If we cannot make money out of saving the planet then it is not going to be saved. The business of saving the environment has to be our business and it has to be a commercial enterprise or it will mean nothing to many.
My Lords, I want to focus on Part 1 of the Bill concerning the Green Investment Bank. The Americans have a polite expression that denotes deep scepticism. The phrase is “horse feathers” and it may replace a less polite phrase of which your Lordships might officially disapprove. I come to this issue as someone who has been involved in finding and making common ground between the Government and social action as we have attempted to apply business principles to challenging social issues. I am aware that there is a lot of equine plumage around. I hope not too much in our case.
My record and that of my colleagues has been founded on taking a different approach. The result has invariably been less talk, more action and more money in the bank for everyone, including the most disadvantaged in our society. I recognise a familiar danger in all our talk of global warming and climate change. There are many out there who would sceptically use “horse feathers” to describe it. Such scepticism is serious but there is one horse that is totally featherless and I want encourage your Lordships to think of it as a runner, although perhaps not a dead cert.
If we cannot make money out of saving the planet then it is not going to be saved. The business of saving the environment has to be our business and it has to be a commercial enterprise or it will mean nothing to many. We are in danger of running scared at the awful vision that researchers, scientists and climate change experts confront us with daily. We are tempted to pour our money on to catastrophes in some kind of ritual gesture in the sad hope that this will absolve us of responsibility and they will disappear.
However, there is an alternative, practical solution. A host of companies is already making the running. The horse feather merchants have long disappeared. Among the survivors is one very interesting firm called Solarcentury. Its chairman is Jeremy Leggett. He is an ex-
Solarcentury began with domestic installations and this now numbers 9,000. It has recently begun much more ambitious commercial schemes such as on the Co-
These are one company’s achievements. The approach of this and many other companies is to be both creative and sustainable. We need to be creative. We need to make changes in directions that now seem unimaginable. These firms are in the business of imagining the future. That future needs to be sustainable; we must use the vast resources of the market to find out who is doing what, how well they are doing it and, above all, at what price. In the area of solar power there are many firms doing good business or going broke on our behalf. They are finding out what does and does not work.
Somewhere in the background I hear somebody growl, “subsidy”. There is no such thing as an absolutely free lunch, but this one is as free as makes no difference. The companies find what works for us and are making it happen. If it does not work, then they go bust.
My final point is best illustrated by a story; apologies to those who have heard it many times before. A man in New Jersey spent his days raising money to spend on gambling. The game was bent. A friend said to him, “Why do you do this? The game is rigged.” The gambler replied, “I have to do it. It’s the only game in town.”
However, this is not the only game in town. Thousands of firms worldwide are pursuing the challenge of climate change. For example, the recent environmental conference in Rio de Janeiro was described as a damp squib: the usual shed load of talk followed by no action because there was no public money available. But 1,500 business people turned up; whereas, previously, almost nobody from the commercial sector had bothered. According to New Scientist,
“some 1500 business leaders had attended the summit, and had stumped up half a trillion dollars of corporate cash to fund various UN agendas … Among the new corporate actors at the heart of UN policymaking on the green agenda is Chad Holliday, chairman of the Bank of America and former president of DuPont. He is now also co-
My intention has emphatically not been to argue about climate change figures. It has been to show that business people of some importance have made a serious commitment to the climate change challenge. In the case of Jeremy Leggett of Solarcentury, that commitment has been radical. In the case of Chad Holliday, the head of the Bank of America, the change is conventional but significant.
Climate change is an idea whose time has come. The Government should take the courage to act in good faith. So if the proposed UK Green Investment Bank is to play a role in all of this what should it be looking out for? First, the Government need to be clear from the outset with this bank and must not keep changing the goal posts. Continuity is the name of the game, and businesses soon lose interest if they doubt your credibility and commitment: game over. Secondly, do not try to oversell it. If the terms are not better than those commercially available, do not pretend that they are: get real.
Thirdly, this bank needs to be run by practical people. We can set up whatever legislation we want, but the bottom line will lie with the individual who is in charge of this bank. Practical people are not yes men. If an idea does not work, they are not afraid of changing the design. Do not make the mistake that is so often made by government and invest in spin: in someone who looks and sounds good to the media. Get an awkward customer, who can bend this bank into reality and make it credible. That is my advice.
Fourthly, what is going to be the attitude to risk of this bank? Will this Green Investment Bank be encouraged to take risks and back business entrepreneurs and social entrepreneurs? What will be its policy on SMEs? Will innovation be smothered because an SME lacks a strong asset base? Can the Minister tell us in his summing up what is to be the attitude of this bank to failure and risk? If we are not planning for failure, we will not be taking risks. Fifthly, is this fund going to be run by entrepreneurs who understand green energy, or by banks that understand liquidity and protecting capital? Actually, both are needed but can the Minister tell us who will call the shots?
I could draw an analogy with housing. We now have so many constraints on housing. Houses need to be very energy efficient, include renewable energy, pay Section 106 contributions, have lots of parking-
Some of us in life are tasked with doing. We sometimes wonder whether the real purpose of government is an existential experiment: are you in the business to discover whether the number of hoops that a project has to jump through before it can start is finite or is it, in fact, truly infinite? We in your Lordships’ House, I suspect, sometimes unwittingly add to this number ourselves. Will the Minister please tell the House how many hoops will be embedded into the operation of this bank? How will he ensure that they do not grow exponentially? If this green debate is for real, then we must get intensely practical. This bank now has to put its money where its mouth is.