MPs’ warning on Green Bank
The Environmental Audit Committee has warned that the Green Investment Bank could lose out on billions of pounds of investment.
The Committee says that the government must allow the bank to borrow money to raise extra capital.
There are fears that the government will not allow the Green Bank to operate like an investment bank and merely be a fund.
The Committee warns that if this is the case, the money needed to meet climate change and renewable energy targets will not be raised.
Energy companies, NGOs and financial institutions giving evidence to the Committee estimated that between £200 billion and £1 trillion of private sector investment is needed over the next 10 to 20 years.
The government is concerned that allowing the Bank to operate as a fully-fledged investment bank will mean that the Office for National Statistics will classify the Bank as public sector. Its borrowing would appear on the government’s balance sheet, therefore undermining the deficit reduction strategy.
Environmental Audit Committee chair, Joan Walley MP, said: “If the Government is serious about being the ‘greenest ever’, the Chancellor must ensure the Green Investment Bank can do what it says on the tin and raise extra capital like a real bank.
“The UK desperately needs a game-changing injection of private sector investment if we are going to meet our climate change targets and move to a green economy.
“Setting up a Green Investment Bank without the power to borrow would be a bit like trying to buy a house without first getting a mortgage offer. George Osborne has got the deposit, but if he doesn’t allow the Bank to raise extra capital, the sums are going to fall far short of what is needed.”
The Committee are urging the government to hold talks with the ONS about maximising the Bank’s impact on investment levels while minimising its impact on the deficit.
It says the Bank should concentrate on environmental investment not traditional energy, such as nuclear power.
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