The banking system played a part in driving forward the British industrial revolution. Loans were provided by banks to build infrastructure and finance new ventures. While these loans played an important part, it is worth noting that capital from wealthy investors also played a significant role.
Move forward over 200 years and we see a completely different model of investment by banks and the wealthy. Now there are far higher returns on investment through the financial markets. While during the industrial revolution investors may have seen a return of 5%, now they can see returns in many multiples of their original investment. This means that businesses wishing to establish themselves or grow tend to look for foreign investment or buyouts more often than not.
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The UK either needs to accept the present decline or change its economic model. There is nothing in our present model that will rebuild a decent standard of living or quality of life for the majority of people. The main parties offer nothing except broken promises and pure fantasy solutions.
Rise will create an investment bank. The Green Bank previously created by the coalition was not a real bank as in reality it was given funds by government to invest in green projects but had none of the powers vested in a licenced bank. For example it could only invest from the pot of money the government awarded it at start-up. Once it was set up and running, it became ripe for sale and consequently that is what happened.
We will ensure the Investment Bank has the full capability of other banks with the advantage that being publicly owned it can focus on providing services to communities rather than to the stock market.
The bank’s key roles are as follows:
- Providing Investment for large enterprises to ensure growth.
- Establish a golden share in businesses to protect from aggressive takeovers.
- Invest in environmental solutions.
- Invest in innovation.
- Invest in infrastructure where it aids growth of jobs but doesn’t negatively impact the environment.
- Ensuring UK businesses don’t need to seek foreign investment to grow.
- Investment in small to medium businesses.
- Proactively work with students to promote investment and entrepreneurial activities.
- Create training and templates to aid businesses.
- Work with businesses to help ensure their success.
- Provide mortgages and loans.
National Investment Bank
The National Investment Bank (NIB) is the overseer of the publicly owned banks. NIB will manage the bank funds and liabilities as well as planning the overall direction of the Regional Development Banks (RDBs) and Branches.
Some of the NIB key roles will be the following:
- Create assets, structure and culture to make the bank accessible to communities and entrepreneurs.
- Seek out investment opportunities within the UK.
- First port of call of investment for existing businesses.
- Mentor business start-ups and provide all necessary support structures, delivering through the RDBs.
- Work with and encourage different models of business ownership (co-ops, employee representation, SME etc).
- Invest in environmentally positive businesses:
- Building renewables industry.
- Build manufacturing of high quality products that don’t end up in landfill but rather can be repaired.
- Work with the RDBs to create repair workshops.
- Work with the Education Authority to create project-based learning to equip students to create and work in high-tech industries:
- Provide student training.
- Provide template to rollout to schools including how to tie practical work into all the educational subject areas.
- Provide consultancy on establishing workshops.
- Work with and support work of the RDBs.
Regional Development Banks
RDBs will target investment funds per region. Working with the NIB they will identify areas that require attention. As stated earlier, investment is not just about providing loans or grants to business, but also providing the infrastructure that ensures communities thrive. It is by working within communities that RDBs will identify investment needs. In some cases in may not be the role of the RDBs to provide the funding, but rather to work with the relevant departments to facilitate targeting investment. For example this could be the requirement for public transport to service a new venture. In this case RDBs with NIB would work with councils to identify requirements and identify the template to be followed to provide the best service.
Some of the key roles of the RDBs will be:
- Investment or loans for small to medium businesses.
- Investment in infrastructure to support small to medium businesses, such as building workshops and office facilities which will be at low rents.
- Equip workshops and offices to remove capital cost risks to start-ups.
- Understand markets and opportunities and proactively help individuals, communities and co-operatives build plans where they can create businesses and as in previous point create an environment to help ensure success.
- Mortgages, particularly for those wishing to purchase their rented property. Note: We do not oppose right-to-buy but will build enough social housing to ensure that high quality housing is always available for rent. We will not provide mortgages for buy-to-rent.
- Provide loans for home restoration at low interest rates. Note: We will not provide loans for restoration on second homes or buy-to-rent.
- Publicly owned insurance provision. This will allow us to provide affordable insurance, for example house and contents insurance.
Placed in post offices and shops the branches will serve retail customers with the following:
- Current accounts
- Saving accounts
- Loans for small businesses
- Insurance (Can be ordered and managed at branch, contract with relevant RDB)
- Business advice (this will include RDBs specialists visiting branches to help establish small and medium sized businesses
Branches will receive part of the interest on loans as well as receiving payment to run a branch.
You can find further information on the potential a NIB would offer in this interesting article – https://theconversation.com/ending-austerity-create-a-national-investment-bank-103559
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