The Conservative Party’s decision to sell off a stake in the Green Investment Bank (GIB) has been slammed by senior politicians and Conservative think-tanks.
Yesterday the government revealed that it was to sell off stakes in the GIB in an attempt to raise private capital, reducing the level of investment derived from public funds.
Chancellor George Osborne said it would enable the GIB to “access larger pools of capital” and act more freely to invest in green technologies, however some Conservative members have acted with disdain.
Ben Caldecott, an associate fellow at Conservative-back think-tank Bright Blue and former advisor to the Green Investment Bank Commission, said the part-privatisation was the “last thing we need”.
“The last thing we need is a publicly supported, but privately owned, asset manager using subsidised capital and jobs to compete with the private sector. In contrast a majority publicly owned institution can work in the public interest to catalyse new private investment and be truly additional, by helping the private sector to reduce the cost of capital for important projects that can deal with our national productivity crisis,” he said.
During the Department of Energy and Climate Change’s first parliamentary questions session yesterday, Scottish National Party politician Callum McCaig also questioned how minister for energy Andrea Leadsom would continue to move the UK towards a low-carbon economy in private hands.
“Conservative Members are delighted to learn that owing to the success of the Green Investment Bank, which was only created under the last Parliament, it is now in a position to expand even further by means of private sector investment and access to capital markets, and to do yet more to support and improve the emergence of a green carbon economy,” Leadsom responded, stating that MPs should not be concerned over the announcement.
Julie Elliot, Labour MP for Sunderland Central, also questioned whether the part-privatisation was not merely the Chancellor “raiding the bank’s capital reserves” and “robbing the UK of a unique tool to power the clean energy sector”.
Energy secretary Amber Rudd defended the decision and insisted that the GIB’s purpose would remain to invest in green technologies, arguing that the government had gone “one step further” than Labour’s plans to grant it more borrowing powers.
Green Party MP Caroline Lucas slammed the decision as “rash and irresponsible” and said it called into question the Conservatives’ commitments to renewable energy while Nick Mabey, chief executive of think-tank E3G, said it would be “reckless” and damage investor confidence.
Finer details of the sale have yet to be disclosed, however the Financial Times has reported that as much as 70% of the GIB could be sold off.