A contender for the hollowest of arguments coming out of Holyrood, possibly not just in this current term but in the Parliament’s history, must surely be the SNP’s calls for the UK to locate its Green Investment Bank in Edinburgh. Marco Biagi, MSP for Edinburgh Central, has reiterated those calls over the weekend.
What makes the argument particularly empty is the seeming unwillingness on the part of the SNP to directly address the elephant in the room about this decision, the fact that Scotland may well not be a part of the UK in a few years time.
I enjoyed a bit of Twitter back and forth on the matter on Saturday evening with Marco as follows:
@jeffbres Post indy it should be an IGO. rUK needs Scottish green energy exports for own targets. Edinburgh natural place to base bank.
— Marco Biagi (@MarcoBiagiMSP) February 4, 2012
@jeffbres Just saying status makes sense. Also, being near the ‘other parties involved in deals’ is actually one of the location criteria.
— Marco Biagi (@MarcoBiagiMSP) February 5, 2012
Stepping back for a moment to consider what this Green Investment’s Bank’s purpose is, we have the following statement from the main Government site on the institution:
The UK is to set up the world’s first investment bank solely dedicated to greening the economy.
The initiative is part of the Government’s commitment to setting the UK firmly on course towards a green and growing economy, while also delivering long-term sustainable growth.
This transition to a green economy presents significant growth opportunities for UK-based businesses, both at home and abroad.
So it’s pretty clear that this is a UK bank then and not an international or EU body.
Timelines:
The Green Investment Bank project will evolve over three phases:
UK Green Investments – From 2012 until state aid approval for GIB is granted, BIS’s UK Green Investments project will make direct investments in green infrastructure projects
Establishment – GIB will be established as a as a stand-alone institution following state-aid approval. It is expected that state aid approval will be granted in spring 2013.
Full borrowing GIB – From April 2015, the GIB will be given full powers to borrow, subject to public sector net debt falling as a percentage of GDP and further state aid approval being granted.
So investments/establishment and full borrowing will straddle the date of the independence referendum and there is no way of knowing, at the time when the bank is getting up and running, whether Scotland will be a part of the UK or not by the time the Green Investment Bank gets going. Who in their right mind would start to build such a bank north of the border?
Marco’s argument seems to be that the Prime Minister of rUK should hire foreign Scottish bankers to run an rUK bank, just because a significant amount of local green energy potential happens to be in Scotland. By this same logic, Cairn Energy shouldn’t be based on Lothian Road in Edinburgh but should be hiring Indian and Greenland accountants to run its finances and head office operations outside of Scotland.
It is at best fanciful and at worst hypocritical to argue for a UK institution to sit within Scotland while simultaneously arguing for Scotland to leave the United Kingdom and be a separate country.
Granted, as pointed out on Twitter above, it is possible for the Green Investment Bank to be adapted into an IGO if Scottish independence was to go ahead but that is such an awkward argument to make against the backdrop of the coming referendum that it surely won’t carry much, if any, water. ‘Say no to UK’s nuclear weapons (but Yes to their Green Bank)’ does not a catchy slogan make.
When this approach is compared and contrasted with the Scottish Lib Dem argument that Scotland is stronger within the UK and that this Green Investment Bank should be in Edinburgh, with its £3bn+ of investment, it is clear that there is a distinct lack of cohesion. It is also, incidentally, a shame that party differences and looming elections seem to be preventing the SNP and Lib Dems from working together on this one.
Marco’s been sent out to bat on this one and he’s doing so manfully despite a very sticky wicket indeed. Fair play to him but I’m afraid I am not buying this approach from the SNP at all and far from it being a case of standing up for Scotland, it strikes me as being a quick way of undermining one’s argument in favour of independence and appearing really quite dishearteningly disingenuous in the process.
I guess disingenuous trumps irrelevant when it comes to fighting to get involved in such a key UK decision that affects the important Scottish areas of environment, banking and employment.
Scottish independence and a UK Green Investment Bank based in Edinburgh are an either/or situation that may even end up proving to be neither/nor. If the SNP was serious about having this bank in Scotland, it would be holding its referendum sooner rather than later.
#1 by Angus McLellan on February 5, 2012 - 1:43 am
What’s to argue about? So long as Scotland remains in the Union the SNP should be working to get the best possible deal for Scots, as should all parliamentarians representing Scottish constituencies. That’s what their electorate expect them to do. And if it did come to Edinburgh the shiny new building could always be reused for something else in the future.
#2 by Jeff on February 5, 2012 - 1:47 am
The UK is going to start up a UK Green Investment Bank in the next few years, why would they choose to have it in Scotland when Scotland may well be an independent country even before this Green Bank is fully up and running? Edinburgh may well be the best place for this bank if the UK is going to go on and on, but the SNP can’t realistically argue for it to be in Scotland while choosing to ignore the elephant in the room that is the referendum.
You are of course correct that constituency MSPs should argue in the interests of their constituency as best they can but (1) Marco is on a hiding to nothing here and (2) it is the SNP as a party that is calling for this, not just one MSP.
#3 by Indy on February 5, 2012 - 10:31 am
Well let’s think through what happens if the UK Green Investment Bank is not located in Edinburgh and Scotland becomes independent. The Scottish Government would then set up its own Green Investment Bank in Edinburgh which would effectively then be in competition with the UK Investment Bank. But if we are looking at investment in renewable energy Scotland is where the resource is – if I remember correctly 25 per cent of Europe’s wind resource, 25 per cent of Europe’s tidal power and 10 per cent of Europe’s wave resource. And of course that matters. Because Scotland is also where the real commitment, expertise and political drive is as well. Just look at the difference between the UK target for achieving 15 per cent of energy from renewables by 2020. The equivalent target in Scotland is 100 per cent – we already, at this point in time, produce 40 per cent of the UK’s total renewable energy. And there are going to be lots of major projects coming online quite soon.
Scotland is also where the investment already is – the UK govt is bigging up the potential of the UK Green Investment Bank to secure £3billion+ of investment. You know the total value of renewables investment already proposed in Scotland is £46 billion? The Scottish Government helped secure something like £750 million of investment in the last year alone. Locating the UK Investment Bank here would be a good step to ensure that all the projects in the pipeline come to fruition and would ensure businesses in rUK could benefit from it.
And of course Scotland has the most supportive political environment. Ruling out nuclear means we have put all our future eggs in the renewable basket. (I suppose technically a future Scottish Labour or Tory govt could reverse that decision but it would be insane from an economic point of view as well as an environmental one). Because it’s not as if we have to stop after achieving the 100 per cent target. We can go on and generate more – much more – for export and that is exactly what the plan is. So where is the investment going to go? Is it going to go to Scotland where we are mad keen on industrial scale renewables and whatever government was in power would be gagging to develop the industry to its full potential – or to England where it’s just one strand in their energy policy and there is no real dynamism for developing it further?
So you could have that scenario of competing for investment and see how it worked out or the two countries could co-operate given that, as I said, we are going to continue to have an integrated energy market. That way the rUK can continue to benefit from Scotland’s green energy potential as well as Scotland continuing to benefit from its relationship with the rUK. It is a win-win in my view. Of course I am just looking at investment in industrial scale renewables here, I dare say the Green Investment Bank will also fund many other projects including small scale renewables and so you would need to have separate institutions there but I do think it would be crazy to have two different investment banks in the one island competing against each other for investment in the renewable industry when England could, to a certain extent, just piggyback on what is already happening here.
Of course there is a certain degree of awkwardness discussing this when we do not know at this point in time if Scotland is going to become independent. But irrespective of that we should be looking to work together surely.
#4 by Jeff on February 5, 2012 - 2:01 pm
Why not just have it in Berwick then? It’s only a few miles down the road from Edinburgh and, to all intents and purposes, just as close to the Green energy hotspots. I’m sure plenty of Edinburgh bankers would like to move home and family down to the Borders and/or Northumberland.
Also, crucially, David Cameron gets to ensure that he is covered politically by not losing a UK institution (and jobs) to a foreign country.
#5 by Craig Gallagher on February 5, 2012 - 5:40 pm
That may well be the UK government’s eventual policy, or at least intent, but it’s a hopelessly crass and cynical one. Whatever the merits or otherwise of independence, on the matter of energy Europe is heavily integrated already. The UK National Grid shares power with France, the Netherlands and the Republic of Ireland, rather a lot of it generated in French nuclear power plants. It’s hardly a stretch to imagine that Scotland can continue to be a part of that arrangement, but supplying power through renewables rather than nuclear.
It’s also worth remembering that the integration of energy policy was the reason the European Union began in the first place, through Franco-German community use of coal and steel resources. The principle of cross-borders energy generation is long established and won’t be suddenly cut off by a severing of Scottish power cables at Hadrian’s Wall post 2014. On this, co-operation really is the norm and unless Cameron needed to make a statement about job creation (would he really want to do so via a government body though?) it smacks only of petty nationalism to refuse to consider Scottish sites for a pan-British Green Energy Bank.
#6 by Indy on February 5, 2012 - 7:50 pm
Lol – I am quite sure they would not! Nothing against Berwick.
#7 by Craig Gallagher on February 5, 2012 - 3:17 am
So Jeff, by logical extension your argument is that the SNP’s desire to hold an independence referendum in 2014 is a cast-iron excuse for the Westminster government to withhold all spending, projects or grants that may have been, or feasibly could be, earmarked for Scotland in the interim period?
I get that you’re attacking the SNP position on this, but I have to agree with Angus, it’s not hypocritical, nor is it unrealistic. The SNP may very well believe independence is coming, but it’s hardly a guarantee, and if they lose the referendum how would it look if they had simply avoided calling for greater investment in Scotland, particularly in one of our leading industries, for the previous two years? There are lots of non-independence reasons for having the UK Investment Bank in Edinburgh, and at the moment no disqualifying characteristics of the city’s bid save the possible better qualifications of another town or city.
And the comparison with nuclear weapons is tawdry. Are you are using the line-in-the-sand approach the SNP are taking on nukes to suggest they would be so fundamentally uncooperative on something as progressive as a Green Energy Bank? Au contraire, I think the SNP would be falling over themselves to co-operate with an rUK government on this one. Stop imagining that independence is going to be some huge institutional dividing line and recognise that there are going to be some compromises along the way. This could very well be one of the more pleasing and erudite ones available.
#8 by Stuart Winton on February 5, 2012 - 6:18 am
Indeed, Jeff, and Dundee City Council’s SNP leader Ken Guild made the same argument vis-a-vis Dundee in last Monday’s Courier (not online). (Although it was consistent with Alex Salmond’s claim a day earlier that an independent Scotland would still be part of the UK, or whatever!!)
Of course, the SNP know full well that Westminster simply won’t entertain such a scenario until after the referendum at the very earliest, so presumably it’s all a bit of the usual disengenuous posturing which they can cry foul about because they know what the response will be.
But, hey, if the polls are to believed that approach seems to be working, so what’s not to like ;0)
#9 by Indy on February 5, 2012 - 8:33 am
I don’t really see why it shouldn’t be located in Scotland ppst-independence anyway. We’re still going to have an integrated energy market aren’t we? It’s not like an independent Scotland is going to stop exporting electricity to England is it? And in spite of all the anti-renewable energy propaganda the dact is that Scotland will end up producing far more renewable energy than we can use. Where’s it going to go? A lot of it will go down south – helping them, as Marco points out, to meet their own green energy targets – and to the continent. So everyone wins.
#10 by John Ruddy on February 7, 2012 - 4:55 pm
Are we to have an integrated energy market? I thought independence was the only way we could solve fuel poverty in our energy-rich nation?
#11 by dcomerf on February 5, 2012 - 11:34 am
The post independence position is still that this could be a UK (United Kingdoms) institution. It has public funding that acts as seed funding to attract private funding. Presumably the putative future independent Scottish government would contribute to this funding. I don’t see the issue (other than a handy political tool with which to make anti-independence points).
The whole pro-independence approach is to build internationalist institutions which have a focus on Scotland, {England, Wales, Northern Ireland}, Republic of Ireland, Scandanavia, Rest of Europe, Rest of World (roughly in that order), rather than take a London-centric view of how policy should proceed. The GIB is very much in keeping with this.
#12 by Doug Daniel on February 5, 2012 - 1:29 pm
I agree with Craig and Angus that, until and unless Scotland becomes an independent country, the Scottish Government has not only the right, but the responsibility, to be arguing for every penny of investment into Scotland it can get. The alternative would be to say “it’s fine, ignore investment in Scotland because we’re probably going to be independent soon anyway”, which would not only be extremely presumptuous, but also the exact opposite of what a government is supposed to be doing – namely arguing its country’s case at all times.
It is not an adequate argument for Westminster to say “well you guys might be independent in 2014 anyway, so we’ll ignore you”, because whether they or I like it or not, they are still in charge of Scotland as the UK government, and to use this line would be a tacit admission that they are primarily the English government. A devolved English assembly could argue this line, but not the UK government. To do so would be almost like admitting the referendum will return a yes vote, and if any political brinkmanship is to be used, surely it should be in the form of “look what the union can do for you, Edinburgh!” rather than “oh well, if you’re not going to play by our rules, we’re taking our ball back home.”
The fact the two timelines cross is unfortunate, but it’s absurd to suggest the referendum should be moved sooner as a result. For one thing, independence is about far more than where one bank is going to be situated, so we can’t hurry the debate along just because the UK government have chosen this timeline for GIB. Secondly, if the problem can be solved by shifting something, why should it be the referendum, and not the GIB? It’s not like green investment won’t begin until the doors of the bank are opened.
I can see why you think there’s an element of doublethink in proceedings, but to me it’s merely another example of why we need independence. Here’s an easy solution though – devolve it. Give each parliament/assembly a stake in the GIB to use as they see fit. Then when Scotland becomes independent (oops, “if” we become independent), then nothing is lost.
(Obviously when I say “easy” I mean “made up right this second and therefore given no thought of the actual consequences or feasibility”.)
#13 by Chris on February 5, 2012 - 2:25 pm
I think if there was any real risk of independence then the UK government would be foolish to locate large UK wide investments in Scotland.
The SNP would also be foolish as the people who would get these jobs would lose them on indepedence when the bank needed to be relocated. The promise of transferring them to the Scottish DVLA or Revenue and Customs Department or Scottish Waterways Board or SBC or Scottish DSS, etc. may not tempt them.
#14 by Angus McLellan on February 5, 2012 - 7:24 pm
I’m unconvinced by the the idea that jobs would be lost, in the short term anyway. Untying the United Kingdom will take a while, even if everyone jumps to it right away. And that’s not a given. The Daily Wail readers who think Westminster should take its toys home immediately would be disappointed in the event of a Yes vote. It would take a while. The folks who want Trident gone in the blink of an eye would likely be unhappy too. I could go on. We should never forget Hofstadter’s Law: “It always takes longer than you expect, even when you take into account Hofstadter’s Law.”
If the bank eventually moved, and again that’s not a given, some people might choose to move with it. That would be their choice. They would, 99% of them, have dual nationality, so long as the Daily Wail readers have their way. But post-independence Edinburgh would be likely to see a boom in jobs for the sort of people who might work in government-owned bank. From think tanks to ministries to multinationals – and there would be more of those if Scotland were an even foreigner country to the rUK and London – and beyond there would be lots of new offices springing up. (So, we can add property developers and estate agents to the list of immediate beneficiaries from independence. Lawyers were already on the list.)
#15 by Indy on February 6, 2012 - 8:26 am
If the UK Green Investment Bank was located in Edinburgh the jobs wouldn’t be lost because even if the UK Govt said we don’t want to do this any more the Scottish Government would just take it over. If the UK is concerned about jobs then we could just swap them for something like the DVLA. There is no reason that I can see why the Scottish Government shouldn’t just pay the DVLA to continue managing driving licenses etc for Scotland while the UK Government paid the Scottish Government to manage investment in renewables on a UK-wide basis. As I said, Scotland is where the real drive for renewables is centred so it would be quite logical – unless you are going to take the position that a post-independent Scotland and England are not going to be talking to each other!
#16 by Alexander Belic on February 5, 2012 - 4:00 pm
I’d agree with those who have said that the job of the Scottish governement (and perhaps even the Scottish opposition?) is to advance Scottish interests and right up until the Northgate starts issuing Scottish passports that includes standing up for Scottish interests within the Union.
You wouldn’t expect Scots Ministers to remain silent on changes to the UK Social Security network that would adversely affect their constituents so why should they not speak in support of UK investment in Scotland.
With the shoe on the other foot, it should be the Westminster government’s duty to promote British interests, they shouldn’t be cutting their nose off to spite their face by settling for the second best (assuming the second best site isn’t also in Scotland) site for the new GIB.
If the Tories now decide to site this bank in Leeds instead of Leith, wouldn’t that also come across as hypocritical now? The argument’s being made by Westminster that there is no stomach for Independence in majority Scotland surely ring hollow if they’ve already started planning life without us.
#17 by Barbarian on February 5, 2012 - 5:20 pm
Good article, and highlights a bit of hypocrisy from the SNP.
It seems we are back to the “Scotland wants this and it wants it now, oh and a large one as well”. It’s a stupid argument that will fall flat on it’s face. It reminds me of Alex Neil’s demand that the HSL goes to Scotland now. Why on earth should Westminster fund projects if Scotland is going to be independent?
But it seems they are more upset that Alex didnae get to see the rugby!
#18 by Barbarian on February 5, 2012 - 5:22 pm
Oops, forgot a bit.
Don’t be surprised if Westminster DOES locate the bank in Edinburgh, then in a couple of years threaten to remove it to England if Scotland becomes independent. The NE of England is screaming for jobs. And it won’t be the only organisation affected, trust me.
#19 by gavin on February 5, 2012 - 9:27 pm
I would bet that the Green Bank will go to somewhere like Newcastle if London doesnt grab it. However, the Unionists are going to be in a poor referendum position if Scotland is to get nothing back from its tax contribution because of English political considerations. We already get a poor deal on defence spending and the BBC etc. People may not have noticed, but in Europe, high speed rail doesnt stop fifty or a hundred miles from borders but manages to somehow cross from one country to another.
#20 by FormerChampagneSocialist on February 6, 2012 - 12:04 am
Salmond quite right to lobby for GIB. We are still part of the UK. He’d be negligent if he didn’t.
However, I am hearing lots of whispers that the GIB will be located in Bristol.
#21 by Jeff on February 6, 2012 - 10:23 am
Oh, I agree that if you don’t ask then you don’t get and the SNP is well within its rights to lobby for the GIB. I still think they look a bit daft and duplicitous for doing so though if they don’t even mention the possibility of independence at the same time.
Not at all surprised if it went somewhere like Bristol though. (A very nice city).
#22 by Aidan on February 6, 2012 - 10:48 am
Yet another reason why we should have the referendum now.
#23 by Hen Broon on February 6, 2012 - 12:50 pm
HEADQUARTERS LONDON.
HSBC Holdings plc was founded in London in 1991 by The Hongkong and Shanghai Banking Corporation to act as a new group holding company and to enable the acquisition of UK-based Midland Bank.The origins of the bank lie in Hong Kong and Shanghai, where branches were first opened in 1865. Today, HSBC remains the largest bank in Hong Kong, and recent expansion in mainland China, where it is now the largest international bank, has returned it to that part of its roots.
So it’s good for London but not Edinburgh. How very typical.
#24 by Barbarian on February 6, 2012 - 7:53 pm
North East of England – trust me.
#25 by Mark Ruskell on February 9, 2012 - 10:08 am
There are 32 bids now in for the GIB across the UK including multiple bids in the SW of England. Every candidate city or town has had its very own Marco Biagi cheerleading in local rags over the last two weeks. Edinburgh on paper is the front runner, but politics is bound to get in the way when Vince Cable finally announces the decision.
It’s not unthinkable that the GIB is located in Edinburgh post-independence as long as there remains a UK electricity market and if that mechanism has a role in funding. It is unthinkable that a future electricity market would be any smaller than the current one and in the future may include Ireland and other countries anyway. I put down some thoughts on this over on Bella at the weekend http://bellacaledonia.org.uk/2012/02/03/scottish-power/
On balance though there may be enough policy logic to back up the politics and take the bank to NE England.