Yorkshire loses out as green investment bank goes to Scotland

Business Secretary Vince Cable said the headquarters will be in Edinburgh, with the main transaction team in London.

“Harnessing the strengths of Edinburgh and London will support the Green Investment Bank’s ambition to become a world leader.

“Edinburgh has a thriving green sector and respected expertise in areas such as asset management. London, as the world’s leading financial centre, will ensure that the GIB’s transaction team can hit the ground running.

“This decision will allow the GIB to operate effectively and achieve its mission of mobilising the additional investment needed to accelerate the UK’s transition to a green economy,” said the minister.

Leeds, Hull and Sheffield had all lodged bids to host the bank, which is designed to accelerate private sector investment in “green” projects and is expected to employ 50-70 full-time staff.

Scottish Secretary Michael Moore welcomed the news, saying: “I am delighted that the Green Investment Bank will be headquartered in Edinburgh.

“Scotland has enormous green energy potential and its capital is the UK’s second biggest financial centre.”

The Government said offshore wind power generation, commercial and industrial waste processing and recycling, energy from waste generation, non-domestic energy efficiency and support for the Green Deal will be the first priority sectors for the GIB, subject to approval by the European Commission.

The Business Department said an estimated investment of up to £200 billion in the energy system alone is needed over the period to 2020, adding that the new bank will be “uniquely placed” to facilitate the transition to a green economy base by addressing the market failures affecting green infrastructure projects, which have led to “significant under-investment”.

The Government said it will invest in green infrastructure projects from April focusing on the GIB’s priority sectors, ahead of obtaining state aid approval for the GIB.

Wales’s Business and Enterprise Minister Edwina Hart said: “We’re very disappointed that the robust bid we made to the UK Government to base the Green Investment Bank with 50 to 70 jobs in Cardiff has been unsuccessful.

“There is a much bigger job opportunity arising for business in Wales to help administer the Green Deal. This will involve the provision of millions of green loans for energy-saving technologies to private individuals in the UK. There are a number of Welsh based companies which have been alerted and are well placed to support this planned initiative.”

Ed Matthew, director of Transform UK, the group that founded the original campaign to create the Green Investment Bank, said: “Scotland is a powerhouse for low carbon development and Edinburgh has fought with passion and determination to be the home to the Green Investment Bank from the start.

“But the most important decision is still to come. Will George Osborne announce in the Budget that he will lift the crippling constraint that the GIB cannot borrow until the next Parliament?

“If the Green Investment Bank can’t borrow, it is not a bank and will fail to fulfil its potential to reboot the UK economy and repower our energy system at the scale and speed required. If the Chancellor is serious about delivering a Budget for growth, he must lift the borrowing constraint now.”

Mark Lazarowicz, Labour MP for Edinburgh North and Leith, who spearheaded Labour’s campaign to bring the bank to Edinburgh, said: “This is a victory for Edinburgh and a victory for common sense. Edinburgh is the perfect city for the Green Investment Bank, being close to renewable sites and with a centuries-old tradition of banking.

“This shows what we can do when we work together. Being part of the UK allows Scotland to win investment we would be less likely to if we were separate. This means the renewables revolution can start at home.”

Edinburgh’s Liberal Democrat MP Mike Crockart said: “The Business Secretary has today made the right decision and made it for the right reasons.

“For the past 16 months I have been arguing that Edinburgh is the best choice for the location of the Green Investment Bank because of its strength in depth in both financial services and green technology. It is this co-location that will make the bank a success and make Edinburgh a European centre of excellence for green investment.”

Friends of the Earth’s economics campaigner, David Powell, said: “Choosing the HQ for the Green Investment Bank has been like arguing about where to put the cherry on a half-baked cake.

“This is great news for Edinburgh, but George Osborne’s inadequate support means it will start life as a lame duck.

“A flourishing Green Investment Bank is vital to unlock the huge potential of clean British energy and create thousands of new jobs.

“The Chancellor’s Budget must free the bank from his vice-like grip by allowing it to borrow and lend from the markets from day one.”

Asked whether the question of the proposed referendum on independence for Scotland played a part in the decision on the bank’s location, Prime Minister David Cameron’s official spokesman said: “There was a process to decide where we should locate the Green Investment Bank. London and Edinburgh were the two strongest contenders.

“Edinburgh has a thriving green sector and expertise in asset management. London is the world’s leading financial centre. So we are bringing together those two locations.

“On the issue of independence, we have got a clear position. The UK Government believes that Scotland and the rest of the UK are stronger together and we will be arguing the case for Scotland to remain part of the Union.”