MPs have accused the government of a “deeply regrettable” failure to put in place strong guarantees that the UK’s green investment bank will continue to support renewable energy after its privatisation.
The public accounts committee said it was unclear whether the bank would continue to support the government’s energy policy or climate change goals, because the bank’s new owner is not legally bound to stick to its green aims.
The bank was launched in 2012 to spur investment in renewable energy, energy efficiency and other parts of the “green economy”, but sold by government last year to Australian bank Macquarie for £1.6bn.
The MPs said that ministers and officials had, in their rush to get the bank off the government’s books as quickly as possible, failed to explore whether they could have won stronger green commitments from Macquarie.
In addition, the spending watchdog said the government had sold the bank before assessing its impact, and was unable to say if it had achieved its objectives.
Sir Geoffrey Clifton-Brown, the committee’s deputy chair, said: “The manner in which it was sold off is therefore deeply regrettable. Government did not carry out a full assessment of the bank’s impact before deciding to sell, nor did it secure adequate assurance over the bank’s future role.”
The government established a “special share” to protect the bank’s green goals, but the MPs attacked the government for not pushing Macquarie hard enough for stronger guarantees.
“Macquarie told us that the special share or other commitments it made were not a burden and did not affect the price it was prepared to pay,” said a report by the committee, published on Wednesday.
Furthermore, the MPs said the trustees of the special share had no powers to approve investment decisions or influence the privatised bank’s investment strategy.
The special share arrangement is also contingent on Maquarie continuing to fund the company set up to hold the share, the watchdog added.
Rebecca Long Bailey, Labour’s shadow secretary of state for business, energy and industrial strategy, said: “Selling the Green Investment Bank reveals this government is more interested in making a quick buck from the family silver than in driving innovation in environmental objectives.”
The government defended the sale, saying it had made £186m profit for the taxpayer.
A spokesperson for the Department for Business, Energy and Industrial Strategy said the bank, now known as the Green Investment Group “has made substantial green investments since its sale and plays a key role in the government’s green finance taskforce, as part of our clean growth strategy”.