WE began last week with a discussion about some of the priorities Scotland will need to consider as an independent country to achieve self-sufficiency in key economic sectors, such as food and energy, and how self-sufficiency is critical to achieving monetary sovereignty and maintaining the value of our currency. By allocating capital to investment in strategically important economic sectors we will secure the future viability and trust in our currency.

We concluded the article with reference to the ongoing crisis at the McVitie’s factory in Tollcross, Glasgow, which faces closure with the loss of nearly 500 jobs as a result of decisions being made by the Turkish company which owns it.

This factory suffered 200 job losses back in 2014 and at the time the local MSP John Mason had this to say: “Ownership is also an issue here. Recently, control of United Biscuits has moved to Yildiz Holding of Turkey; but control left Scotland long ago. Once again Scottish jobs suffer when ownership is elsewhere. In the longer term we need to look at how ownership of companies can be kept more locally. That is an advantage for local jobs, the local economy, and beyond.”

McVitie’s is a classic example of how we need to get a grip of ownership issues in the strategically important food production sector. In this regard the availability of capital to facilitate the transfer of ownership of viable businesses such as McVitie’s Tollcross is crucial to bringing back such productive capacity into local ownership.

The fact is that such capital is available NOW and we do not have to wait until after independence to take action. When opportunities arise, as in this case, Scotland needs to act to bring productive capacity in the food and other strategic industries back into domestic ownership so that we are in the best possible position when we get to the starting line at independence.

While the Scottish Government has an important role to play, it is not necessary for the capital required to be sourced from central government budgets.

In our article in The National on May 12 (“How we can make our pension funds benefit an independent Scotland”) we argued that the Scottish Local Government Pension Scheme (LGPS) funds have a vital role to play in providing capital for investment in productive businesses. This proposal is of direct relevance in the McVitie’s situation. LGPS funds currently have assets valued in the region of £45 billion.

Assuming most of the workforce lives in the Glasgow City Council area, most of the workers will be paying their council tax to Glasgow City Council. Part of that tax is used to pay the pension contributions by the council and its employees into Strathclyde Pension Fund (SPF). Even if some McVitie’s workers live in other adjacent council areas, those councils will be paying pension contributions into the SPF too.

The SPF currently has assets valued in the region of £21bn. Given that McVitie’s Tollcross is a viable and profitable business then SPF could benefit its pension members and the McVitie’s workforce by investing equity capital into the business. This would preserve a viable food producer, save the jobs of the workers there as well as earn a healthy return for the SPF. Such an investment will also achieve the return of an important business to domestic ownership.

Such an equity investment by the SPF could be arranged via a partnership between the SPF and a management buyout and/or workers’ co-operative. In the opinion of the Scottish Banking & Finance Group this could potentially set a precedent for the future as a means to ensure that viable businesses in key sectors of the economy can either be brought back into domestic ownership or brought into existence in the first place as start-ups.

The role of the Scottish Government and its agencies in this process is to facilitate and nurture this adaptation of pension fund capital allocation and also to provide some level of guarantee to protect the pension fund investment from the risk of loss.

Such a risk should be low if the McVitie’s Tollcross business has a viable and profitable business plan, and there is no reason to think that is not the case, although the new business would need to develop new products and brands as the existing brand names are owned by Pladis.

If businesses are producing goods/services which meet people’s needs (ie they have use value), they will produce healthy revenues and healthy profits. This is a model for partnership between financial institutions and productive enterprises and is the basis for the kind of banking and financial system reform the SBFG has been advocating in our National articles.