UK EXCLUSIVE by Scottish Energy News Reporter
The Westminster Parliament’s green watchdog has warned the Government that its proposed privatisation of the Edinburgh-based UK Green Investment Bank must not go ahead unless it ensures that the Bank’s guiding renewable energy objectives are protected and strengthened.
MPs on the Environmental Audit Committee have criticised the Government for taking the decision to privatise GIB without due transparency, publication of relevant evidence, consultation, or proper consideration of alternatives.
The also say that the Government has not put robust enough safeguards in place to protect GIB’s green purposes, and calls on the Government to establish a special share to protect GIB’s green purposes.
The report identifies two key risks that could result from the privatisation that cannot be avoided merely by protecting its green purposes.
First, that the GIB will move its focus away from novel and complex projects that struggle to find funding in favour of easier, more commercial projects.
Second, that a privatised GIB could invest in areas which may damage its reputation and undermine its leadership role in the green economy.
Huw Irranca-Davies MP, (Labour) Chairman of the Environmental Audit Committee, said: “The Green Investment Bank has done a great job of getting capital flowing to the kind of innovative green projects that sometimes struggle to secure financial backing.
“The decision to privatise GIB appears rushed and Ministers have not produced convincing evidence that it will achieve its aims better in the private sector.
“The Government is currently relying on assurances from potential shareholders and the commercial case for retaining the Green Investment Bank’s green purposes. That is not robust enough.
“The Government must ensure the Green Investment Bank continues to do what it says on the tin. If the Government cannot guarantee that the Green Investment Bank will retain its green purpose in the private sector then the sale should not go ahead.
“The green purposes of GIB must not only be properly protected – they should be strengthened. The Government should retain a minority stake in the Bank to ensure its long- term strength and demonstrate the UK’s commitment to the green economy following the Paris climate agreement.”
Other MPs on the Conservative-dominated committee include Zac Goldsmith – who is also the Tory party’s candidate for the lord mayor of London – and John McNally, SNP MP for Falkirk.
The committee also said that the Government must publish a business case and all impact assessments related to the sale before proceeding with the de-nationalisation of the GIB.
If the GIB is not privatised, then it should be granted borrowing powers, the report added.
The Committee took evidence from only a handful of people – mostly senior civil servants in the UK Treasury – and the chief executive of the Green Investment Bank, Shaun Kingsbury. Already one of the highest paid civil servants in the UK, Kingsbury is keen on privatisation.
And in a reply to a question from McNally about the bank’s commitment to retaining an operating head office in Edinburgh should GIB be de-nationalised, Kingsbury said:
“We have also built the bank right from the very beginning with two offices. We have half the leadership team in London, half the leadership team in Edinburgh. The board and the chairman sit in Edinburgh. Edinburgh is a core part. We couldn’t separate the two and Edinburgh stands on its own two feet as a great place to find the talent we need at a lower cost than London. We are committed to Edinburgh”.
McNally revealed that he has ‘an interest’ in this issue in the form of a ‘relative involved with GIB in Edinburgh’.