Business leaders fear for Green Investment Bank
A powerful group of businesses, entrepreneurs, campaign groups and MPs has urged the government not to compromise its plans for the green investment bank.
The group which includes Microsoft, Bank of America Merrill Lynch, Friends of the Earth and Conservative MP Tim Yeo set out its thoughts in a Green Investment Bank position document. It argued that the bank would require between £4-6 billion of capital over the first four years.
"This is the minimum required to ensure the GIB fulfils its potential to help make the UK a world leader in the supply and deployment of low-carbon technologies," said the statement.
The government has already pledged to set up the bank but it will not announce further details until after the autumn spending review. By then the group fears the need to make cuts may leave the bank starved of much needed capital.
"The spending review cannot just be about budget cuts," said Peter Young, chairman of co-organisers the Aldersgate Group. "We also need to restore growth and build a more resilient economy for the future."
Despite the costs the group believes the bank could provide substantial economic benefits. By stimulating the green economy it can increase long term competitiveness of business, provide additional jobs and protect customers from future price shocks in fossil fuels.
Furthermore, it argues, setting up the bank needn’t affect the government’s spending plans. Funding could come through a number of measures including the sale of assets such as the Channel Tunnel, as well as green bonds and green ISAs.
Over time, the group believes the bank could raise as much as £100 billion in private investment.
"The previous government planned to raise £1 billion from sales of assets such as the Channel Tunnel rail link," added Young.
"The bank could also raise capital from current government policies such as a carbon floor price or EU ETS. By using these mechanisms, our minimum target of £4-6 billion for capitalisation is readily achievable without impacting on the budget deficit."