To ask Her Majesty’s Government what assessment they have made of progress made on the sale of the Green Investment Bank.
My Lords, on behalf of my noble friend Lord Barker of Battle, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.
My Lords, the sale process is commercially confidential and I am unable to provide details of progress at this time. However, the Government have committed to providing a full report to Parliament once the sale is completed. The Government launched the sale process on 3 March 2016 and we expect it to be complete before the end of the financial year.
My Lords, I congratulate my noble friend on his new position and thank him for that Answer. The Green Investment Bank is the jewel in the crown of the Government’s green energy policy. There is huge concern at the moment that the preferred purchaser may have a mind to purchase the whole of the Green Investment Bank and dispose of the individual parts for a price higher than might be paid to the Government. What further assurance can my noble friend the Minister give the House today about the future of the Green Investment Bank and its integrity, excellent work and the huge success story continuing after privatisation?
My Lords, the Green Investment Bank has been a huge success—I do not think anyone doubts that. From a start-up four or five years ago, it has developed into probably the finest financial institution in this space. The Government have two objectives: first, to get value for money—certainly not to sell the assets for less than they are worth; and secondly, to free up the Green Investment Bank so that it can use its expertise to back more sustainable projects in the future.
My Lords, I give credit to the coalition Government for setting up the Green Investment Bank. It was a very good move and I deeply regret the privatisation because I feel that we will, perhaps, lose some momentum. However, in a debate yesterday in the other place the right honourable Member for West Dorset said that the privatisation of the Green Investment Bank would be judged on its increasing the spend over the last full year, which I think was £700 million. Is there any commitment within the bidders’ bids—I do not think this is confidential—to increase investment so that the good work can continue?
My Lords, I think the Green Investment Bank has spent just over £2.5 billion so far and has brought in about £8 billion of private investment to complement that, so it has committed a total investment of about £10 billion. Clearly anyone who buys the Green Investment Bank will want to see that investment grow. That will be very much part of the negotiated discussions that we are having with interested parties.
My Lords, I declare an interest as a trustee-designate of the Green Purposes Company. Given Nick Hurd’s very strong statement in the House of Commons yesterday that the Government’s number one priority was to obtain the right value for the Green Investment Bank—which we get—surely the integrity of the bank going forward should at least be an equal priority. Can the Minister confirm that please?
The Government’s commitment to the integrity of the Green Investment Bank was made clear by enshrining its five green, core purposes in the articles of association of the company and the assurance that, if the company wants to change those green purposes, it has to get the agreement of the independent trustees, of whom the noble Lord is one.
I welcome the noble Lord to his new Front Bench duties and look forward to working with him. The issue that has just been raised is important. Surely it is now clear that the trustees will be unable to prevent the green mission being changed, because the way that the deal is structured means they can be bypassed. Is it right that there will be no obligation on the new owners to continue investing in the UK, contrary to the requirements of the Act passed by this House?
On the latter question of whether the bank may invest overseas, I understand that it is already considering projects in India and east Africa. One purpose of introducing private capital into the Green Investment Bank is to give it more flexibility to develop the business in future.
The question of the noble Baroness, Lady McIntosh, was about the possibility of the bank being broken up for profit-taking. Is that possible, or will it remain completely intact?
My Lords, no business would say that it will be intact for ever. Interestingly, the Green Investment Bank manages an investment fund of £800 million. It is the biggest investment fund in the renewable sector in the UK. It has a whole series of investments in that fund, and of course some will be sold in future.
My Lords, the suggestion in the Sunday papers was that the integrity of the bank was under threat. It is not sufficient just to support the objectives of the bank; this is about its integrity. Can we have an assurance from the Government that they are seeking to protect that integrity as well as the objectives?
I can give an absolute assurance that, in assessing which company or organisation might acquire the Green Investment Bank, the integrity and commitment of that company to the green purposes of the bank is crucial.
One of the interesting comments in last Sunday’s press about the issue was that Macquarie bank was one of the favourites to buy the Green Investment Bank. The Minister will be aware of Macquarie’s ownership of Thames Water, where it has stripped probably three-quarters of the assets of the company, to the extent that it will be unable to fund the Thames tideway tunnel. Is that a good example of integrity?
As the noble Lord will know, the Government signed confidentiality agreements as part of the sale process and I cannot comment on any individual purchase or otherwise.