Lord Teverson
Main Page: Lord Teverson (Liberal Democrat - Life peer)Enterprise Bill [HL]
Lord Teverson Excerpts
Lord Barker of Battle (Con)
My Lords, I support this amendment but I do so reluctantly and having thought about it a great deal. Before I go any further, I should draw the attention of the House to my declaration in the register of interests regarding private equity and clean energy, but that is not the reason I wished to speak.
I particularly wanted to speak because as a Minister at the Department of Energy and Climate Change, and more importantly perhaps as a shadow Minister for climate change in 2009, I was intimately involved in the creation of the policy that led to the creation of the Green Investment Bank itself and setting up, in opposition, the Green Investment Bank commission, which did an excellent job. I am delighted and privileged to follow the noble Lord, Lord Smith, who has been an outstanding chair of that institution, created in the previous Government as a result of that policy. I think that the Minister said that the Green Investment Bank was one of the key successes of the term of the coalition Government. I absolutely agree. Perhaps I am slightly partial but I think it will be one of the important, enduring legacies of that term of government.
I therefore looked at this amendment very carefully and was rather puzzled why, having made such a success of this institution, there should be what seems like indecent haste in trying to take it off the public books. But the more I looked into it the more persuaded I was that it was unfortunate but necessary, in the phrase that the noble Lord, Lord Smith, used. In so doing, however, and particularly as we are debating this on the first day of the climate change conference in Paris, COP 21, it is very important that a clear message be sent out: this is not a retreat from the green agenda or a lowering of ambition here in the UK on our commitment to meeting our stringent and ambitious carbon reduction targets, which are implicit and explicit in the Climate Change Act. Far from it—what we are actually doing is recognising that, perhaps unfortunately due to these complex accounting rules, we are being pragmatic and sensible and following a route that will allow this fast-growing institution to continue on its mission to mobilise capital and set it to work in the UK low-carbon sector.
By doing that, we are allowing the GIB not only to raise new equity from new investors—up to £2 billion in the first instance, I believe—but to have access to far greater borrowing. This was a key demand of other political parties and the major green NGOs at the time that the GIB was created, and indeed in the run-up to the general election. A constant refrain from those that had a particular interest and concern with mobilising capital into the green economy has been that the GIB should be given powers to borrow. This legislation will, at last, allow the GIB to spread its wings even further.
Other benefits of the legislation will be to remove state aid constraints, to speed up the GIB’s ability to make quick and prompt investment decisions and to allow it to invest in new sectors. One of the complaints I heard about the GIB was that it was not able to invest in things like low-carbon transport or storage, the latter of which is particularly important now. This will help widen the GIB’s remit. There is protection in the fact that the Government will retain a minority, but nevertheless important, stake. I would be very concerned if there was a proposal to sell that stake completely. That minority share may not enable the Government to dictate the articles of association or to prevent the bank changing its remit, but it sends a very important signal, particularly to foreign investors, that Her Majesty’s Government have skin in the game in the UK’s low-carbon economy.
The most important element of the whole mission of the GIB when we were considering its creation was to demonstrate, at a time when we faced the prospect of almost unprecedented investment in these novel low-carbon technologies, such as offshore wind, energy from waste and other key elements of a successful low-carbon economy, that we would not leave it to the market alone but would harness the power, ingenuity and capital reserves of the market, with government nevertheless as a partner. I would certainly be very concerned if there were to be a complete selling down to 0% of the government stake. However, that is not what this legislation proposes, nor is it what the Minister has proposed from the Dispatch Box. I take a great deal of comfort from the thoughtful way in which the Minister has explained government strategy here. On balance, having come to these amendments rather sceptical about their intention but having looked carefully at them, I am very pleased to be able to support my noble friend.
Lord Teverson (LD)
My Lords, I will speak to Amendment 70ZA, which is in my name and in this group. Following consideration in Grand Committee, I thank the Minister for all the co-operation that she has given us—as, I am sure, will other Members around the House—and for presenting a number of amendments on reporting, which we welcome completely. However, most of all, although this has been a mixed experience, I thank her for putting me in touch with the Treasury and the Office for National Statistics. I can now start to understand some of the Minister’s frustrations in trying to resolve some of the issues. I say all of that most genuinely.
But I also say that we have good news—or, as it is the first day of advent, perhaps I should say “glad tidings”—for the Minister, for the noble Lord, Lord Smith of Kelvin, and, I think, for the noble Lord, Lord Barker, whom I very much welcome to the House. In the Grand Committee debate on 4 November, as she has today, the Minister rightly threw a challenge back at us. She said that the heart of the problem was that, if we could keep the legislation on the objectives of the bank without prejudicing the bank’s status, we would do so. She rightly threw back a challenge to us to find a way to move forward.
Lord Stevenson of Balmacara
I am sorry to press the noble Baroness but she has to be very clear about this. She needs to say to the House that she will accept an amendment being brought back in one of two cases: either we have an agreed position with her, in which case the Government can bring it forward; or, if that agreement is not forthcoming, we will be permitted to come back with an amendment. Obviously the rules are very tight, and I am looking very closely at the clerk to make sure that this is sufficient for us to be able to continue the debate.
Lord Teverson
While we are going into a sort of dialogue, and without drawing matters to a conclusion at this moment, the only way I can see of moving forward effectively is if Third Reading is postponed to get this matter right. It would be quite difficult to proceed if we did not postpone Third Reading, and I should be interested to know whether that is in the Minister’s remit as far as this discussion is concerned.
Baroness Neville-Rolfe
My Lords, I do not think I can go any further. Of course, I can assert that if we can find something on which we agree, we can bring that back, but I do not think I can commit to anything by Third Reading and, if there is an issue on this aspect, the noble Lord will have to test the opinion of the House.
Lord Teverson
“Objectives of UK Green Investment Bank
(1) Prior to a sale of shares of a UK Green Investment Bank Company (as defined in section (UK Green Investment Bank: transitional provision)(2)) the Secretary of State shall—
(a) ensure that the objects of the UK Green Investment Bank Company contained in its articles of association (“the Objectives”) shall be—(i) the reduction of greenhouse gas emissions;(ii) the advancement of efficiency in the use of natural resources; (iii) the protection or enhancement of the natural environment;(iv) the protection or enhancement of biodiversity;(v) the promotion of environmental sustainability; (b) ensure the articles of association of the UK Green Investment Bank Company require its directors to act and review their actions against the Objectives;(c) create a special share; and(d) establish a company limited by guarantee registered with the Charity Commission (“the Charitable Company”) that will own the special share.(2) Any amendment to the Objectives shall require the consent of the Charitable Company, as holder of the special share.
(3) The special share shall—
(a) have no income or capital rights;(b) have no voting rights except on a vote to amend the Objectives and on a vote to alter the rights of the special share.(4) The rights of the special share shall be deemed altered by the issue of any other special share of the same class.
(5) The Charitable Company that will own the special share shall—
(a) have three members, none of which shall be public bodies;(b) have as initial members legal persons appointed by the Committee on Climate Change established under the Climate Change Act 2008;(c) provide that if any member ceases to be a member the remaining members shall nominate the replacement member;(d) provide that the members will be required to act unanimously in exercising the rights attached to the special share.(6) For the avoidance of doubt, the Committee on Climate Change shall play no role in the conduct of the Charitable Company or its members following the initial appointment of those members prior to the sale of UK Green Investment Bank company shares by the Secretary of State.”
Lord Teverson
My Lords, I thank everyone who has contributed to this debate. I shall be very brief. We seem to have come to a point where we have a solution to everybody’s problem. The Minister has worked very hard, and I really appreciate that, but she was not able to say exactly why this amendment does not fit what we are trying to fix. I have gone through it all, and other people who know far more about the ONS than I do have gone through it all, and it works.
We have come to a point at which we need the GIB to be successful. We need to move it through to privatisation and we need to remove the shackles that it has at the moment. But, exactly as the noble Lord, Lord Barker of Battle, said, we need UK plc to have this body there for the green infrastructure for the long term. The only way we can do that is by using the method that we put forward in this amendment and have discussed in this debate. It is the successful way forward. On that basis, I would like to test the opinion of the House.