Investing for the future: Why we need a British Investment Bank

Article

This report presents a detailed blueprint for what a British Investment Bank should look like in order to be fully effective in filling a gap in the UK banking system.

The idea of such a Bank has been around for a number of years, but only in the last five has it achieved any prominence in public debate. In September the business secretary, Vince Cable, announced tentative plans for a British Investment Bank.

IPPR's report examines the models provided for national investment banks by international case studies and sets out the main lessons that emerge.

It says that a British Investment Bank should have the following features:

  • Operation: The Bank should be 100 per cent state-owned but there must be a clear dividing line between the role of government and the activities of bankers in making lending decisions
  • Scope: A fully fledged British Investment Bank should be able to invest in infrastructure projects and to provide long-term financing for small and medium-sized businesses across the whole economy
  • Size: The government should inject an initial £40 billion of capital over four years into the Bank, and the Bank should be allowed to raise funds on capital markets up to a leverage ratio of 2.5:1 (that is, up to an initial £100 billion).

Related items

  1. Doctor with patient for consultation, medical advice or procedure at clinic

    Taken to heart: Inequalities in heart disease in Scotland

    More than 7.6 million people across the UK live with cardiovascular disease (CVD), around twice as many as live with Alzheimer’s disease and cancer combined. 
  2. A beautiful sunset in the Scottish highlands with renewable energy wind turbines far into the horizon

    Skills passports: An essential part of a fair transition

    This month, government will publish its Clean Energy Workforce Strategy. This plan covers two aims. First, filling the growing demand for skills in clean energy industries is essential to keep on track to reach the government’s clean power…
  3. The Bank of England is watched over by a statue of the Duke of Wellington seated on his horse

    Fixing the leak: How to end the £22 billion annual taxpayer losses at the Bank of England

    The Bank of England increased its interest rates over recent years, aimed at reducing inflation. But this has also had an unintended effect on the Bank of England’s massive government bond buying – ‘quantitative easing’ – programme.