13:05 The Secretary of State for Business, Innovation and Skills (Vince Cable)

The UK will be the first country in the world to create a bank dedicated to the greening of the economy. This Government are committed to ensuring that the UK makes a successful transition to a low-carbon economy. This will be a big challenge. The UK is committed by law to a 50% reduction in carbon emissions by 2025. Over the coming decades, much of the UK’s energy, transport and waste infrastructure will have to be revolutionised or even rebuilt in order to achieve the ambition of decarbonised electricity, low-emission cars and an end to landfill. This transition will involve considerable costs, but also considerable benefits if new enterprise can seize the opportunities presented by the green economy. The task for our Government is to ensure that these benefits exceed the costs.

Progress is welcome, but have the Government not already taken a series of decisions that have damaged investment in green technologies and activities? Did they not set feed-in tariffs that encouraged many investors into green energy and then suddenly change the rules, leaving investors high and dry and deeply cynical about the Government’s commitment to green technology? Is the Business Secretary aware that the target for zero-carbon homes by 2016 was encouraging new and innovative business approaches to architecture, building technology, skills training and offset technologies? It was already encouraging a supply chain to make our homes greener. Now that has been changed by the flip-flops of Government decision making. Is it not true that when the Severn barrage was abandoned the Government ruled out any tidal investment for five years, so that when this country turns to tidal power we will end up relying on foreign technology?

As with the green deal and the electricity market reforms, green businesses know enough about the green investment bank to be excited, but not enough to start planning investments and changing business models. Does the Business Secretary not accept that the bank will not work without much greater consistency, certainty and clarity about Government policies for green energy and the low-carbon economy than we have seen to date?

As I said, we are trying to create a stable framework—what is sometimes called a regulatory asset base—against which long-term investment decisions can be made. We have heard several references to the electricity market review and feed-in tariffs. The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), is involved in the process of establishing a clear set of rules. The green investment bank will sit alongside those clear policy frameworks in order to ensure that large-scale investment takes place.

I would hope that throughout the UK there will be real enthusiasm for the announcement that by 2015 there will be £18 billion of investment in green industries. Can the Secretary of State add to that enthusiasm by sharing his vision of what sector of the economy green industries may represent and the number of jobs that that will bring to Britain? In addition, our tidal and wind can be linked with projects such as the European renewable energy project and solar power from the south of Europe, thus transforming the whole of our energy economy.

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