested by agencies such as Satis Scotland Enterprise, for the Investment Bank to act as an aggregator so that this crucial sector and indeed others can benefit. Furthermore, the Scottish National Investment Bank was created to provide finance when the market fails to. The last 20 months have seen the greatest disruption to business, as usual we could imagine. The impacts of Covid, which in turn has created supply chain chaos, has left businesses in turmoil. We need to understand the role that the bank can play so that businesses can weather the current short to medium-term instability to realise longer-term success. Again, we hear nothing from the Government in today's motion. The Scottish National Investment Bank is welcome, but let's be clear that the motion and the use of parliamentary time in this way has a missed opportunity. We face big challenges and we need to make big changes and the State Investment Bank has a critical part to play. That is why we raised the issues in our motion, why I moved the amendment in my name, because the Government should be using its parliamentary time to discuss these big issues, to invite big ideas. We will not always agree, but the Government might find it useful if it dared to use parliamentary time in this broader and more ambitious way. There is a little time in hand, so if you take an intervention, you will get the time back, but that is not an invitation to extend your four minutes otherwise. As someone who for many years has been concerned about banking in general, I must declare that I still remain an ambassador for the fair business banking APBJ at Westminster. I am grateful that, for once, I can make a speech positive of an important aspect of banking that is helping investment in business, focused on the future and building success. The SNIB has three bold ambitions. Some would say that those are too ambitious that they will be difficult to achieve. I agree with the latter, but to me, the former, where boldness and audacity of ambition can only ever be strived for, is exactly the point. Already, we can see that, in its first year of operations, the SNIB has been pursuing its guiding missions and strategy to real effect, and it is a tribute to everyone involved. Scottish Financial News reports that, in its first year, the bank has agreed deals worth an estimated £160 million across eight projects. Five of those projects are focused on contributing towards net zero developments, two on harnessing innovation and one on building communities. I feel that it would have been understandable if the first year of operations was solely focused on building institutional capacity and engagement, so such early investments supporting critical areas are to be greatly welcomed. We all know that the model required for patient capital is different as is attitude to risk, and perhaps during the course of this debate, we will be able to focus on that more when we look at the work of Scottish Enterprise as compared to that of the SNIB. Of course, where patient capital is investing for the future, it is likely to be some years yet before we can properly measure the effect of the bank's investment strategy. Final point, I am sure that I am not alone in being heartened by an open declaration of ethics and good governance that encourages institutional behaviours that rest very easily with our financial tradition in Scotland. During the course of this debate, it is important to emphasise the ethics around SNIB. However, such progress brings its own challenges. In the light of COP26 and considering the needs of the Scottish economy, there is so much that we need to do, particularly in relation to our net zero ambitions and supporting innovation. I would like to put on note the comments of Willie Watt, the bank's chairman, when he spoke in Glasgow at COP26. I think that we will all have heard this, but for the record, the Scottish Government has given a promise of £2 billion over the first 10 years of the bank's life. It is insufficient to crack the missions. We need to be able to raise third-party capital, and we want to earn the right to borrow on our own balance sheet. I agree with that statement. Given the lack of borrowing powers—real borrowing powers—available to the Scottish Government, it is, in some respects, remarkable that they have had the foresight to make such medium-term funding commitments. However, had we a much more effective and appropriate fiscal framework in operation—or indeed, if we were independent—we would be able to borrow to invest and do so much more. I hope that, briefly, the minister and her closing remarks may reflect on the following questions. Does the Government agree with Willie Watt that, to achieve the bank's mission, we need to be able to develop the bank's ability to raise third-party capital, or she may want to reflect further on her comments about leverage? Does the Government agree that, in renegotiating the fiscal framework, it is in Scotland's interest to ensure that the Government has significantly enhanced borrowing powers to enable further Government investment in the SNIB? I applaud the early work of the SNIB. I look forward to the stage. It being merely an orduve for a more substantial course in the future. Thank you, Deputy Presiding Officer. I apologise to you and to colleagues that, due to unforeseen circumstances, I am not able to be chamber with you today or to take interventions. As we know, the creation of the Scottish National Investment Bank on the various guises was a long time coming. Words have become action is a positive and the creation of this bank earned qualified support across this chamber, and I believe that this chamber is still largely behind it. In the last session, I was a member of the economy committee that led on the SNIB bill. The creation of a bank also played a part in a number of other areas of the committee's work programme. There is a lot to be said about the approach taken to the SNIB, but I will have to limit myself today to just a few key areas. One is the continuing issue cautioned against by the committee of a cluttered landscape for enterprise support in Scotland. There were concerns that a new institution could add to an already confusing array of bodies, funds and agencies. This was an important enough concern to see John Swinney drop proposals for a development bank in 2016, calling instead for enhancing the remit of existing bodies. Perhaps inevitably the last two years have seen this situation balloon even further as Covid support and post-pandemic support have played an important role in keeping businesses operating. If the SNIB is to be its own institution, then it must be one that is collaborative that works in tandem with other organisations in the enterprise space. Another key issue is the regional element. We must not forget that in Scotland it is more than just one economy. Yes, we are part of a highly integrated UK single market with the flow of goods and services, but on a local level we see differences within Scotland, how the Highlands and Islands in the south of Scotland are quite different from the central belt, or even at a more granular level how small island economies like mine work. On consequence of the banks creation has been to leapfrog the regional focus of the existing enterprise agencies. In my own region we can look to the work of the Highlands and Islands Enterprise, which carried on the tradition of the Highlands and Islands Development Board a body with a very specific focus on what would now be called a holistic regional growth, or even levelling up. The SNIB is a new body working in these areas, and one without the links built up over decades. But a national investment bank can, with work, be a local bank too. The committee pointed to the model of the Welsh Development Bank with offices across Wales and better integrated with local economic development agencies, but it became clear that this was not the direction in which the Scottish Government was travelling. If, as was posited at the time, SNIB's solution was to work closely with the enterprise agencies like High to build on their local knowledge and promote similar social objectives, then it is far from apparent in their current investment portfolio. My third area that I would like to touch on today is one of purpose. There were warnings that the diversification of the bank's objectives would stifle it from having a clear mission. I appreciate the stresses that such an institution will have promoting economic growth through patient capital and promoting innovation, investing sustainability, and sustainably supporting work towards net zero and investing in communities. The main concern voiced during the passage of the SNIB bill was that the bank would risk trying to do too much, but it now appears that its risk is one of inertia, at least in relation to its core objectives. However, if we were to make a real assessment of progress, the information emerging from SNIB must be expanded more detailed. Deputy Presiding Officer, the challenge behind publicly sponsored investment in business is to find clear purpose. To go back to first principles, simply replicating the role of private finance in investment fails to add value, but, as we have seen with SNIB, the purpose has to be clear, well understood and provide more than just an abstract vision. The worry must be that this purpose seems, if anything, less clear than it was in the early stages of the bank's inception. Combine that with a lack of clear performance indicators and we have a report card that we cannot, in all sincerity, mark properly. The SNIB is now part of our economic framework, but, while it may be, there is a reasonable cause for impatient in seeing evidence that is playing an important role in that landscape. The Scottish National Investment Bank is a vital ingredient in our recovery from Covid and in our future prosperity. In other countries across the world, we have seen Governments use their extensive borrowing power to invest in projects that are strategically important. Here in Scotland, of course, we have very limited borrowing powers. The SNIB was set up three missions by the Scottish Government to support transition to net zero, to build communities and to promote equalities, alongside being able to harness innovation in a way that enables our people to flourish. As has been mentioned before, SNIB was to be provided with £2 billion funding over the next 10 years. Only recently, in committee evidence, we have seen estimates by the Scottish Government's statutory advisory of the Climate Change Committee that Scotland will need to invest £5 billion a year over the next 10 to 20 years to meet its strict net zero targets. Willie Watt, SNIB chairman, stated that we need to be able to seed fund and leverage much of that funding opportunity. He then goes on to say that the alignment of making good investment and it makes sense for climate change and to making commercial returns is an important combination. It is a combination that we want to foster and encourage. SNIB has made an encouraging start with a profit of around about £828,000 in the period since it was opened 12 months ago. Accounts for the period revealed growth profit of around about £3.8 million, with total equity of investments worth around about £31 million. In total, it made eight investments worth £160 million across the period. That includes the £6 million for Sunamp in my constituency that the cabinet secretary mentioned earlier on. For innovative heat batteries, I will be visiting Sunamp in the next few weeks. The team is also looking to expand to £45 million from £30 million. On the ability to grow SNIB, Willie Watt commented that we are humbled by the commitment, but it is insufficient to crack the emissions that we have been given, so we need to raise third party capital. We have also mentioned and heard from the cabinet secretary that it is also seeking the FCA authority to borrow on its own balance sheet and raise capital from the private markets, which is incredibly important. When SNB was endorsed following Ben Higgins support, the First Minister described the plans as truly transformational on a different scale from earlier government initiatives. She also said that this is a clear message that Scotland is a country ambitious on its growth aspirations, a country that is adaptable to change and a country that supports businesses across all stages of the business growth life cycle. The bank will be crucial as we compete in a global market to attract inward investors. Scotland remains top choice outside London for investors. That is vital post-COP26 that the cabinet secretary mentioned before. The EY's 2021 attractive survey showed that Scotland remains a prime location for international companies considering foreign investment. Again, it is really important that we are talking about investment-required post-COP26. Scotland's FDI is outpacing Europe and the rest of the UK. It has reinforced that its position is the most attractive allocation for foreign investment in the UK outside of London, a position that it has held since 2014, with a 5 per cent to 9 per cent increase in FDI projects. Growth in FDI in Scotland outpaced the UK and Europe, with Scotland's share of UK foreign investment growing from 9.1 per cent to 11 per cent. The EY report also examines the performance of Scotland and the perception of the UK and Scotland's destinations for FDI. The EY report included a survey of 2,000 international investors. The report included an increase in investors who rank Scotland as the most attractive part of the UK to publish and establish operations. Deputy Presiding Officer, in conclusion, imagine an independent Scotland with borrowing powers like any other country supporting investment from all over the world. Scotland has almost invented a modern world—telephones, penicillin among others. Voltaire said that we look to Scotland for all ideas of civilisation. We can be that world leader, but we need the powers of independence to allow us to do so. Deputy Presiding Officer, my remarks this afternoon are made not because we want the Scottish National Investment Bank to fail but quite the reverse. They are made precisely because we want the investment bank to succeed. We want to avoid the socialisation of risk and the privatisation of rewards. We want this new publicly owned bank to be a pivotal part of the active, innovative, developmental state that we have always needed but which is now needed more than ever as we deal with the pandemic, the end of furlough, Brexit and the climate change crisis. The Scottish National Investment Bank should be at the very centre of a Scottish Government industrial strategy, at the very centre of a plan for good quality jobs that people can live on. It should be driving the just transition to a net zero carbon economy, promoting economic democracy inequality and building community wealth, but there is precious little sign of this from the Government. It is claimed to have delivered a wide range of investments is wide of the mark. Almost three quarters of the money allocated by the bank so far has gone to just one project, which is run by a specialist asset management company, an intermediary vehicle whose advisers include the chairman of Circo PLC and the global head of healthcare at the private equity group 3i, two multinational corporations with an active interest in the privatisation of public services. I am not suggesting that the bank's day-to-day operations should be run by Government or by Parliament but this is a public bank. It should at all times be run in the public interest for the people, by the people and not in the interests of bankers and private equity asset strippers. My question to Liz Smith about whether the member thinks that the Government should be more prescriptive in terms of ensuring that the bank is not operationally independent. Does the member have a vision for us that there is a genuine question for bank being more prescriptive rather than leaving it to the independence of the bank? I am just about to come on to that because this is why we say again today this afternoon that there should be a wider range of economic including trade union voices on the bank's main board to bring wider experience, accountability and engagement. Back in January 2020, on the day Parliament voted through the legislation to create the bank, I warned the cabinet secretary's predecessor that the investment bank as established lacked courage and ambition. It bore the hallmarks of too much tame mediocrity and remained woefully undercapitalised. I was also intrigued to read just a few days ago the chair of what the Government describes as this mission-based investment bank, Willie Watts, on his assessment that the Scottish Government has given us a promise of £2 billion over the first 10 years of the bank's life that it is insufficient to crack the missions. Let me make this final point to the cabinet secretary. Your predecessor would not listen to those of us who make constructive criticism in the lead-up to the creation of this public bank. I hope that the Government will listen, will hear and will act on those who make constructive criticism now, including the chair of the bank who, not Parliament, but the Government itself appointed. That would not be a sign of weakness, but a sign of strength. It would demonstrate scrutiny, accountability and democracy at work. I hope that it is a positive, long-lasting outcome that will result from today's short parliamentary debate. We, in this Parliament, are great at identifying problems. Sometimes, though, we are less good at identifying solutions to those problems. The Scottish National Investment Bank offers a great opportunity and a good example of one such solution. We might ask what the problem is and why the problem has not been solved by other approaches. The problem here is, of course, the inability of the market to appropriately analyse risk and allocate resources to address the serious risks and challenges that we face. All too often, finance is made available to recognised investment opportunities rather than things that we need to create a better future. Banks who are investing in coal mines long after the risk of investing in coal should have made such investments inappropriate. Those same banks refused to invest in wind energy or other renewables early enough or at scale. The costs of those decisions are not just felt in return or lack of return on investment. They will also be felt in accelerated climate change. But back in climate destruction, rather than clean energy, is not the only market failure. We know that investor conservatism stifles innovation and has prevented Scotland's wonderfully creative citizens from turning their ideas into action. The failure of the market here to allocate resources effectively is not just a question for investors. It is a question for all of us, and we need to address that. The Scottish National Investment Bank must also do this and should do this in two ways. Firstly, by being open to investment in innovation, and secondly, by linking that investment to socially useful missions. I think that the bank has done a reasonably good job in its first year in the first of those approaches. It is more open to innovation and that has underpinned the success that we have seen in just less than 12 months. The fact that the bank is mission-based is very welcome, but it is in the design of these missions where they are real opportunities. Opportunities for us to achieve the change that we need, the change that will renew our society and build a new clean economy, the change that will deliver the support systems that future generations deserve. Let us look at ways in which we can develop those missions. I think that there are three things that we need. We need to clearly identify the problems that we have, to bring, secondly, to bring possible solutions to those problems to bear and finally to make those solutions work. SNIB plays a vital role in making those solutions work by financing them, but we need to develop our thinking about how problems are to find in the first place, how we can bring to bear the maximum social contribution to those solutions and, in all of this, how we can better include our citizens, because it will be through democratic renewal alongside the systemic changes that SNIB and others allow for that we will transform our society. That means that we need to route those missions in social processes. We have recently had a Scottish Climate Assembly and we now need a clear process for the implementation of the recommendations of that assembly. We need to connect the social process of democracy, policymaking with implementation and then we need to develop on-going approaches that allow for our learning and mission definition to be refined and constantly renewed. So the outcomes of the climate assembly need to feed into the design of missions for SNIB. We need to build participation into the design of missions based on deep understanding both of the problems and of the possible solutions. We know that the perceived wisdom of the market does and will continue to fail us, so we must build new, data-rich, well-informed understandings that can lead us to connect problems with solutions with widely supported social action to allow us to meet the climate challenge to make more livable places and to support our physical and social infrastructure. I welcome the Scottish Government's recognition that we cannot leave our future up to the market and I welcome the work of SNIB over the last year, but we have so much more to do and I hope that we can find ways to properly understand the problems that we face and the opportunities that we have because only by defining the missions appropriately can we invest in the right things for a better future. This debate marks a tremendous milestone, one year since the launch of the UK's first mission-led investment bank, and it has hit the ground running. Amidst the most testing conditions for businesses in recent history, since the bank's launch, we have seen an investment of approximately £160 million into a portfolio of eight projects spanning net zero innovation and place-based solutions. In preparing for this debate, I look back on the debates on the bill that established the bank and colleagues at that time pointed out a historical gap in Scotland. Much of what was down to an institutional obsession with short-term returns and quick wins. This is a globally pertinent problem. Economic decisions remain too closely aligned to private interest in public good. That is why the establishment of the Scottish National Investment Bank is a momentous achievement in this Parliament's history. We have just finished COP26 in Glasgow. It is clear that we need long-term investment focused on sustainable development and innovation to meet the climate emergency. I note the calls for increased capitalisation in line with the high ambition of the bank's aims, but we must also remember that, while the bank is mission-led, it is not philanthropic. It will see returns of those investments, commercially minded but publicly accountable. The central point is structural reform in the way that we think about investment. The bank's returns will be recycled across its investment portfolio. It does not account for investment from other sources driven by the availability of patient capital. The bank, through its aims, would lever capital from elsewhere. Risk-tolerant investment, which ensures traditional fixations on short-term profitability, cannot be continued and the importance of patient capital in a recovery cannot be overstated. With respect to Opposition motions, I would advocate reciprocal patience and longer-term thinking. The initiative, in its first year, is already made a series of exciting and worthwhile investments, and it will naturally take time for the bank to reach its full potential. We want to see the bank achieve in its missions, supporting Scotland's transition to net zero, building communities and promoting equality and harnessing innovation. The missions are aligned with social interests, and that is why investment should be in the name of public good. Opposition parties need to also consider how they would reconcile the demands for capitalisation meeting their ambitions, especially when we do not have the full gambit of economic powers. If I could finish by just mentioning a particular point about fair work, fair work principles will underpin and enhance the work of the bank, both as an employer and a lender. I understand that the Cabinet Secretary for Finance issued a fair work direction to the bank, and I would urge reporting on the arrangements of that direction to be made a priority. Fair work is central to the Scottish Government's economic strategy, and we will lead, for example, and promote fair work principles to employers across the country. Fundamentally, if we are serious about a just recovery from the pandemic, the mission-led investment that is founded upon fair work principles is key. Thank you, Deputy Presiding Officer. It seems strange that today we have this debate from the Scottish Government celebrating an anniversary of an institution that, by all accounts, is yet unproven, and as yet we do not know, will play a key part of investing in Scotland's future, or will be a drain on public finances. There are a number of things that are yet unclear with the Scottish National Investment Bank, and the first of those things is the setup and administration costs. For the timescale up to the year-end 2020-21, the Government seems to have spent £18.5 million, but with the head count rising rapidly to £32 million and set to rise further, we need to be careful that we do not create a bloated agency that will maintain a lean, efficient investment bank that delivers for the people of Scotland. A concern that I have, and many others have shared today, is that there seems to be duplication of other investment and work that other Scottish Government agencies seem to be doing. In any expensive duplication, surely, it cannot be a good use of resources for the Scottish taxpayer. For example, the M-squared deal that was mentioned earlier involved the provision of development capital that has been provided for years through Scottish Enterprise. In addition, £40 million is given to a fund that will be used by places for people to invest in the provision of affordable housing. However, the Scottish Government also provided £40 million of loan support when it was launched in 2018. Both awards seem to involve Scottish Government funding being used to support things that the Scottish Government was already supporting. If the bank is doing more, then I guess there will be an impact in the future for agencies such as Scottish Enterprise. I read with interest the bank's annual report and noticed that the bank seemed to make a profit on the value of its investments in 2020-21. I think that it was mentioned by Paul McClellan earlier. That is all unrealised fair value gains, but with those investments having no quoted price anywhere it will take time to see if those profits come to fruition. That is quite key because we have to be cautious when it comes to estimating the value of investments of this new bank and to ensure that we are being prudent and realistic when it comes to reporting on profits. That brings me on to the next point and that is regulation. At the net zero committee in September, they heard that the bank currently remains unregulated. I welcome the assurance from the chair of the bank at that committee that that is being looked at, but perhaps there should be a higher priority for both the bank and the Scottish Government to ensure that the people of Scotland can have the confidence and assurance of the bank's operating practices. However, I welcome the ethical investment policy of the bank and support the policy to transition to net zero. During the evidence session to the net zero committee, the chief executive of the bank mentioned the net zero technology centre in Aberdeen and its expertise and the positive impact that will bring for the future energy development. I hope that the bank can work closely with the net zero technology centre and tap into the excellent projects that are being nurtured there, provide the capital required and help to lead an increase in the renewable energy sector and protect the jobs of thousands of workers in the north-east. One thing that I have learned as a council leader over the last four years is that government of all levels cannot do everything and fund everything themselves. We need to attract private finance and I am not clear how the Scottish National Investment Bank will attract the private finance. I know that it has been touched on by the cabinet secretary, and I hope that we will hear in our summon up the plan and the progress that I am bringing to private sector finance that will be required going forward. I hope that we can look back at the Scottish National Investment Bank in 10 years' time, can see realised profits, can see new technologies being helped and developed here in Scotland, can see our net zero ambitions being realised by the investments that we are making, and I hope that we can look back and see real jobs created by its investments, and that will be the true time to celebrate. Today's debate in many ways has been a missed opportunity. Instead of just looking back on a year of the Scottish National Investment Bank, we should have been more forward looking. Labour's long supported the establishment of a national investment bank, but as a key part of the wider but sadly missing industrial strategy, we need to tackle the structural problems in the Scottish economy, including the too often short-term approach to investment. As Richard Leonard said, the Scottish National Investment Bank should be at the very centre of a Scottish Government industrial strategy, at the very centre of a plan for good quality jobs that people can live on. It should be deriving the just transition to net zero carbon economy, promoting economic democracy and equality, and building community wealth. It is clear that the scale of the ambition from the Government and the funding that is available to the bank are not at a level to deliver that transformational change. I think that we all want to be as ambitious as possible. £2 billion is a significant amount of money, which Willie Watt alluded to. The member will know that, in a fixed budget, to invest more requires us to take it from elsewhere. That is a challenge, which is precisely why we are trying to use it to leverage private finance. The cabinet secretary is absolutely aware that the Government has borrowing powers, but the problem is that the Government has cut investment on our economic agencies over the past few years. That shows a lack of priority when it comes to this Government. The concerns over the lack of investment were echoed by the chairman of the bank himself last week when he said that the funding that is available is insufficient to crack the missions. Daniel Johnson also highlighted that there is even uncertainty over whether the limited commitment from the Government funding will actually come from. We know that financial transactions are a substantial element of the budget for an investment bank but also are enterprise agencies, Scottish Enterprise, Highlands and Islands Enterprise in the south of Scotland. The UK spending review did mean that we will have a substantial reduction to Scottish Government's financial transaction allocation in the future. Although the finance secretary said again today that the commitment to capitalise the investment bank remains undiminished, she has failed to say exactly where that funding will actually come from. If it is to come from the existing capital budget, there has also been no commitment from the cabinet secretary that it will not simply be taken from the already stretched capital funding budget for economic development. It was also the Scottish Government's expectation that the bank itself would cover its costs by 2023-24 but we know that the Government funding will not be adequate enough to make the investment for the bank to become self-sufficient within the next three years. It was noted again that the cabinet secretary said only today that she hopes that it will become self-sufficient. With many businesses struggling to survive, never mind flourish following the impact of the pandemic, it is more critical than ever that there is significant investment in Scotland's business sector to deliver recovery in our economy. The national investment bank should play a major role in this recovery by financing Scotland's economic development and providing the support needed for businesses to grow both ethically and sustainably, but it needs to have the right finance in place to deliver. That is also the case for our enterprise agencies. Despite enterprise support being more important than ever before, as Daniel Johnson rightly highlighted, the Government spending is 40 per cent less in real terms than was spent in the final year of the last Labour Administration. We have to properly fund but also repurpose Scottish Enterprise as a genuine business recovery agency working in partnership with other agencies and business gateway to support our small businesses to recover and to thrive. In what, as Daniel Johnson and Jamie Halcro Johnson also described, has become an increasingly cluttered landscape, we have to ensure that our agencies are better co-ordinated to deliver that one-stop shop approach to economic development or businesses are crying out for. Myrddol Fraser and Liz Smith highlighted that businesses are often unsure who to contact for support and how our agencies coordinate and work together. With COP26 leaving Glasgow, we have heard a lot from the Scottish Government about their commitment to green transition claims that Scotland will be a world leader in tackling climate. However, as Daniel Johnson highlighted, the SNP's record on green jobs is too often spin over substance. It failed to meet its target, delivering just 21,000 jobs out of the 130,000 that were promised by 2020. We need a Scottish national investment bank worthy of its name, properly funded, working in partnership with all its agencies, delivering that one-stop shop for business and focusing on economic recovery. That means restructuring and growing the bank so that it can provide seed funding for new ideas, offer investment for capital for good projects and support businesses to transition towards greener and more digital futures, all while creating jobs and supporting our good work practices. From what we have heard today, it is clear that the Scottish national investment bank is a positive initiative, but it still lacks ambition from the Government to deliver. Scottish Labour has long said that the SNP's proposals for the bank do not go nearly far enough in establishing a financial institution that will drive Scotland's economic recovery and adjust transition one year on, and that has not changed. There has been a short but useful debate in teasing out some of the issues around the Scottish national investment bank. The motion before us from Kate Forbes invites us to celebrate the bank's first anniversary. I think that what we have heard in the debate makes it clear that it is probably too early to be celebrating the success of the bank. We will know in a few years' time whether the bank has been a success. We will see what level of return we have seen on the investments that have been made and we will judge its success at that point. At the moment, we are looking at a work in progress. Liz Smith said at the very start that the Scottish Conservatives have supported the information of the Scottish national investment bank, but not without concerns about how it might function in practice. It is clear that there is a need for clarity around its role. One thing that came out of the debate from all different sides is that the exact purpose of the Scottish national investment bank is not well understood. We heard different visions from the chamber, from different political perspectives, from Richard Leonard, from Maggie Chapman, from Douglas Lumson and others, with different views as to what SNIB should be doing. We also know that, in the business community, people are not clear as to what SNIB is there to do and when it is able to support them. Nor are we clear what the relationship with the enterprise networks is. Colin Smyth mentioned the reductions in budgets in Scottish enterprises, which have been dramatic over the past decade. Many people in the business community who I speak to are not all clear what role Scottish enterprise is expected to fulfil, compared with where it was perhaps a decade ago. The relationship between that enterprise body and SNIB is unclear. The need for clarity is very clear both internally, but it is also signalled externally to those in business and those who might seek support from the bank. A number of members, Daniel Johnson among them, mentioned the issue of the availability of funds. £2 billion sounds like a chunky number, but it is over 10 years, so it is £200 million a year. Willie Watt, the bank chairman, said that those sums were insufficient. The hope is that additional sums will be levered in externally from the private sector. There is a key issue around the question of risk, because the Scottish National Investment Bank not only has a purpose if it is there to address market failure, but if it is there to support enterprises that cannot get finance from the private sector. Inevitably, that means that there might be a higher level of risk attach. It is fair to say, as the cabinet secretary has said, that some failures and investments will be inevitable. We hope not too many, of course, if we are dealing with public funds, but some will be inevitable. Michelle Thompson? Of addressing the matter of risk, we know that habitually there has often been a problem with the main kind of high street banks in terms of their attitude to risk. I think that we should reflect carefully on where the SNIB can indeed contribute. Perhaps I would welcome his comments on that. That is a fair point for Michelle Thompson. I was going to come on just to reference her comments that she made earlier about the relationship between SNIB and Scottish Enterprise and how the approach to risk between those two bodies might differ. Again, that is an issue that we would welcome some more clarity on as to what exactly would be the investments that Scottish Enterprise might deem appropriate to support and what SNIB might deem appropriate to support and how those might differ. Finally, can I address the issue of operational independence, which Kate Forbes raised at the start? I think that it needs to be very clear that we cannot have this bank directed by ministers. It will not be a success if that is the case. I have heard on this chamber over the past year and longer calls from different members about why the National Investment Bank must step in and support this particular enterprise that is failing, or that particular enterprise. That is not what this body is for. If that is the vision that people have for it, it will not be a success. I think that we need to be very clear about that. Ministers have the right to set a strategic direction for the bank but not to seek to micromanage a direct particular investment. In conclusion, we wish the Scottish National Investment Bank well. Time will tell how successful it will be. It is early days to be celebrating its success but we might be able to do so in time. The one thing that is clear from the debate is, from all different sides, that greater clarity about the purpose would be welcome, not least to those external to hear to the business community so that they understand exactly what this is for and how they might be able to help them. That is a point well made in the amendment in the name of Liz Smith, which I am very pleased to support. I now call on Cabinet Secretary Kate Forbes to wind up for the Scottish Government around six minutes or so. A lot of comments that I will endeavour to reply to over the course of my remarks. I just wanted to go through members in order, because a number of good points were made. Liz Smith started by talking about the important need for performance metrics that can be analysed and scrutinised by Parliament and by ministers alike. That is a very important point. Obviously, in each of the Parliament's audited accounts, they set out the balanced scorecard. What is unique about the bank is that, yes, it has to deliver returns, and we are open and honest about that. We expect the bank to deliver returns on a commercial basis, but the bank also has a commitment to deliver on social and environmental outcomes. The accounts were laid in Parliament in September, and they lay out the balanced scorecard already. There could be a requirement to develop more KPIs, but Murdo Fraser made an important point. As much as I am keen to celebrate the efforts of the independent bank here—not ministers claiming credit, but recognising the work and labour of the bank's team—it is as important as it is to reflect on that, the returns will be seen over the next few years. We are expecting returns to be delivered over the long term—perhaps on a longer term basis than any of our careers here. I think that that is to all part of the ambition of the bank. Performance KPIs—I think that we need to be careful. Yes, we need to ensure that the bank is delivering on its objectives, but analysing the performance too quickly is also a problem if politicians are looking to claim credit. Daniel Johnson made a number of points. I would respectfully suggest that perhaps Labour's amendment and Labour's comments are significantly at odds with what I hear from external stakeholders and certainly what the bank hears. I am not sure that Labour fully understands either the purpose or the operational independence of the bank in those comments, but Daniel Johnson is free to criticise Scottish Governments for the wider context. It is right that the bank sits within a wider policy framework. The bank is not about helping businesses to weather the storms. The bank is about making strategic investments in businesses that deliver a commercial return. Daniel Johnson? I would be grateful if the cabinet secretary could explain a little bit, because I explicitly in the amendment are addressing the wider context. Forgive me, but I am feeling to understand what bit I do not understand, because I was not commenting on the detail of the investments. She might be precisely the point here that the bank is adding value to the landscape. I would like to move on, because there are a number of remarks. Michelle Thompson talked about the need to be ambitious, and I think that we need to be ambitious. Having heard Willie Watt's comments—he was sitting next to me when he made the comments that have been misquoted a number of times tonight—he specifically said that £2 billion was humble about the amount of public funding that was going into the bank. £2 billion is a significant amount of money, but he also said that the ambition requires us to leverage in as much private finance as possible. Over the past two weeks, we have heard extensively about the amount of private finance. GFans has secured $130 trillion of private finance that needs to find a home in investments that can deliver not only commercial returns, but also ensure that we are meeting the global net zero requirements. I want to make sure that we secure as much of that funding in Scotland as possible, and I think that the bank can help to do that. They are already working with the private sector. Jamie Halcro Johnston made quite a good point, I thought, about a decentralised approach. Just yesterday, I opened one of the 12 centres associated with the National Manufacturing Institute for Scotland. One of those centres was in Fort William, part of £75 million. That decentralised approach in supporting businesses to innovate and to ensure that they have access to support on a local basis. Richard Leonard made one comment that I agreed with. That was the fact that we cannot lead to a result where risk is socialised and reward is privatised. That is absolutely spot on. The bank has a duty to make sure that we are not just making investments, but that we are making investments that deliver returns that can be then reinvested and that the bank becomes operationally self-sufficient. The other element that I will leave for now in terms of Richard Leonard's other comments, but I was pleased to say that there was one comment that I agreed with. Douglas Somerson talked about the need to be prudent, realistic about our finances, which is true, but there has to be an element of risk associated with that. The whole point is that the bank should not be replacing private sector investment. The bank should be adding value and perhaps de-risking investment. If an organisation or business can secure private sector investment, the bank should be looking for ways that it can add value elsewhere. The bank is making progress on becoming FCA accredited. The debate is about reflecting the fact that, in its first year as a start-up, the bank has grown in terms of its operational capacity. The bank has made £120 million worth of fantastic investments in meeting the objectives and is progressing with things such as FCA accreditation to be able to expand and also to crowd in and perhaps borrow on the basis of its own balance sheet. I am out of time, but I think that there are a number of comments that are worthy of further discussion. I hope that we can do that on a cross-party basis. To end where Murdo Fraser ended, this is not about the Government stepping in to micromanage the bank. The bank is operationally independent, and I think that we on those benches need to have a mature discussion about what value the bank is adding and also a more mature discussion about risk, because risk is integral to what the bank is seeking to do. That concludes the debate on celebrating the first anniversary of the Scottish National Investment Bank. It is now time to move on to the next item of business.