Enterprise Bill [Lords]

John Bercow Excerpts

Tuesday 8th March 2016 Commons Chamber

Consideration of Bill, as amended in the Public Bill Committee

[Mr Speaker]

As I informed the House on Monday 26 October, before a Report stage begins on a Bill, I will seek to identify in advance those changes made in Committee that I would expect to certify, together with any Government amendments tabled on Report that, if passed, would be likely to lead me to issue a certificate. My provisional certificate, based on those changes and expected amendments, is available in the Vote Office and on the “Bills before Parliament” website. At the end of the Report stage on a Bill, I am required to consider the Bill as amended on Report for certification. At that point—tomorrow, in this case—I will issue my final certificate. As I informed the House on 26 October, I have accepted the advice of the Procedure Committee not, as a rule, to give reasons for decisions on certification during this experimental phase of the new regime. Anybody wishing to make representations to me prior to any decision should send them to the Clerk of Legislation.

New Clause 4

Objectives of UK Green Investment Bank

‘(1) Prior to a sale of shares of a UK Green Investment Bank Company (as defined in section 30(2)) the Secretary of State shall—

(a) ensure that the objects of the UK Green Investment Bank Company contained in its articles of association (“the Objectives”) shall be—

(i) the reduction of greenhouse gas emissions;

(ii) the advancement of efficiency in the use of natural resources;

(iii) the protection or enhancement of the natural environment;

(iv) the protection or enhancement of biodiversity;

(v) the promotion of environmental sustainability;

(b) ensure the articles of association of the UK Green Investment Bank Company require its directors to act and review their actions against the Objectives;

(c) create a special share; and

(d) establish a company limited by guarantee registered with the Charity Commission (“the Charitable Company”) that will own the special share.

(2) Any amendment to the Objectives shall require the consent of the Charitable Company, as holder of the special share.

(3) The special share shall—

(a) have no income or capital rights;

(b) have no voting rights except on a vote to amend the Objectives and on a vote to alter the rights of the special share.

(4) The rights of the special share shall be deemed altered by the issue of any other special share of the same class.

(5) The Charitable Company that will own the special share shall—

(a) have three members, none of which shall be public bodies;

(b) have as initial members legal persons appointed by the Committee on Climate Change established under the Climate Change Act 2008;

(c) provide that if any member ceases to be a member the remaining members shall nominate the replacement member;

(d) provide that the members will be required to act unanimously in exercising the rights attached to the special share.

(6) For the avoidance of doubt, the Committee on Climate Change shall play no role in the conduct of the Charitable Company or its members following the initial appointment of those members prior to the sale of UK Green Investment Bank company shares by the Secretary of State.”—(Kevin Brennan.)

Brought up, and read the First time.

[Kevin Brennan (Cardiff West) (Lab)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

New clause 8—Disposal of Crown’s shares in UK Green Investment Bank Company: purchaser’s obligations—

‘Before any sale of the Crown’s shares in the UK Green Investment Bank Company takes place each prospective purchaser must enter an enforceable undertaking to fully fund the Bank’s current five year business plan.”

This new clause would ensure that the Green Investment Bank is maintained as a single, functioning institution and can continue to invest in the UK’s low carbon economy at the same level as was planned prior to privatisation.

Amendment 17, in clause 37, page 54, line 44, at end insert—

“6B Report on remuneration of chair, non-executive directors and executive team

(1) For each year following a disposal of shares held by the Crown in a UK Green Investment Bank company the Secretary of State must lay before Parliament a report on the remuneration of the company’s chair, non-executive directors and executive team by the company.

(2) The report shall include a statement of the framework or broad policy for the remuneration of the above individuals.

(3) The report shall include the value of the following, where applicable, in respect of each individual—

(a) salary or fee,

(b) pension,

(c) other cash or non-cash benefits, including bonus or performance-related payments, and

(d) shareholdings in a UK Green Investment Bank company.”

This amendment would require, following a disposal of shares in a UK Green Investment Bank company, that the Secretary of State to report annually on the remuneration of the Chair, non-executive directors and Executive Team of the company.

[Kevin Brennan]

New clause 4 might be referred to as the “hokey-cokey clause” because it has been in, out, and shaken all about during the passage of the Bill. I am not exaggerating when I say that, because this new clause should still be in the Bill. You may not be aware of this, Mr Speaker, so I will read briefly from the record about what happened with this clause in Committee.

In Committee the Chair put the question that clause 32 stand part of the Bill, and hon. Members responded “Aye”. The Chair asked for votes to the contrary, and said, “I think the Ayes have it.” The Minister then moved that the clause should not stand part of the Bill, and I raised a point of order to the Chair to point out that the Committee had just voted that the clause should stand part of the Bill, and that the Minister could not then move that it should not. The Chair then said:

“For clarity, I will put the question again.”––[Official Report, Enterprise Public Bill Committee, 23 February 2016; c. 201.]

The clause was accepted in Committee, but the vote was taken a second time because the Chair, in a spirit of extraordinary generosity and to save the Minister’s blushes, allowed a second vote. First the clause was in, then it was out, and today we are suggesting that new clause 4 should again be included in the Bill. It is not really a new clause; it was clause 32 when we considered the Bill in Committee.

The Government are wary of new clause 4, or old clause 32, because they fear that the Green Investment Bank’s borrowing would, because of the position taken by the Office for National Statistics, remain on the Government’s books and be classed as public sector debt after privatisation. If there were any suggestion of statutory control of the Green Investment Bank’s purpose, the ONS would insist that it stayed on the books.

There is currently statutory control of the Green Investment Bank’s purpose, to ensure that it is green and not just like any other investment bank. The Green Investment Bank is supposed to be a different kind of entity; it is not supposed to be like the bank that the Secretary of State worked for when he earned £3 million a year, and which was fined £600,000 by the European Union for fiddling interest rates. It is not supposed to be that kind of institution; it is supposed to be completely different and focused on sustainable investment in green projects, not based on the unsustainable culture of greed that brought the world economy to its knees in 2008, with millions of hard-working families still suffering the consequences of that. If the Green Investment Bank is meant to be a new kind of institution, how do we ensure that it remains so if the Government strip it of its statutory purpose, which is to invest in green projects?

In Committee we asked whether the Government should allow that potential ruling by the ONS to drive completely in this important area of sustainable public policy, but the ONS point is a technical matter. If the Green Investment Bank remains on the books after privatisation, that does not reflect any problematic public debt. It may cosmetically spoil the look of the Chancellor’s forecasts on public debt, but it would not change the fundamental underlying substance of public finances. In other words, statutory protection for the Green Investment Bank’s purposes is to be removed by the Government because of an accounting convention that is inconvenient to their political narrative. It is spin over substance on stilts.

As we discussed in Committee, the Green Investment Bank is not getting the same treatment as the Asian Infrastructure Investment Bank. The Treasury is all too ready to allow UK borrowing to be part of financing that bank, and it was not worried at all that public debt will be part of its financing. However, it is extremely reluctant to allow the same treatment for the Green Investment Bank.

You will not be surprised to hear, Mr Speaker, that I praised the former coalition Government for introducing the Green Investment Bank. Policy in that area can be difficult to implement, because by its very nature it is new and innovative—in Committee I quoted the wise words, as ever, of Kermit the Frog who said, or sang or croaked, “It’s not easy being green”. That is true. It is not easy, and this is an innovative and effective piece of public policy, and I praise the former coalition Government for introducing it.