The Government completed the sale of the Green Investment Bank (GIB) to Macquarie on 18 August 2017. The Secretary of State for Business, Energy and Industrial Strategy (SoS) has provided an indemnity for GIB employees in relation to a specific diligence and disclosure exercise conducted as part of the sale process. This indemnity created a notifiable contingent liability.
On 7 March 2017, Government notified the Chairs of the PAC and BEIS Committees of its intention to enter into this contingent liability in accordance with the non-standard notification procedure set out in Managing Public Money because the GIB sale process was subject to strict commercial confidentiality agreements that limited the information that could be disclosed publicly by either bidders or the Government. The indemnity was then entered into on the 19 April 2017, the date on which the Government signed an agreement to sell GIB to Macquarie.
The indemnity is for GIB employees who were involved in a specific diligence and disclosure exercise, in their personal capacity and not for GIB as an organisation, as it was never intended that any individual GIB employee would assume personal liability for claims made as a result of the support that they have provided the SoS, except where there has been fraud, wilful default or bad faith. The indemnity is uncapped and not time limited. The prospect of a claim is assessed as remote and that of a claim against the Government’s indemnity very remote. This indemnity cannot be called upon by any of the parties to the sale as they have waived the right to bring a claim against GIB employees. A claim can only be brought by a third party.
If the liability is called upon, provision for payment will be made through the normal supply procedure. The Treasury approved the proposal in principle prior to the then Chairs of the PAC and BEIS Committees being notified.
As a matter of record, I have today laid a copy of a Departmental Minute for both Houses explaining the procedure followed and containing a description of the liabilities undertaken.
This statement has also been made in the House of Lords: