Vince Cable hints at green investment bank model

The government is likely to put the money loaned by the proposed Green Investment Bank on the government’s accounts, according to business secretary Vince Cable.

Cable, speaking at a fringe event of the Liberal Democrat party conference in Liverpool, said the government was examining a range of options in setting up the proposed body.

There has been speculation that Coalition chancellor George Osborne was planning to make the bank wholly private funded, thereby taking the lending off the government’s balance sheet, and stopping it from adding to UK’s spiralling public debt.

However Cable said that while all options had been considered, ministers were now leaning towards an on-balance sheet body. It is significant because it means money will have to be found for the body from the government’s increadibly tight spending review. 

He said: “We’ve been discussing models. Obviously at one extreme you could have a wholly private bank, with a wholly public bank at the other extreme – and we’ve been weighing options.

“It looks like it’ll end up being an institution on the public balance sheet which will leverage private funding. However, where the money comes from is another question.”

Cable, who was speaking at an event organised by the Institution of Civil Engineers to discusss funding UK infrastructure, said it wasn’t clear that a wholly private bank would bring any new money to the table.

Under previous Labour plans, a £2bn fund was to be set up with money from the selling off of mature infrastructure assets, such as the Channel Tunnel Rail Link. The Coalition has so far not said where the money will come from, and Cable’s words suggest no final decision has yet been taken.