green investment bank

Jim Pickard

The coalition’s promise to be the “greenest government ever” is now rather under strain after environmental groups reacted with hostility to Wednesday’s Budget – given that it provided tax relief for motorists and air passengers.

I was surprised that George Osborne, the chancellor, repeated his regular claim that the government would raise the proportion of green taxes on individuals.

Yet this is still a realistic ambition, according to the Institute of Fiscal Studies in its Budget analysis yesterday.

Having said that, the IFS said that while the target was “still on course”, the Budget had put progress back by cutting fuel duty by the equivalent of £2bn a year.

Green groups, which welcomed the commitment of £3bn of capital towards the Green Investment Bank, were disappointed that the

 Read more

Jim Pickard

My colleague Fiona Harvey revealed in October that plans for a green investment bank could be watered down under pressure from the Treasury.

A commission set up by George Osborne to look at the issue – led by Bob Wigley, the former European head of Merrill Lynch – had called for the bank to have powers to raise finance from the private sector, for instance by issuing bonds, green Isas, raising loans and other measures. But this was opposed by Treasury officials, according to Fiona:

They would prefer the bank to operate as a simpler fund, dispensing grants and loans in conjunction with the private sector but without the powers to generate its own self-sustaining financing mechanisms.

And in today’s Guardian Chris Huhne confirms that the bank will start life in the more limited form.

 Read more