Written by Reporter -
The UK’s Green Investment Bank could be killed off if the Government goes ahead with plans to sell it, Green Party co-leader Caroline Lucas has said.
She warned the preferred bidder, Australian investment bank Macquerie, has a “very worrying and dubious track record” and is likely to asset strip the company and discard its green ideals.
Ms Lucas urged ministers to halt the planned sale of the bank, which supports offshore wind farms and other green projects.
Asking an urgent question in the Commons, she said: “Will the minister admit that this selling off could lead to the bank being fatally undermined as an enduring institution?
“Will he stop the killing off of the Green Investment Bank? Will he halt the sale process with immediate effect?”
Set up with #3.8 billion of Government money, the investment bank is the first in the world dedicated to “greening the economy”.
Ms Lucas told MPs: “This week we heard that the Green Investment Bank stands on the brink of not just being flogged off but of being broken up with its green purposes discarded.
“Founded in 2012, the GIB has been widely recognised as a true success story, kick-starting truly innovative low-carbon projects across the UK.
“And yet this preferred bidder, Macquarie, not only has a dismal and terrible environmental record, it also has an appalling track record of asset stripping.
“So why has the Government given preferred bidder status to this company?”
Recent changes to the bank’s corporate structure suggest there are plans “to hollow out the GIB”, she said.
As part of the plans to sell the bank, the Government has created a “special share” which legally enshrines its obligation to invest exclusively in green projects.
But Ms Lucas said the asset stripping raised questions over the effectiveness of this safeguard and its sale could result in the bank being “fatally undermined as an enduring institution”.
Energy Minister Nick Hurd said he could not comment on any of the bidders because the proposed sale is commercially sensitive.
But he insisted the bank is being privatised so it can “increase its green impact free from the constraints of Government ownership” and played down speculation that firms intend to kill it off.
He added: “Potential bidders are interested in GIB precisely because of its green specialism; we are asking potential investors to confirm their commitment to GIB’s green values and investment principles and how they propose to protect them, as part of their bids for the company.
“In addition, the Government has approved the creation of a special share, held by independent trustees to protect GIB’s green purposes in future.
“The sale is commercially sensitive, so I cannot comment on the identity of any bidders or the discussions taking place between the Government and potential bidders.”
Mr Hurd added: “It is precisely because we want the Green Investment Bank to be able to do more, unfettered from the constraints of the state, that we are seeking to put it into the private sector.”
But pressure is mounting on the Government over the sale.
The Environmental Audit Committee has sent a letter to Energy Secretary Greg Clark raising concerns about the proposed sale of the bank Macquarie.
The committee’s chairwoman, Mary Creagh, said: “The Green Investment Bank should continue to exist as a low-carbon investor or its sale should not proceed.
“Ministers have rushed to privatise it without consultation or proper consideration of the alternatives.
“Taxpayers do not want to see a repeat of the Royal Mail debacle where public assets were sold at bargain-basement prices, and they do not want to see a landmark British institution sold off to an asset-stripper.”
Mr Hurd faced cross-party calls in the Commons to delay the sale, from the likes of Tory Peter Aldous (Waveney) and the SNP’s energy and climate change spokesman, Callum McCaig.
Shadow business secretary Clive Lewis said: “Given the assessment of Macquarie and what we’ve seen of Macquarie, it has a history of asset-stripping.
“How exactly will the minister protect this valuable public institution from having its assets sold off?”
Mr Hurd also refused to rule out the bank investing in fracking once it moves into private hands.
When asked directly about this by Labour’s Jenny Chapman (Darlington), Mr Hurd said: “The Green Investment Bank will be required, under this process, to continue to respect the green purpose of the organisation, as set out in the articles of the association.
“Therefore, the degree to which investment proposals fit those criteria are a judgment to be made by management and the trustees we’ve set up to be independent guardians of this process.”