ACE says borrowing powers should not be linked to fall in public sector debt.
The impact of Britain’s failure to eliminate its public sector deficit on the Green Investment Bank’s borrowing powers has not yet been addressed, commented Nelson Ogunshakin OBE, chief executive of ACE.
It was previously announced that the Green Investment Bank would gain borrowing powers in 2015-16, he said, but this power was made dependent on public borrowing falling as a percentage of GDP, which the OBR expects not to happen until 2016-17.
“While the Government is keen to reassert its commitment to its deficit reduction, the rules for the Green Investment Bank’s borrowing powers may hurt investor confidence and make it difficult for industry to plan for investment,” said Dr Ogunshakin.
“By linking the new bank’s borrowing powers to a target that government may not be able to hit, industry is unable to plan with any certainty for those borrowing powers to come into force.
“Government should change the rule and fix the date on which the Green Investment Bank can start to borrow so as to provide certainty for industry as it plans to deliver growth through infrastructure investment.”