My Lords, I welcome the amendments tabled by the noble Lord, Lord Teverson, if for no other reason than that they encourage us to have a wider debate about how this bank can operate and gain access to finance. This is important in the context that we need to see a huge upscaling of investment into the UK’s low carbon infrastructure. It is estimated that around £220 billion and £330 billion is needed over the next decade, and historic levels of investment have been very low at only £6 billion to £8 billion. We need to be thinking creatively about how we can massively increase the available revenues for the bank. It is unfortunate in that context that the Government
have set out on this path with at least one arm tied behind their back by preventing borrowing. We will come on to talk about that as we move through the amendments.
In the context of having set up a bank and putting a relatively low amount of money in to start, then putting in a hurdle against borrowing further, it is important for us to think creatively. In fact, it forces us to think creatively so I very much welcome the amendments of the noble Lord, Lord Teverson, which raise two very interesting ideas.
The EU ETS is a complex piece of legislation, but it creates a new asset class in that it creates allowances that have a financial value. I am not sure how they are managed because maybe that falls between DECC and the Treasury, but I suspect that we are not managing it as well as we could be. In addition to thinking about the revenues that we have gained directly from the auctions, how about thinking about the allowances themselves as assets that can be used to secure loans? They clearly have a financial value but as the noble Lord, Lord Teverson, suggested, sadly their value at the moment is low because we simply have an overabundance of these allowances.
I welcome the creation of the Green Investment Back if for no other reason than it now means that we have a smart set of individuals drawn largely from the private sector—from banks and financial institutions—who I am sure can, if they put their minds to it, come up with various clever mechanisms for raising finance. I urge the Minister and his department to say to the noble Lord, Lord Smith, and his board, “Let’s think creatively and open up this debate. We have an emissions trading scheme that creates this asset class. How could we use it to increase the level of investment into the things that we want to see built?”.
On the second suggestion regarding the Nuclear Liabilities Fund, I share some of the concerns of the noble Lords, Lord Jenkin of Roding and Lord Wigley. But again, it shows we are thinking creatively. I understand that a financial fund needs to be available for the time of decommissioning, but the nuclear profile of our stations is fairly clear. We may have life extensions and we all know in advance when that money is needed. I do not see any danger therefore in using some of that to raise more finance and create wealth in the interim as long as we are managing it correctly. So I welcome the amendment; it opens up an interesting debate about how we currently manage money in government. Now that we have created essentially a Government-owned bank, I hope that over time and, as the noble Lord, Lord Teverson, was very keen to stress, when the right moment occurs, we will see this bank stepping into much more interesting territory. We look forward to the Minister’s comments on that point.
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