The government has announced that the location for the new Green Investment Bank [GIB] will be in Edinburgh and its project finance transaction team will be based in London. What nonsense; the HQ should have been in Brighton.
The GIB will focus on financing green infrastructure and accelerating investment in the UK’s transition to a green economy.
The government has decided on Edinburgh because it is an “established centre for financial services coupled with a thriving green sector”. It goes on to say that it has a substantial pool of financial sector professionals of the kind the GIB will need to undertake a number of aspects of its work.
It justifies London for the operations arm of the £18bn GIB because “large scale and complex project and structured finance transactions will represent the major part of the GIB’s commercial activities. Almost all the other banks and finance providers that will be the GIB’s co-investors in such projects are located in London and . . . . . the GIB could only participate effectively in the necessary negotiations . . . . . . if its major project deal origination and transaction execution team spent considerable time in London.”
Stretching credulity somewhat considering that the HQ and the transaction team will be 535 kilometres apart the government also claims that Edinburgh has “excellent transport and communications links that will enable GIB staff to engage with partner organisations as necessary”.
The journey from London to Edinburgh is four and a half hours by train and seven and a half hours by road. Admittedly you can fly in an hour and a half although that doesn’t include getting to and from the airport at either end and it is difficult to believe that the Green Investment Bank will be promoting air travel as a regular means of transport.
Brighton & Hove [50 minutes from London by rail, Green council administration, Green MP, over 100 environmental businesses] put in a proposal for the location of the GIB but it was rejected along with 29 other bidders including Manchester and Leeds. The reason is given towards the end of the announcement: “The existing strengths of the financial services sector in Edinburgh suggests that it offers the greatest opportunity for a genuine green finance cluster to develop outside London, helping to contribute towards the Government’s goal of rebalancing the UK’s economy” [our italics].
ECONOMIC PARTNERSHIP COMMENT
Business Secretary Vince Cable was adamant that the political need to shore up the union between Scotland and England did not influence the decision but there is no denying that it is a timely reminder to the Scottish populace of the benefits that being part of Great Britain can offer prior to a referendum on independence.
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