Lord Hope of Craighead
Main Page: Lord Hope of Craighead (Crossbench - Life peer)
Lord Teverson (LD)
My Lords, I thank the Minister very much for her kind words and the noble Lord, Lord Mendelsohn, for his great support and that of his colleagues all the way through this process. I also very much welcome the work and effort that the Minister put into persuading her ministerial colleagues to go down this route. I am sure that she was vital in that process. I hope that, because of this, as she said, all parts of the House are happy with the position we have reached and that the conditions which were put in the Bill will now be delivered in practice. As we have always said from these Benches, we were not really concerned with how it happened as long as it did happen. I am sure that we will have an institution which we in the United Kingdom, including the environmental movement and the financial community, can be proud of for many years to come, and that we will not face yet another generic financial institution with no real focus in the environmental area or anywhere else. We have avoided that happening in the longer term.
I want to speak briefly to Amendment 30B, in the name of the noble Lord, Lord Mendelsohn. We have had a number of discussions about the privatisation of the Green Investment Bank. One area of discussion was the frustration—I came to be very sympathetic to the Government over this—in trying to determine whether amending legislation would mean that an institution on which we were legislating ended up in the public or private sector. I read through all the guidelines published by Europe and the ONS on classification but it seems that, despite them, a lot of these issues are not straightforward. They are quite subjective in many ways. The nub of this—the noble Lord, Lord Mendelsohn, put this over very well—is that it gets in the way of the parliamentary process. If, because of a particular amendment or the way in which legislation is written, the Government cannot be certain at the end of that process whether a body is in the public or private sector, it means that they are forced to be conservative with a small “c” in estimating how an amendment should be phrased. That is not healthy for parliamentary debate or the way in which legislation is formed.
Although this is a limited amendment, I very much agree with its spirit. But I say to the House that this area needs to be investigated further. The amendment would not challenge in any way the independence of the ONS, which is clearly sacred; but its transparency and the way its decisions are made, pre-event as well as ex post, are extremely important. I wish the Green Investment Bank every continued success in its mission to stimulate the green economy. It has been successful in the past and I hope that, through its privatisation, it will be even more successful in the future.
Lord Hope of Craighead (CB)
My Lords, the chairman of the Green Investment Bank, the noble Lord, Lord Smith of Kelvin, is not in his place this afternoon, but I am sure he would like it to be said on his behalf that he is grateful to the Government for agreeing to remove these three clauses from the Bill and to the noble Lord, Lord Teverson, for all the work that he has done to bring this solution about. I think it is right to say that as far as the chairman is concerned, his main aim in detaching the bank from the public sector is to attract investment. From his point of view, investment is vital if the bank is to fulfil its ambitious plans to double the size of its business and to deliver a growing green project—I am quoting from one of the letters which, as the Minister said, have been placed in the Library. So minimising the risk of the bank being classified as part of the public sector is part of the strategy of the noble Lord, Lord Smith, to attract investment, and from his point of view, the result of the amendments the Minister has moved will be to help him to deliver what he is seeking to deliver.
I think I should mention also that steps have been taken by the bank to make progress with the overall scheme that has been devised. A new special shareholder company has been incorporated and agreement from three very well-established and reputable institutions has been secured so that they will help the bank to find individuals to serve in a personal capacity as trustees of the special share that has been set up. The structures are now being put in place and the step being taken this afternoon is really the last in the series of steps to bring about the reality that the noble Lord, Lord Smith, has been seeking to achieve for some months. So, on his behalf, I repeat the thanks to various people, including the Minister, for what has been achieved.
Baroness Neville-Rolfe
My Lords, I thank all noble Lords, especially the noble Lord, Lord Teverson, for his gracious comments. This has been a brief but constructive discussion. Let me reiterate that the Government not only support the intention of this provision but are already acting on it. I am also very grateful for the intervention of the noble and learned Lord, Lord Hope, speaking on behalf of the noble Lord, Lord Smith, who could not be here today. He rightly underlined the importance of the external investment that the Green Investment Bank is seeking to raise to realise its exciting green ambitions.
Working across this House, we developed a mechanism that meets our purpose. It allows the bank to move to the private sector, meaning that it can grow and increase its green impact, and it ensures that its green mission is protected. With regard to the amendment tabled by the noble Lord, Lord Mendelsohn, the ONS publishes its decisions routinely. Indeed, for some classification decisions, such as that of Royal Mail or Lloyds TSB, the ONS also provides detailed reasoning behind the classification decision. I can reassure the noble Lord that the ONS has confirmed that it will publish a detailed explanatory article on its decision on the classification of the GIB.
However, I must emphasise—this is the nub of the problem—that a decision on the GIB will be taken only after the sale has taken place. There is a reason for this. Until the ONS is able to look at the full facts of the matter, such as the legislation which exists at that point in time, the precise nature and number of the shareholders, their rights and so on, it cannot make a formal decision on which party is in control of the body, and hence on its classification. That is why the Government engage with ONS during the development of policy proposals, where ONS will give a formal, but provisional, classification assessment. That is what we did with the special share structure which the GIB is now putting in place. As I mentioned earlier, the ONS has given us a formal opinion that this structure should not prevent the GIB moving to the private sector.
The noble Lord, Lord Mendelsohn, rightly asked why the decision could not be published earlier. As I have said, the decision will come after the sale has completed. Until the full details, which would include legislation, ownership and contractual arrangements, are known, any judgment on who controls the body could only ever be provisional—so providing an earlier decision would not enhance certainty. Unfortunately, the nature of these assessments can be complex and cases can be time-consuming, although I am glad to say that the ONS publishes its forward work plan every quarter, which sets out the classification issues that it will be considering.
So what is the way forward? I understand noble Lords’ frustration; I have to say that I shared it myself in spades on the question of public sector classification and the ONS’s role. These concerns go wider than just the issue of the Green Investment Bank, and I am happy to undertake to bring them to the attention of my colleagues in the Treasury to see if anything can be done for future cases to help rightly risk-averse government Ministers.
I hope that we can all agree that we have reached a good outcome for the Green Investment Bank and wish it well, and I hope that in the circumstances the noble Lord will feel able to withdraw his amendment.