EDINBURGH could lose the headquarters of the Green Investment Bank to Hong Kong or Shanghai under the UK government’s sell-off plans, the SNP has warned.
The Capital was named the base for the new institution – established to kick-start pioneering green projects considered too risky by the markets – after a hard-fought cross-party campaign. But controversial Conservative plans to privatise the bank have raised fears that its purpose and location are both now in doubt.
East Lothian SNP MP and economics expert George Kerevan has claimed the move into private ownership could see the bank shift from environmentally friendly investments to funding nuclear power and fracking and moving its base out of Edinburgh.
Since its creation three years ago the bank has committed more than £2 billion to 55 green projects and pulled in £6bn of additional private investment. It has also returned its first annual profit.
But the government has introduced an amendment to legislation currently before the House of Lords, to repeal the statutory provisions forcing the bank to fulfil a green remit.
In a debate at Westminster, Mr Kerevan said: “If we remove the legal protection, the headquarters will become a nameplate in Edinburgh and, down the line, it will cease to be in Edinburgh.
“Indeed, if the Asian Infrastructure Investment Bank is successful, the Green Investment Bank may end up in Hong Kong or Shanghai.”
Mr Kerevan said the bank had been set up in 2012 as a public institution to tackle market failures in relation to the green economy and had proved very successful.
“In the hands of risk-averse private shareholders, the bank will certainly be forced to reduce its commitments to green infrastructure projects, he said. The sell-off plans also came under fire from Tory backbencher Graham Stuart, who said he was not against privatisation in general, but the GIB was a special case and serious questions had to be answered.
He said: “What has changed so that such a bank can now be transferred to the private sector without ending up simply acting like and emulating all the other banks?
“How do we know that it will continue to play this unique role?”
Replying to the debate, junior business minister George Freeman told MPs it was for the bank to make sure it was in the right location.
“We originally put it in Edinburgh because Edinburgh is a great centre of finance. It is one of the great capital centres of the UK and has a great history of green energy investment.”
He said there was “a very strong prospect” of the bank remaining in Edinburgh so long as the status of the UK was secure.
Finance Secretary John Swinney has suggested the Scottish Government could block the privatisation plans.