Enterprise and Regulatory Reform Bill

Neil Carmichael Excerpts

Monday 11th June 2012 Commons Chamber

[Neil Carmichael (Stroud) (Con)]

It is a great honour to be called to speak in this important debate, and I am pleased to follow the hon. Member for Stretford and Urmston (Kate Green).

First, I want to make two general points. If we were relying merely on passing legislation to promote economic growth, we would have had a lot of economic growth already, because the truth of the matter is that legislation is aplenty. What matters, however, is what that legislation actually does, and this Bill will empower businesses to get on and do what they need to do, which is employ people and be innovative. My first general point, therefore, is that we need legislation that trusts business to get on with the job of generating economic growth.

My second general point is that we must not see this Bill in isolation from other Bills, such as the draft energy Bill, which will pave the way for new market developments, new technologies and new ways of providing energy. We need joined-up government. Indeed, economic policy is all about joined-up government, such as linking what this Bill paves the way for with other important pieces of legislation.

Let me illustrate that by talking about the green investment bank. I serve on the Environmental Audit Committee, and we produced a thorough report on the bank. We made three points, which I shall go through now as they are important both in respect of this Bill and for our future prospects of developing an economy that is both CO₂- effective and economically productive.

The Bill must ensure that the green investment bank thinks about small and medium-sized businesses. We must have legislation that salutes SMEs in the technology and energy production sectors and recognises their value. They are the businesses that will come up with the good new ideas that translate into development. That is certainly happening in my constituency, and I expect it to happen in others. This Bill needs to help bring that about. The first point, therefore, is that we must be sure that SMEs can benefit from the green investment bank.

The second point is that it has to be a bank, not a fund. If it were a fund, we would be using the regional development funds and whatever else might be at our disposal. We need a bank that knows what it can do in terms of both attracting other investment and investing itself and levering in additional money. It must have clout in the market. That is essential, because if it is to be a bank, it must look like a bank and feel like a bank, and people must think it is a bank. I acknowledge the constraints imposed by the deficit reduction programme and so on, and I have said several times in the House that we must reduce the deficit, but we must also signal that the green investment bank will be significant—a powerhouse of support for innovation, development and everything else.

[Ian Lavery]

At this point, does the hon. Gentleman believe that the green investment bank is a bank or a fund?

[Neil Carmichael]

It is called a green investment bank and that is what I shall call it, but I accept the need for us to ensure, in the shortest possible time, that it is a real bank and not just a fund. The fund is big, though— £3 billion—and we should bear that in mind.

The third important point about the green investment bank is the quality of its expertise. That will be vital in a bank that is dealing with the sort of technology for which its support will be sought. The Minister must recognise that the green investment bank has to be shaped in such a way that likely investors, borrowers and businesses that approach that bank will feel comfortable with the expertise it has and that, in turn, the bank can deliver that expertise to the firms. If we look at the banking system across the European Union, we can see that where institutions have that expertise—the European Investment Bank is a good example—it works. We have to build those critical elements into the legislation, so that the green investment bank packs a punch in terms of investment, expertise and small businesses.