Neil Carmichael
Main Page: Neil Carmichael (Conservative - Stroud)
Vince Cable
I take it that, despite the slightly carping tone of the response, the Opposition do support this proposal. It is important that they support it, because the concept of the green investment bank is that it should be an enduring institution that lasts through successive Parliaments. It is important that we have all-party support for what we are doing.
The right hon. Member for Southampton, Itchen (Mr Denham) seems to be claiming credit for this policy, which leaves me with a very simple question: why, in 13 years, did Labour not do it? The demand was there and there were institutional finances looking for such an institution, but it never happened. Why did the Labour Government not do it? They did have a financial vehicle to fund infrastructure investment: the private finance initiative. The whole point about PFI was that it was off balance sheet and the debt was hidden. It was not independently assessed as the green investment bank will be, and as a result numerous institutions, including hospitals and schools, have been lumbered with debts that they cannot manage. Our proposal is a soundly based financial institution leading with equity risk capital, which is what this kind of investment requires.
The Government present this, and I am a Business Secretary proud to lead on such an environmental initiative. The right hon. Gentleman referred to something I said earlier about carbon objectives. We must obviously strike a balance between promoting new green industries and jobs, which are absolutely crucial for growth, and taking proper account of energy-intensive industries, several of which are well represented on the Opposition Benches, such as the steel, ceramics and chemicals industries. Of course we must take those into account and manage the process by which the expansion of green industries takes place alongside proper regard for those industries. I am surprised that he is so insensitive to an important sector of industry that should be of concern to many of his Back Benchers.
The right hon. Gentleman asked about the timing of legislation. Legislation will be initiated once the state aid process has been completed, and we hope that that will take place rapidly.
The right hon. Gentleman asked specifically about less mature technologies, and he is quite right that there is a spectrum of activities of varying degrees of risk and maturity. There are institutions, including the excellent technology strategy board, to take on early stage technologies, and there are bodies such as the Carbon Trust to deal with early stage activities. The green investment bank has a specific role and mandate for projects that are high risk, but none the less mature and ready for commercial investment.
The right hon. Gentleman asked about the scale of the activity. I do not think that most people would regard £15 billion of investment as trivial, and such an undertaking by the end of this Parliament is very ambitious. He says, “Well, why don’t you just borrow more?” But that is the problem. We have an exceptionally high level of debt in relation to our GDP, and it is a painful process working it down, which is what the Government have been doing. It is frivolous and irresponsible to say that we can deal with those problems simply by borrowing more and adding to the debt.
Neil Carmichael (Stroud) (Con)
I welcome this excellent statement, because it describes an institution wholly appropriate to the needs of Britain, but will the green investment bank be able to support small and medium-sized businesses in a significant way? They are often the drivers of innovation.
Vince Cable
It will be difficult to support small and medium-sized enterprises directly—but there are other mechanisms for doing so. One area of investment will be industrial energy efficiency, and through the aggregation of projects, SMEs might well be part of that.