A FLAGSHIP Scottish national investment bank must not be dominated by “wealthy elites and city bankers”, campaigners have said.

Ministers say that the new bank will be ready by 2019 and provide £2 billion for Scots firms over the next decade.

Last night, the government was urged to refuse cash to firms that employ workers on insecure and low paid contracts.

While campaigners have broadly welcomed news of the investment bank, trade unionists added that it must promote ethical investment rather than “simply offering support to keep low-paid, low-wage employers” in business. There was also a call for a ban on funding for firms that refuse to recognise trade unions.

Scottish Trades Union Congress (STUC) general secretary Grahame Smith said:“The Scottish national investment bank has the potential to stimulate a step change in the economy, providing patient capital for public and private investment, something clearly lacking in our current, broken economic model.

“However, for this step-change to happen, the bank needs to have a clear mission and remit to support a low-carbon and more equal economy which provides fair work for all.

“Crucial to this will be ensuring the governance structures are sufficiently diverse, ensuring representation from underrepresented groups, workers and trade unions.

"The STUC will be pushing for a dedicated seat for a trade unionist on the board, in line with the Fair Work Framework.

“We cannot afford to leave the governance of the Scottish national investment bank to wealthy elites and city bankers.”

Smith said investment from the bank should be linked with a condition to ensure good working standards.

He added: “Receiving public investment from the Scottish national investment bank should provoke questions around what type of employers receive public money, what value they bring to the economy, and whether these jobs are transient or short term.

“Investment needs to be tied to the quality of employment on offer, fair work principles, and the procurement of materials and services sourced from local suppliers.

"This would drive inclusive growth and positive outcomes for the wider Scottish economy, rather than simply offering support to keep low-paid, low-wage employers in business.”

Danielle Graham, an STUC youth committee member, backed calls to withhold funding from employers that are hostile to unions.

Graham, who works in a call centre, added: "We don’t want jobs that are insecure, with employers that don’t recognise trade unions, and don’t allow us to negotiate our terms and conditions collectively."

Economy secretary Keith Brown has said the investment bank will be a "cornerstone of the economy" in Scotland.

Last night, a Scottish Government spokesman said: “We look forward to working with the STUC and other partners on its design as plans for the bank are progressed.”