Green Investment Bank

Debate between Mary Creagh and Nick Hurd

Wednesday 25th January 2017 Westminster Hall

[The Minister for Climate Change and Industry (Mr Nick Hurd)]

It is a great pleasure to serve under your chairmanship, Mr Owen. I sincerely congratulate the hon. Member for Edinburgh West (Michelle Thomson), who represents her constituency in a robustly independent way, on securing the debate. She drew on her clear business experience to frame the debate, set it up in the right way and built on the exchange that we had on the urgent question last week.

However, I must say that when the hon. Lady dismisses commercial confidentiality as a smokescreen, she lapses into political rather than business matters. She knows the reality of the situation, however frustrating that is for the House—and, frankly, for me. I will not be drawn into any discussion about the character or values of any potential preferred bidder, or any of the more sensitive aspects of what is a commercial negotiation that has not concluded. I think she knows that, but let me make that quite clear.

[Mary Creagh]

Will the Minister give way?

[Mr Hurd]

May I make a little more progress?

This has been a good, well informed debate. There is clearly disagreement about whether it is right to sell the GIB, and I respect that, but there is clearly common ground—this is worth restating—that the GIB has been a fantastic success story. In fact, exactly that language has been used by Members on both sides of the House. That success has been achieved in very short order by a relatively small group of people who were given a very challenging mandate. That is genuinely impressive. The Government are therefore keen, as I am sure the House is, to place on the record our appreciation of the work of not just the GIB’s senior management team but everyone who works in that organisation. It is particularly important to show our appreciation for the professional approach of the GIB’s staff, because as those who have been in the commercial world know, these kinds of transactions drag on and create uncertainty and anxiety.

The GIB has been a success story. It was set up to accelerate private investment in green infrastructure. It has a fantastic success record of turning every £1 of public money committed into £3 of matched private sector commitments. It has achieved a series of firsts—not least the first ever offshore wind fund, which has now reached final close having raised more than £1 billion of capital, making it the UK’s largest renewable energy fund. There is also agreement that if we do sell the bank—there is disagreement about that—the Government will be responsible for securing best value for taxpayers and getting a deal that we can justify to the public, whose money has been invested in this institution. It is important that Parliament holds the Government firmly to account for that.

I think something has been missed in this debate. There has been a lot of assertion about the motives of any potential preferred bidder or even the motivations of the Government. There has even been the suggestion that this sale represents a sapping of green ambition on the part of the UK Government, but that could not be further from the truth. I meant what I said on the Floor of the House yesterday.

I will come on to the criteria, which we will be very robust in sticking to when it comes to reviewing any proposal before us. However, one of the things that we are looking at most closely when considering a proposal from a preferred bidder is their forward commitment, not only to people—particularly in Edinburgh, which I hope will reassure the hon. and learned Member for Edinburgh South West (Joanna Cherry), in whose constituency the HQ of the bank is located—and to an ongoing institution with a clear identity in the future, but, critically, to forward investment. That is because hon. Members are right: we need more funding and we need more private capital coming into our green infrastructure. That is obvious; every country needs that.

Part of our starting premise, which has not been reflected in this debate at all, and part of the motive for privatisation, is to confront the reality that the GIB, however successful it has been, is constrained at the moment by the framework in which it operates. I do not think that people get up in the morning thinking, “Thank God I’m working for an instrument of public policy”—I do not think that is quite how people see things—but they are constrained in what they can do by state aid rules and the number of restrictions that come from being a public sector organisation. We feel that this organisation, when liberated from all that, can do more and we want it to do more. We need to be reassured by any future owner that they share that vision, are committed to it and are prepared to back up that commitment. That will not be just the evaluation of Ministers or officials in Government—

--- Later in debate ---

[Mr Hurd]

I will just finish. That is a dimension to this transaction that has been completely absent from this debate, which has been bogged down a bit by a lot of assertion and prejudice about the character and values of a preferred bidder.

[Mary Creagh]

rose—

[Mr Hurd]

The hon. Lady has been very patient; I will give way to her and then I will give way to the hon. Gentleman who represents the Scottish National party, the hon. Member for East Lothian (George Kerevan).

[Mary Creagh]

I thank the Minister for his generosity in giving way and I apologise to colleagues and to you, Mr Owen, for turning up late; I was anxious to listen to the opening speeches in the education debate.

I echo what the Minister has said about the patience of the staff, who have been undergoing this process for 18 months amid considerable uncertainty. Am I right to infer from the point that he has just made about the good will of the potential purchaser that there are potentially some issues around that? Can he say when he became aware of the fact that these various other new companies had been set up by the GIB just before Christmas? There has been a little bit of confusion, with Ministers first saying that they did not know about those new companies and then saying that they had been established to “facilitate the privatisation” of the bank. Is that normal behaviour? It does not strike me as normal at all.

[Mr Hurd]

Regarding the first point, the conversations with the preferred bidder about their future commitment are ongoing. That just reflects the fact that we take that matter very seriously. This is not a case, as I think was suggested, of the Government simply wanting to raise some money, getting the bank off the balance sheet and then off into the hills we go. The issue of the future commitment of any new owner to future investment that will help us to move further and faster along in the transition to the low-carbon economy—a transition that is central to the industrial strategy—is a very important part of the consideration of the bid. That is why, working through Lord Smith and the board, we are taking time to look each other in the eye and say, “Is this enough?” That is the situation we are in.

On restructuring, I think I was pretty clear when answering the last parliamentary question. We agreed some reorganisation in partnership with the GIB to facilitate private capital into certain assets. I make the point—which, again, is a point of principle and needs to be asserted—that there was almost a suggestion during the urgent question debate that the GIB should somehow not be free to sell anything or to bring in private capital. That is completely wrong, particularly when the evidence is that there are buyers for assets that are reaching some maturity. Given what the GIB was set up to do, I do not think that it should be in the business of competing with private capital to invest in assets. It serves no policy purpose to hold on to assets that are valuable to others if that money can be recycled into new investments. That is the critical thing.

Lots of assertions have been made about asset stripping. The Government have no interest in selling to an asset stripper. We want to know about investment in the future; it is okay to sell, so long as there is a commitment to reinvest in future. The GIB portfolio—under any ownership, including public ownership—should not be preserved in aspic forever. It has to be a dynamic organisation, and it should be free to realise capital from packaging assets and to do things that a nimble entrepreneurial organisation, which is what it is, should be free to do.

Green Investment Bank

Debate between Mary Creagh and Nick Hurd

Wednesday 11th January 2017 Commons Chamber

[Mr Hurd]

My hon. Friend has made—much more eloquently than I have so far succeeded in doing—exactly the fundamental point that we are trying to convey. The test of an organisation that was set up to correct a market failure is whether that failure has indeed been corrected. We believe that it has, and our view is supported by the large amounts of private sector investment that are flowing into green infrastructure in the United Kingdom and around the world. What we must do now is ensure that the GIB is free and unfettered by the state, so that it can do more.

[Mary Creagh (Wakefield) (Lab)]

The Environmental Audit Committee’s report on the sale of the bank stated that Ministers had rushed to privatise it without consultation or proper consideration of the alternatives, and that either it should continue to exist as a low-carbon investor or its sale should not proceed. Taxpayers do not want a repeat of the Royal Mail debacle, when a public asset was sold off at £1.4 billion below its true value, and they do not want this landmark British institution to be sold off to an asset stripper.

Is it not extraordinary that the bank’s assets were restructured in November? Can the Minister tell us whether that was done at the request of the UK Shareholder Executive, to facilitate its sale to the preferred bidder?

[Mr Hurd]

I do not believe that that was the case at all, although I understand the points that the hon. Lady has made. Like any other Government, we have a responsibility to deliver value for money to taxpayers, and we are very conscious of the need for this deal, if it materialises, to present itself well to the public whom we serve and represent. That is why, as one would expect, value for money is at the top of our list of criteria. We are embarking on a very good process, and we are setting ourselves very high standards for the presentation of the deal.

Zika Virus

Debate between Mary Creagh and Nick Hurd

Tuesday 2nd February 2016 Commons Chamber

[Mr Hurd]

My hon. Friend is entirely right. Concerns were expressed on the Floor of the House about the capacity of the WHO and the pace of its response to the Ebola situation. My right hon. Friend the Secretary of State has made it clear that the UK, as the second-largest donor, is far from complacent about the need for reform, including monitoring reform. The chief scientific adviser and colleagues at the Department of Health are working together closely to ensure that the WHO is up to the mark, and colleagues will note that the latter has moved more quickly this time. We are in regular dialogue with it to ensure that its systems are as agile and responsive as they can be.

[Mary Creagh (Wakefield) (Lab)]

It is predicted that 16,000 children will be affected by microcephaly this year in Latin America, so the world’s community is in a race against time with this horrible virus. Last week, the Chancellor announced funding of £500 million a year to the Ross Fund at Liverpool University to fight malaria. Compared with that, the announcement of £400,000 for Glasgow, which the Minister has just mentioned, pales into insignificance. Through him, may I urge the Prime Minister and the Chancellor to consider all resources to tackle the outbreak of this virus, for which there is no test, cure or vaccine? Any vaccine would require the application of careful moral and ethical standards to its testing on pregnant women, but it is necessary to save a generation of women and their children from disability and poverty.

[Mr Hurd]

The hon. Lady is entirely right. I thank her for reminding the House of the Chancellor’s major commitment to fighting malaria. The Government’s commitments to the Ross Fund and the UK vaccines network make it clear that we stand ready to play a leading role in the development of a vaccination, though it would take time to come through. In the short term, however, I would not lose sight of the sensible steps we can take to educate people about how to mitigate the risk to themselves—by reviewing their travel plans and seeking medical advice before a journey—and to make the medical system in this country better informed about the risks.

Oral Answers to Questions

Debate between Mary Creagh and Nick Hurd

Wednesday 16th December 2015 Commons Chamber

[Mr Hurd]

As my hon. Friend will know, that issue is enormously important to the Department and the Secretary of State. Inclusive growth and support for women and girls as part of economic development is a central pillar of our strategic framework for the future. We expect our support over the next seven years to help to mobilise finance for more than 200,000 SMEs, at least a quarter of which will be headed by women.

[Mary Creagh (Wakefield) (Lab)]

Small businesses in Rwanda and Burundi face credit costs of up to 20%. I know that DFID’s TradeMark East Africa project is trying to deal with that, but small businesses in Burundi now face an upsurge in ethnic violence, with foreign fighters coming in from Rwanda. May I urge the Minister, as he undertakes the bilateral aid review, to look again at our decision to leave Burundi in 2011 and to look carefully at the potential need to go back in there and have a presence on the ground?

[Mr Hurd]

I share the hon. Lady’s concern about the situation. We do not have a bilateral programme there, but we do a lot in terms of humanitarian support. I take on board fully her remark about the costs of capital to small organisations. I refer to my earlier answer: technology can help us to reduce such costs.