Green Investment Bank

Debate between Kevin Brennan and Clive Lewis

Thursday 29th October 2015 Westminster Hall

[Kevin Brennan]

If it was the fault of the hon. Member for Beverley and Holderness that we descended into partisanship, credit should go to the hon. Member for Warrington South for raising the tone once again, bringing us back on topic and pointing out that it is important that the UK shows leadership in this area. Perhaps we can all agree on that, even if we do not agree on the extent to which that is currently being displayed by the Conservative Government.

As I said, this has essentially been a very successful innovation. One problem—we have had differences of opinion about this during the debate—has been the restrictions placed on the Green Investment Bank in relation to borrowing. Obviously, the Treasury does not want that to appear on the books, because of the targets that it has set in relation to deficit reduction. However, we have come to a strange pass when even something that we could all agree would be a good thing, even good borrowing, is bad if it is on the Government books, simply because it is on the Government books. Hon. Members touched on this during their contributions. Sometimes in this country we seem to be the prisoners of public accountancy convention, rather than common sense, in relation to when borrowing is a good and effective thing to do—when it is to invest to grow our economy in the future in a sustainable way.

[Clive Lewis (Norwich South) (Lab)]

I want to touch on my hon. Friend’s point about good investment. What we need to look at is this. Over the last three or four years—since 2012, I think—one third of all the growth in the UK, during very difficult years when we were sometimes in recession, came from the green economy. It accounted for about 1 million jobs in the low-carbon sector, worth £128 billion. It is now very disappointing—in fact, tragic—that the Government seek to undermine one of the key drivers of that sector, as we have heard today from so many hon. Members.

My last point is that if we were able to tap into one third of our country’s potential in respect of wind, wave and tidal power, we could create another 145,000 high-quality jobs. When we look at those figures and at how the Green Investment Bank has performed so far, we see that we have to protect it.

[Kevin Brennan]

My hon. Friend will not be surprised to learn that I agree with that point. In relation to wave power, we are all very interested to see how the Swansea lagoon project proceeds. That is a very interesting development in the sustainable generation of energy; if it is a success, it could lead to even larger projects, particularly in the part of south Wales that I represent.

--- Later in debate ---

[Kevin Brennan]

The hon. Gentleman is right: that was the ruling in relation to state aid. For what it is worth, I find it difficult to see how we could meet our obligations in coming decades without some investment in nuclear. The hon. Gentleman and I may not agree on that—[Interruption.] The expression on the face of the hon. Member for Brighton, Pavilion tells me that she does not agree with me either, and I am not surprised by that. However, that is my view, and it is shared by quite a lot of people with strong green credentials. None the less, the hon. Gentleman is right to point this issue out, because it is absolutely an implication of privatisation.

Is the Minister concerned that these things will provide further uncertainty for low-carbon investors, at a time when there is great concern about the Government’s retreat on investment in wind power, for example? Do they send the right message to our international partners, on the cusp of the Paris summit, about the importance of renewables?

[Clive Lewis]

My hon. Friend talked about sending the wrong signals. There is a growing global divestment movement, which is moving funds and investments away from high-carbon fuels and into low-carbon fuels. In my constituency, I have Aviva, one of the largest insurance companies in the world. It is very concerned about the effect of climate change on its business models, and one of its clear goals is to divest its funds from high-carbon investments. We have heard about the Green Investment Bank perhaps changing its shape and becoming, in effect, another privatised bank. The Environment Agency, which has a £2.9 billion pension fund, has recently been looking to invest £450 million in low-carbon energy, but it has now said that that will be very difficult without a Green Investment Bank. Will my hon. Friend comment on that?

[Kevin Brennan]

Again, my hon. Friend makes an important and appropriate intervention—I can see why he has taken on a shadow Front-Bench role in a similar area, given his level of knowledge. It is a shame that the fact that he is not on the Front Bench for this debate precludes him from making a speech, which would have added greatly to our proceedings. There are a great many speeches that might have been made here in the last hour or so, although we have heard snippets of them in the form of interventions. I do agree with my hon. Friend.

The hon. Member for Beverley and Holderness asked about using the European fund for strategic investments, and I just want to remind the Minister—he is getting a barrage of questions, but he has plenty of time to answer them—that that question was asked.

Are the principles being used by the ONS that are causing the Government such a problem and dilemma used in other European jurisdictions? We have had evidence in today’s debate that that is perhaps not the case. Are we, therefore, allowing an accounting convention to undermine a key green policy initiative?

Have the Government considered structures other than privatisation for the Green Investment Bank? There have been suggestions that other legal structures might get round some of the issues the Government face.

The key question is, why are the Government in such a rush, given all the problems that have been identified in the debate? We know one of the reasons: they want to get the bank off the books—that is part of their deficit-reduction strategy. They are keen to do that as quickly as possible, and we know that significant cuts are coming in the autumn statement. However, it really would be a big mistake and an act of vandalism to rush things just for that reason and to get them wrong, with the Green Investment Bank ending up just like any other bank and perhaps being gobbled up by some Chinese bank. Would it not be better to pause, step back and get this right so that that does not happen? We have learned over many years that making policy in haste is not wise. It is certainly not wise to privatise in haste, because we repent at our leisure. That is not a sustainable way to make policy.