My Lord, this is perhaps a weightier issue. When I was looking at the background to this amendment, which is really about the Green Investment Bank’s financial muscle, I was looking for some inspiration on climate change and carbon emissions, and I came across this statement:
“We need to cut our carbon emissions to tackle the challenge of climate change. But the low carbon economy also provides exciting opportunities for British businesses. We will encourage private sector investment to put Britain at the forefront of the green technology revolution, creating jobs and new businesses across the country”.
More important is the next sentence, which says,
“we will create Britain’s first Green Investment Bank—which will draw together money currently divided across existing government initiatives, leveraging private sector capital to finance new green technology start-ups”.
Hallelujah. These statements are from the 2010 Conservative Party manifesto, which is intriguingly entitled Invitation to Join the Government of Britain. As Liberal Democrats, we actually did, so in many ways it was a successful manifesto. The serious point that comes from this is exactly the one that is in those manifesto statements. For a Green Investment Bank to be able to do what it says that it will do, it must be able to lever, not just now but into the future, sufficient funds to meet the vast requirement for green investment that this country needs. As we know, in the energy sector alone that is some £200 billion in generating capacity and in networks over the next 10 years, though we will hope to reduce that through demand-side reduction. But there is a great task to do.
I fully welcome the Government’s commitment to £3 billion of real money at a time when the national accounts are finding it difficult to find spare cash. I strongly welcome, as I have in the past, the availability of this £3 billion. I agree with the chairman of the Green Investment Bank, who said in this Chamber at Second Reading that this was sufficient money for them to get on with, and to start to create a track record for, the bank. It is very important that the Green Investment Bank starts to build up this track record. For a major financial institution, that will take considerable time and very careful investment. I also probably agree that the £3 billion will last until 2015 in terms of commitments, if not actual investment that will go beyond that.
The Government have still not responded to the fact that money is starting to be invested now—and we will arrive at 2015, or maybe 2016, when these commitments are used up, with an investment track record created on the way—but you cannot build up a reputation of trust in a bank, which, as we all know, is essential, unless you know that the doors are going to remain open for business, apart from just collecting the money that has been lent or the investments that have been made on the dividends, beyond three years from now. For anybody who wants to take the Green Investment Bank seriously as a long-term instrument for green regeneration in this country, as was so eloquently described in the Conservative Party manifesto, surely we need to have some reassurance, some positive sign, and some certainty that there will be resources to invest after that period. So far, the sounds that have come out of the Treasury, if not BIS, which sponsors this Bill, is that it is pretty reluctant to make that commitment. That undermines the chairman and the chief executive of the bank, whom I have met. Their appointments are excellent, and I congratulate the Government on them, but we pull the rug from under their feet if we do not assure them that there is a financial future, an investment future and a lending future beyond 2015.
Another area that I shall briefly bring up is that it concerns me to some degree that the £3 billion is going to be available to the Green Investment Bank beyond 2015-16, if that period is needed. To build up a track record in terms of investment, it has to make the right choices. I was very pleased that the Minister underlined the investment independence of the bank. That was a very strong and important message, not just to us but to investors and future users of this fund. It would be a tragedy if the board of the Green Investment Bank felt under pressure to spend that money because otherwise it would lose it. Those pressures will be much less if there is a route to further finance for the future. All this amendment does is to put in a simple way a simple mechanism by which that process starts now. In the finance sector, with extremely long gestation periods for investment in green industries, we need certainty now for the time when this £3 billion runs out. I will be very interested to hear the Minister’s assurances on those areas. I beg to move.