The Environmental Audit Committee’s inquiry into the Green Investment Bank is examining the fundamental issue raised in the recently reported comments of Secretary of State Chris Huhne.
The Committee notes press reported comments attributed to Chris Huhne MP, the Secretary of State for Energy and Climate Change, that the Green Investment Bank may have a staggered introduction, which could see it initially set up as a more limited ‘fund’, unable to raise funds by issuing ‘green bonds’ to back green infrastructure projects. He is reported to have suggested that the new institution could become a finance-raising bank over time, as the UK’s deficit is reduced. However, he subsequently told Parliament that the Guardian article “ gave only a partial view” of what he had said and indicated that as a ‘bank’ it would undertake bank functions – borrowing and lending.
The Environmental Audit Committee is currently conducting an in depth inquiry into the prospective Green Investment Bank. It has taken evidence from the Chairman of the Green Investment Bank Commission, the Carbon Trust, Ofgem, Climate Change Capital, and the Co-operative group and others, which has emphasised the importance of the Bank being a bank able to raise its own funds from private investors, rather than be simply a government fund.
The Committee is taking further evidence from Justine Greening MP (the Economic Secretary to the Treasury) in January 2011 and Vince Cable MP (Business Secretary) in February 2011, which will provide the Committee with the opportunity to consider this issue further. The Committee plans to report its findings subsequently, before the Government decides of the Bank’s governance, remit and financing.