Budget 'boosts city's claim as home of UK green bank'

Published on Wednesday 23 March 2011 18:29

EDINBURGH'S chances of becoming the home of the UK's Green Investment Bank have been boosted by the decision to increase its resources and powers, a city MP has claimed.

Chancellor George Osborne announced in yesterday's Budget that the new bank will be launched next year, and will have 3 billion to promote green investment - treble the original sum proposed.

Environment campaigners, however, were disappointed the bank will not be granted the power to borrow until 2015.

Edinburgh West Liberal Democrat MP Mike Crockart acknowledged it would have been better to have a fully functioning bank from the start, but insisted the announcement was still "fantastic" news.

He said: "A bigger, better-funded bank with full borrowing facilities will require a home that has the financial expertise to match.

"Apart from the City of London, Edinburgh is now the only other possible location with the financial clout to match the bank's structure.

"The Budget statement only advances Edinburgh's case to host the bank."

Edinburgh North & Leith Labour MP Mark Lazarowicz said: "It's good to see the earlier start, but the fact it will only be a lending institution rather than a fully-fledged bank from the beginning is concerning."

The Chancellor said the bank would support low-carbon development where the returns were too long-term or too risky for the market to invest. He said it would lever in 15bn of private sector investment during the life of the parliament.

Scottish Government Finance Minister John Swinney said Scotland was the logical home for the bank but criticised the Budget as a major missed opportunity for the Chancellor to reverse his swingeing cuts in capital spending.

Scottish Labour leader Iain Gray hit out at Mr Osborne for bringing forward a "no-growth Budget" that failed to address Scottish jobs and said the 1p a litre cut in fuel tax would not make up for the 3p per litre being added in VAT.

Edinburgh Chamber of Commerce gave a cautious welcome to the Budget, in particular the cut in fuel duty; the further cut of 1p in corporation tax for next year, and action to cut red tape for small businesses. But Graham Birse, the chamber's managing director, said: "There has to be something of a worry over the tax increases on banks and oil companies to pay for this."

Unison attacked the decision to cut corporation tax rather than safeguarding public services. The union's Scottish secretary Mike Kirby said: "By passing up the chance to scale back savage public spending cuts, the Tories are condemning the economy to long-term low growth and high unemployment."

PRICE ISN'T RIGHT

FORMER Chancellor Alistair Darling has delivered a critical verdict on his successor's package.

The Edinburgh South West Labour MP said: "For the third time in ten months George Osborne has cut his growth forecast and that means more people are going to lose their jobs and we have to borrow more because we are paying out more in unemployment and getting less in taxes."

He added that postponing the fuel duty increase would help motorists, but warned it was being paid for by a raid on North Sea oil.