‘(1) The Secretary of State must, within six months of this Bill receiving Royal Assent, report to Parliament with proposals on the ways in which the Green Investment Bank could maximise the take-up of the Green Deal.
(2) The report required by subsection (1) shall include an examination of the extent to which interest rates linked to the repayment of Green Deal loans can be lowered through action taken by the Green Investment Bank, and the impact this may have on consumer demand.’.
This new clause seeks to introduce a reporting requirement on the role of the green investment bank within the green deal. Our position on the financing of the green deal remains that it is primarily a commercial matter, and that companies wishing to deliver the green deal should seek finance from commercial sources. We are not saying that blindly or just from a position of hope, but as a result of strong, detailed and proactive engagement with a wide range of stakeholders, particularly finance and investing institutions in the City, and large corporates with balance sheets that can take such financing.
However, we are aware of the arguments that the GIB could help to catalyse the provision of finance, so we are not blind to the potential role that it could play, however short-term and limited. The nature of that role is by no means clear, and neither is the need for it. There is a view that the green investment bank may be required a little later in the process when the debt is securitised from hundreds of thousands of householders and some liquidity is needed in the early stages of the new bond market. Those are all vague hypotheses.
We are getting strong signals from our detailed engagement with institutions that there is significant commercial appetite at competitive interest rates for green deal financing. We will, however, continue to engage both with companies seeking to be green deal providers and with the finance community to further define whether there could be, in either the short term or the longer term, a need for green investment bank involvement.
My right hon. Friend the Deputy Prime Minister has made it clear that we are open to discussions on the potential role of the green investment bank. It would not be helpful at this stage, however, to be forced into an artificial time scale, six months or otherwise, for making such a determination. Such a reporting requirement could in turn complicate the Government’s discussions with financing institutions. On that basis, we will not be supporting the new clause.