‘Green Tories’ express dismay at plans to put one of the Conservative party’s few key environmental acheivements up for part-privatisation

Senior “green Tories” – Conservative supporters who want the party to act on environmental issues – have attacked the government’s decision to sell a majority stake in the Green Investment Bank (GIB).



Bright Blue, an influential thinktank focused on the Conservative party and numbering senior Tories among its backers, said the sell-off was “the last thing we need” and criticised the move as putting public sector capital in competition with the private sector.



Ben Goldsmith, brother of MP Zac Goldsmith and chairman of the Conservative Environment Network, which numbers prominent Tory supporters and MPs among its members, also blasted the privatisation. He said: “The Green Investment Bank was one of the Coalition government’s few great, green achievements. Why the new Conservative government is considering undoing that achievement by privatising this exciting new institution is beyond me. Let’s hope they see sense.”

The announcement of the sale of “at least a majority stake” in the GIB came as a surprise to many, as the bank was one of the key green policies trumpeted by the coalition – and many campaigners argued that it was one of the only such policies to be successful. The bank uses public sector capital to invest in projects such as renewable energy and making houses and infrastructure more energy efficient.

Ben Caldecott, associate fellow of Bright Blue, said: “I admire the UK Green Investment Bank and what it has achieved so far, but the last thing we need is a publicly supported, but privately owned, asset manager using subsidised capital and jobs to compete with the private sector.”

In contrast, the GIB in its current form, as a fully publicly-backed institution, could be more powerful in attracting public and private capital for key investments, he said. “A majority publicly-owned institution can work in the public interest to catalyse new private investment and be truly additional, by helping the private sector to reduce the cost of capital for important projects that can deal with our national productivity crisis.”

Facebook Twitter Pinterest Secretary of State for business Sajid Javid Photograph: ANDREW COWIE/AFP/Getty Images

The government said the money raised from the privatisation would help pay down the deficit. Sajid Javid, the business secretary, defended the move publicly in a speech on Thursday, insisting that the board and managers of the bank “fully support” the sale. He said: “The Green Investment Bank provides us with a model of that rarest of things: a government successfully involving itself in the markets. Now, after less than three years, the investment has been paid back, with interest, and we’ve helped create a market that can stand up on its own two feet. The Green Investment Bank has grown up. It’s time to let it go.”

Green campaigners were scathing in their response to the sell-off, and Caroline Lucas, the Green Party MP, and LibDem Tim Farron also blasted it. They said it would do nothing to encourage investment in the green economy, and could put such investment in jeopardy. But criticism from within his own ranks will sting David Cameron more than that from opposition politicians and environmental charities.

Bright Blue describes itself as a “thinktank and pressure group for liberal Conservatism” and is chaired by Matthew d’Ancona, a leading Tory thinker. It includes among its board and advisors Matthew Parris, the former Tory MP turned Times columnist, and Rachel Johnson, sister of Boris and Jo Johnson. Its advisory board lists the senior ministers and MPs Maria Miller, Francis Maude, Damian Green, Nicky Morgan, Nick Boles and Andrew Mitchell among its members.

The front page of the group’s web site carries an approving quote from Sajid Javid, praising its work.

Facebook Twitter Pinterest Ben Caldecott, associate fellow of Bright Blue. Photograph: Sam Friedrich for The Guardian

Caldecott, who has a background in private sector green banking at Climate Change Capital, was formerly an advisor to the UK Green Investment Bank commission.

The GIB was launched in 2012 with £3.8bn of public sector money on investments including wind farms, biomass and energy efficiency projects. The idea behind it was that private sector bankers have often been unwilling to invest in green projects, such as making social housing more energy efficient, because of their high up-front costs, low profit margins and slow return on investment. Creating a publicly-backed bank was supposed to solve that problem, and give the private sector the confidence to co-invest in projects because a publicly-backed institution would be under-writing the investments.

The GIB became profitable last year, and was seeking the right to raise money from the private sector to expand its investment portfolio, and make a profit for the taxpayer. The sell-off marks the exact reverse of that policy, as it will mean private sector companies will control the entire portfolio and all future investments.