The Green Investment Bank (GIB) must not be privatised unless its environmental objectives are protected and strengthened, a cross-party group of MPs has said.
Publishing its report on the future of the GIB, the parliamentary environmental audit committee said the decision to privatise the bank appeared rushed and claimed ministers have not provided convincing evidence the bank will achieve its aims better in the private sector.
The MPs criticised the lack of transparency shown by the government in its decision to privatise the GIB and called for the publication by the business department of the business case for the sale, including impact assessments, before proceeding.
"The government is currently relying on assurances from potential shareholders and the commercial case for retaining the GIB's green purposes. That is not robust enough," said Huw Irranca-Davies, chair of the committee.
The MPs are concerned that a privatised bank could move its focus away from novel and complex projects that struggle to find funding in favour of easier, more commercial projects. They are also worried that a privatised GIB could invest in areas that may damage its reputation and undermine its leadership in the green economy.
The government should also provide an evaluation of whether a phased approach involving alternative options for the recapitalization of the bank would be possible. The MPs said this would allow for greater consultation, transparency and market testing on the form of any eventual privatisation.
If the sale does go ahead, the government should retain a minority stake in it to demonstrate its commitment to the green economy, the committee said. If the GIB is not privatised, it should be granted borrowing powers, it added.
The environmental audit committee also announced a new inquiry into the role of the Treasury in sustainability. Two key questions it is asking are:
- Is the Treasury playing a constructive role in development and implementation of government policies to protect the environment and respond to climate change?
- Is it taking adequate account of long-term environmental factors when analysing budgets?
The committee also wants to assess the Treasury's understanding of the relationship between environment policy and growth, and to what extent it has evaluated the business case for increasing investment in environment and low-carbon goods and services in the UK.
All evidence should be submitted to the committee by 18 February 2016.
Several other select committee reports were published last week as parliament rose for recess. These include:
- The environment, food and rural affairs committee said in a report that the environment department (Defra) needed to ensure it had robust policies and adequately funded programmes to tackle air and water pollution. Defra needs to minimise the risk of huge fines from the EU, which would remove money from delivery of services, it said. Incurring large fines at a time of reduced budgets is "completely unacceptable", the committee said, adding that it had received "only the barest details" from Defra as to how it would continue to provide services given the 15% budget cuts it faces over the next four years.
- The House of Lords EU committee published a report on EU energy governance. It recommended the introduction of a monitoring and enforcement mechanism to ensure that the EU's renewable energy target for 2030 is met and that effort is shared equitably between member states. It added that the UK government needed to be clearer about its own long-term renewable energy strategy to provide confidence to investors.
- The energy and climate change committee published a report on its priorities for 2015-20. The committee said it wants to influence the government's long-term approach to meeting climate targets, which includes international action following the Paris agreement and delivering a robust fifth carbon budget and associated carbon plan. Next year's work will focus on the UK's climate change targets and scrutiny of the government's approach to decarbonising heat and transport.
