Banking plan will kick start Labour's 'Green Industrial Revolution', Shadow Chancellor John McDonnell claims
Labour yesterday announced plans to deliver a "radical shake up" of the UK banking system to kick start a "Green Industrial Revolution" in the UK.
Shadow Chancellor John McDonnell said Labour's plans for a National Investment Bank - first outlined in the 2017 manifesto - would spur development of green manufacturing and businesses across the UK.
But he stopped short of a promise to revive the Green Investment Bank, established by the coalition government in 2012 with the express remit of investing in green industries, but which was sold to Macquarie in August 2017.
Instead McDonnell said Labour would build a "new public banking ecosystem" by setting up a new Post Bank tied to the Post Office, keeping RBS in public ownership and setting up a National investment Bank to support small businesses and green infrastructure upgrades across the country.
"Finance is the central nervous system of the economy," McDonnell said. "It directs investment, deciding which businesses and projects get off the ground and which fail. For too long, this vital part of our economy has been solely in the hands of the big banks and the speculators. As the financial crisis, scandal after scandal and the chronic lack of investment for our SMEs, manufacturing and in our infrastructure show, this model has failed."
"Labour will build a new, public banking ecosystem to promote vital national priorities and give our SMEs, start ups and co-ops the best chance of success," he added.
The National Investment Bank will support a network of regional development banks which will lend to SMEs and start-ups across the country, as well as support infrastructure upgrades, McDonnell said.
The Shadow Chancellor went further than the 2017 manifesto in linking the role of the National Investment Bank to the growth of the green economy, insisting the bank would have an explicit focus on green innovation to help the UK develop "world-leading industries of the future".
This focus will support the party's plans for a Green Industrial Revolution, the party stressed, and ensure the benefits of low-carbon growth is distributed equally across society.
The National Infrastructure Commission has previously stressed the need for the UK to focus its infrastructure spending on low-carbon industries, including expanding the country's EV charging network and renewable power capacity.