More clarity, speed and teeth will be needed if the Government’s Green Investment Bank is to work, says Industry.
The deputy prime minister Nick Clegg said the GIB would have “full operational independence” and its own board.
CBI director general John Cridland warned that the Government must keep its word as the GIB won’t work if it “needs the Treasury’s permission to blow its nose”.
Cridland added that the new GIB must have “teeth” if it’s going to deliver a new low carbon infrastructure and leverage £450bn by 2025 to bring this about.
The National Infrastructure Plan, published last October, found that £200bn needed to be invested in the UK’s infrastructure over the next five years, with over 70% coming from private investment.
Cridland also warned against “compartmentalizing green business” as he argued this dimishes it. He added: “Because this is an issue that matters to us all, not just a few specialists. We see it as part of a puzzle for fixing the whole economy.”
Vice chairman of Climate Change Capital, the environmental investment manager and advisory group, James Cameron, warned: “Momentum has to be maintained so that investors can receive the signals they need to deploy capital at scale into Britain.”
While Institution of Civil Engineers director general Tom Foulkes agreed and said the move would be a “real test” of the Government’s commitment to securing the investment needed, set out under the National Infrastructure Plan.
However, he described the £3bn startup fund as “relatively small” and flagged its inability to borrow until 2015.
Grant Thornton has urged for more detail on the scope of the GIB. Energy, environment and sustainability partner Nathan Goode predicted that a debate would need to be held to determine what the bank’s early priorities would be.
Goode described Clegg’s reference to political philosopher John Rawls as “interesting” and added: “It appeared to stress the social element of a low carbon strategy, but the question as to what extent this will influence the remit of the Green Investment Bank in practice remains.”
Liberal Democrat Peer and ADBA chairman Lord Redesdale wanted the GIB to give “proper support for local AD” as well as large scale power plants.
He said: “The GIB could help reduce the perception that AD carries high financial risk for investors and reduce the cost of borrowing.”
Plans for the GIB were announced yesterday lunchtime. It will be able to lend from April 2012.