State-owned bank should be allowed to invest in arms companies

A former SNP MP has called for Scotland’s National Investment Bank to be allowed to invest in arms companies, saying it would help demonstrate Scotland is part of “the coalition of the willing”.

Speaking on the Holyrood Sources podcast, Stewart McDonald said showing Scotland was a “domestic partner” in the group of nations ready to defend Ukraine would send a “good signal” domestically and abroad.

He also said it would put help put any future independence referendum in “good stead”.

The state-owned Scottish National Investment Bank (SNIB) was set up in 2020 to invest in businesses or projects that support the development of Scotland’s economy.

Under the bank’s ethical policy, investments in “organisations which are primarily engaged in the manufacture of munitions or weapons” are prohibited.

However, the former Glasgow South MP called for that to change.

“The SNIB has a ban on investing in companies that produce munitions. That has to go,” he said.

“My understanding is that doesn’t even take legislation. It would just take a simple vote of the board.

“But I don’t know if ministers could direct them, but they should. That should go.

“Our national institutions should support our national security.”

Mr McDonald, who was previously his party’s defence spokesperson, also called for a Scottish defence industrial skills strategy, to give the industry the resources and skills it needs to work at “peak strength”.

“I think the First Minister, along with the Secretary of State for Scotland, along with the defence procurement minister, should get together in Bute House with the members of the Scottish defence sector,” he explained.

“And he should just say, ‘What do you need? I want to write a Scottish defence industrial skills strategy that’s all about putting in resource, policy resource and financial resource into our colleges and universities, so that you can recruit enough people and the right people who’ve got the right training, so that Scotland’s industry is operating at peak strength, as we are in this period of rearmament’.”

A Scottish Government spokesperson said: “All investments from the SNIB must deliver both commercial returns and support at least one of the bank’s missions: addressing the climate crisis, transforming communities, or scaling up innovation and technology.

“In line with policy, the bank does not invest in organisations that are primarily engaged in the manufacture of munitions or weapons.”