SCOTLAND’S new state-owned investment vehicle will lose public support if it pays its staff as if they were “private sector bankers”, union leaders have warned.
In evidence to MSPs, the Scottish Trade Unions Congress says senior staff should be paid in the same way as other civil servants.
However business leaders said the £2bn Scottish National Investment Bank (SNIB) would need to pay in line with “labour market realities” to get the best recruits.
The issue comes before Holyrood’s economy committee today.
It is taking evidence on the Bill to create the SNIB, which is due to start lending £200m a year for 10 years to the private sector from 2020.
The plan has been led by former Tesco CEO Benny Higgins.
Funded by the SNP Government, ministers want it to be become a “cornerstone of Scotland’s economy” by focusing on so-called patient finance, lending to firms over 10 to 15 years, to help the shift towards a low-carbon, hi-tech country.
The STUC welcomed the SNIB, but also flagged the remuneration of the bank’s directors and staff, which will be determined by the directors themselves, subject to any direction from ministers.
The Government has admitted the bank’s pay policy may “deviate in some areas from public sector pay policy”, which restricts rises and bonuses, to attract the right staff.
Although it also said this deviation “must be done within limits and in a way, that supports the development of a positive, inclusive and diverse culture for the Bank”.
The STUC said: “It is crucial that the remuneration policies of the Bank retain public support.
“Given the Scottish financial sector’s track record of failure, it is simply not credible to pay senior staff as private sector bankers instead of public servants.
“If there are issues around recruitment and retention for the SNIB, then this is an issue for public sector pay policy as a whole rather than for excluding [the bank] from public sector pay policy.”
But in its evidence, the Scottish Council for Development and Industry urged “a judicious approach to remuneration which ultimately reflects labour market realities.
“Remuneration, particularly for senior leadership staff, should be closely linked to the performance of the Bank, macroeconomic impact delivered and rates of financial return achieved.”
The committee is due to hear in person from STUC assistant general secretary Helen Martin and SCDI policy director Matt Lancashire.
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