Green Investment Bank

Caroline Lucas Excerpts

Wednesday 11th January 2017 Commons Chamber

[Caroline Lucas (Brighton, Pavilion) (Green)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the sale of the Green Investment Bank.

[The Minister for Climate Change and Industry (Mr Nick Hurd)]

The Government set out their plans for the sale of the Green Investment Bank in the document “Green Investment Bank: Sale of Shares” laid before Parliament on 3 March 2016. The Government intend to move the GIB into the private sector, so that it can increase its access to private capital and increase its green impact free from the constraints of Government ownership. Potential bidders are interested in the 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 have approved the creation of a special share, held by independent trustees, to protect GIB’s green purposes in future.

As I am sure the House will appreciate, 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. All parties have been required to sign confidentiality agreements that place strict restrictions on the disclosure of information. The restrictions apply both to bidders and the Government.

[Caroline Lucas]

I thank the Minister for his reply, but it gives very little reassurance, given that everybody knows who the preferred bidder is. The preferred bidder, Macquarie, has a very, very worrying and dubious track record. I am putting this question today with support from across the House.

This week, we heard that the Green Investment Bank stands on the brink not just of being flogged off but 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, yet the preferred bidder—Macquarie—not only has a dismal and terrible environmental record but an appalling track record of asset stripping. So why have the Government given preferred bidder status to this company? What assessment have the Government made of Macquarie’s record, given that in 2005 the board of the London stock exchange deemed Macquarie unfit to conduct a takeover?

Furthermore, research this week uncovered changes to the GIB’s corporate structure. Between 22 November and 1 December, 10 new companies were incorporated and registered to the GIB’s London offices. The changes suggest that Macquarie is planning to fundamentally hollow out the GIB. Why have the 10 new companies been set up? Will the Minister confirm whether the changes made at the end of last year were made at the behest of Macquarie? Why are the Government setting up a structure to invite in a property asset stripper? If the GIB has been restructured in such a way as to allow it to be stripped of its assets, how can the Government guarantee that the special share, supposedly introduced to protect the future of the GIB, will have the intended effect?

Is this not exactly the wrong time to be selling off the GIB, given that the Government have decided to embark on a new industrial strategy, which must, to be in accord with our own climate change commitments, have low-carbon projects at its core? Finally, 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?

[Mr Hurd]

As I think the hon. Lady knows, she has asked a stream of questions to which I cannot give direct answers. She will also know, being an experienced Member, that I cannot comment publicly on the identity of bidders or the process under way, for the reasons I elaborated at the start. She draws a lot of conclusions from media speculation, on which it would be irresponsible for me to comment, but I will try to give her some reassurance, flowing back to the objectives behind the sale that I set out in my answer. It is precisely because we want the GIB to be able to do more, unfettered by the constraints of the state, that we are seeking to put it into the private sector.

The objectives that we set out in the sale could not have been clearer and have been discussed in the House, and they include clear objectives around securing value for money for the taxpayer, which must be our primary responsibility. We want to ensure that the GIB can be reclassified to the private sector, but we have also been clear that we want to move it into the private sector to enable the business to grow and continue as an institution that supports investment in the green economy. We are selling it as a going concern, and potential investors would have to buy into the company’s green business plan and project pipeline. These are the criteria that we have set and against which we are evaluating the proposals before us.