| Tory Conference: Labour left 'ghastly legacy' over Armed Forces, says Liam Fox Defence has launched a blistering attack on the legacy left by Labour's stewardship of the Armed Forces. telegraph.co.uk |
Treasury locked in battle over green investment bank Whitehall negotiations over scope and remit of the proposed bank become tense as decision is expected by FridayThe Treasury is locked in battle with environmentalists across the government over the scope and remit of a proposed new bank on which the UK's transition to a low-carbon economy by 2025 could rest.A green investment bank (GIB) is being pushed for to turn the £50-80bn of traditional project capital available into the much higher amounts funding experts say will be needed to pay for the low-carbon technologies the UK is expected to need. But Whitehall negotiations for its establishment have become tense and are said to have entered their last few days, with the decision expected by many to be made by Friday. Though no announcement will be made in the comprehensive spending review, government officials want some progress to be announced as part of a sequence of positive developments to manage the government's emergence from next Wednesday's heavy day of public spending cuts.Officials and politicians in the department for energy and climate change as well as the business department and the cabinet office are fighting for the GIB to be a bank with the ability to raise bonds and given £4-6bn of upfront capital which experts say could see it able to raise at least £100bn. Its supporters also want it be established by legislation.Instead the Treasury are said to want it to remain as a fund, kickstarted by £2bn, without the ability to raise bonds and not established by legislation.The energy and climate change secretary, Chris Huhne, and the climate change minister, Greg Barker, have taken the lead in intense negotiations with the Treasury and have been backed up by the cabinet secretary, Oliver Letwin, receiving some assistance from the business secretary, Vince Cable. But Cable's support is qualified – he would like the GIB to be a bank supporting general infrastructure projects, not just low-carbon infrastructure. Those close to the disagreement say they expect number 10 will eventually be called on to adjudicate the dispute.Today a report by Ernst & Young supported those championing a green investment bank showing for the first time that only a fully capitalised bank would plug the UK's low-carbon funding cap.They estimate the funding necessary for low-carbon technologies to be slightly down from the estimate made by a Tory-commissioned report in June when £550bn was called for to invest in power and gas infrastructure, renewable heat and gas technologies and energy efficiency measures. Today Ernst & Young said it would be about £450bn.But with only £50-80bn of capital available from the traditional streams of project finance and infrastructure funds, Ernst & Young concluded the GIB would be essential to cover the shortfall.The report found that offshore wind generation, carbon capture and storage and energy efficiency measures which suffer from a shortage of capital but could significantly lower the UK's emissions, would be funded by the GIB."A number of properly targeted financial products tailored to each sub-sector could mitigate these investment barriers more efficiently than on a single project by project basis. These structured products could be provided by a GIB," Ben Warren of Ernst & Young said.The report said that the forthcoming spending review on 20 October is a good time to deliver a GIB which is backed by between £4-6bn of capital until 2015.Green economyCarbon emissionsClimate changeGreen politicsAllegra Strattonguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds guardian.co.uk |
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