Green bank: Now the ball is in Vince’s court
The general view on Nick Clegg’s briefing on the Green Investment Bank yesterday is that important progress was made towards the goal of a fully independent, legally based, well funded bank with full borrowing powers from day 1. Tomorrow it’s Vince Cable’s turn with a statement to the House and a possible GIB consultation paper. So far, this is what has been achieved:
- Legislation – a clear commitment is a big step forward. As Transform UK points out, This was on a knife edge even over the weekend so it is a big relief it has come through. Investors made it clear last week they wanted to legislation. There is no time-line but we have a chance of getting it in 2012-13. Priority one for lobbying.
- Borrowing – Clegg made it clear to a journalist that the GIB would have ‘full, independent borrowing powers”. This is key, but watch out for the BIS document tomorrow. We must absolutely keep the government to this commitment. We can expect Treasury to continue fierce resistance.
- Green Deal – it was a big step forward that the DPM also said that they were looking closely at role GIB can play in supporting Green Deal home insulation scheme. Obviously we see the GIB as providing low cost finance. It was totally discounted before. We will continue to push for the bank to fund community / small scale renewables.
- Independence – this came through very strongly yesterday, and is a key reason for the need to set up GIB in legislation.
The one big obstacle remaining is when the GIB can start borrowing. The chancellor George Osborne disappointed many when he said in the budget that it would not be until 2015 and only if the national debt is falling by then. That hasn’t changed. Clegg was challenged by LSE economist Dimitri Zhenghelis yesterday, who said 2015 was “exactly the wrong date”, arguing that the moribund cash pile in the UK at the moment needs putting to work now.