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The Government Must Not Sell Off The Green Investment Bank Until It Ensures Its Success Will Not Be Scuppered

12/01/2017 16:08 GMT | Updated 12/01/2017 16:11 GMT
PAUL ELLIS via Getty Images

Yesterday in the House of Commons I aired my concern for the Conservatives credibility on the environment, given their intention to push on with privatising the Green Investment Bank despite cross-party opposition. We saw a great many questions from MPs of all colours who were left wondering why the government was pushing through with their sale of the Green Investment Bank.

The GIB is a Great British success story. Publicly-owned, it has funded innovative new smart green technology to fight climate change and create exportable opportunities as demand for grows for low carbon technology of the future. Not only this, it's been making a strong return for the taxpayer.

As part of their austerity agenda the Conservatives have opted to sell this profit-making institution. They say it will be able to perform its functions better as a private entity. Whilst I strongly disagree, that's their position.

They're being naïve, however, if they don't act upon Macquarie Bank's long track record of asset stripping, laid bare by research from the think tank E3G.

During the time Macquarie owned Thames Water £1.2billion in profit was extracted from the utility company, which has 'crippled' it with dept. The M6 toll was purchased, again for a limited period, during which a £620million debt was controversially refinanced to £1billion, before Macquarie paid itself a £392million dividend and sold the motorway. They also purchased Airwave, the communications network used by our fire and police services, which took out loans from other Macquarie subsidiaries at a high interest rate and gave themselves a dividend, but paid no corporation tax. And so on.

Stripping the assets of British infrastructure is clearly lucrative, but it cannot continue. That's why today Labour are calling on the government to stop the sale of the GIB until its assets can be made safe, its green credentials protected and its long term value creation preserved.

With the Liberal Democrats writing to ministers, SNP MPs asking probing questions in Select Committees and today's urgent question from the Greens, the government is facing a united opposition. Members of their own party have also spoken out. with Lord Barker and the Conservative MP Peter Aldus calling for a halt on the sale. Theresa May could choose to push ahead, but if the GIB is stripped of its assets and left with debts then it's on her.

Her ministers too seem to have not entirely grasped the reality of the situation, with Conservative minister Nick Hurd arguing contradictory positions at the recent BEIS select committee.

Firstly, Mr Hurd was at pains to highlight the market opportunities embedded in the Paris Agreement, through which nearly every country on earth has agreed to decarbonise their economy, and that Britain should be able to sell them the technology to do so. Overcoming the ongoing challenge of investment in innovative new low carbon technology is precisely the market failure the GIB was invented to address.

Then, in a tense exchange with the Scottish MP whose constituency includes the GIB, Nick Hurd stated that "arguably that market failure has been corrected", despite the opportunities he had just outlined. This unfortunate occurrence suggests muddled thinking at the centre of government - further evidence that the brakes should be applied to prevent short-term private profit scuppering long-term value for the public.

Despite the Tories hiding behind commercial sensitivity, their preferred buyer being the Australian Macquarie Bank is a well known fact. The imminent sale of the GIB to this firm, labelled as an asset stripper, is so troubling that not only are urgent questions being raised but there is strong cross-party support to pause the sale. We stand to lose an institution with a proven record of fighting climate change, enabling green innovation and creating a return for the taxpayer. If the government doesn't act we may lose this public institution to what some have called "the Vampire Kangaroo".

Clive Lewis is the Shadow Secretary for Business, Energy and Industrial Strategy, and Labour MP for Norwich South