It doesn't come from the 'money tree' but converting shares into government bonds. The government then borrows money against the assets i.e water companies, railways, energy companies. It is not included in government borrow but a separate entity which is guaranteed by the state. It is the same way our new stadium is financed/funded.
"Financial engineering
Let’s start with what public promotional banks actually are. Basically they’re a clever bit of financial engineering. They are owned by the state and borrow money just like the treasury does, but they are regarded as “off balance sheet” so the borrowing doesn’t show up in normal public borrowing figures. Their debt is counted as a “contingent liability” for the state, however – the explicit or implicit state guarantee means the state could be forced to cough up if the promotional bank goes bust. But this is usually regarded as an exceedingly low risk for the state because a promotional bank’s liabilities are matched by assets – all the outstanding loans for infrastructure projects, etc. – that are usually seen as pretty safe.
Basically, by having an off balance sheet promotional bank to focus on capital expenditure projects, you can have lower public borrowing figures yet still mobilise a lot of cheap finance. This is a good thing. But judging by the experience of other promotional banks, we should also be realistic about what a national investment bank could achieve; we need to be constructively critical.
A national investment bank would still be a bank
Promotional banks are not a magic wand for substituting normal government spending. They are banks that lend money and expect to get repaid – with interest. This means they are limited to financing investment projects where there is a future revenue stream. Multilateral versions like the World Bank (yes, that’s another one) lend to governments against future tax revenues, but a UK national investment bank lending back to the UK government would make little sense. That leaves privatised utilities and other companies as potential clients, and other banks, and some entities like universities and housing associations. But if you wanted the bank to finance building an NHS hospital, for instance, it would probably have to be via a private investor in a PFI-type scheme that had been promised a steady stream of public money for a long time in the future. That certainly makes little sense".
Labour have not said they would build hospitals etc. but take over the existing privatised companies that were once public. The other things will come out of tax increases they propose.
National investment banks: a radical proposal? | openDemocracy
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