The government’s plans for the Green Investment Bank have been dubbed “a false step” by independent thinktank Civitas.
In a new report, Civitas said that establishing the bank would give a boost to the low carbon economy at the expense of the rest of UK industry.
Civitas said the GIB ” is too restricted and as a result will reduce economic growth” and called for a broader Industry bank to be set up to “meet the needs of all British manufacturers, not only the sectors currently in vogue with our political elites”.
The report argues that to set up a bank just for “high-tech sectors and low-carbon manufacturing” is short-sighted.
“High-tech industries are only a small proportion of the economy,” stated Civitas. “In 2007, British manufacturing made profits of £454bn, but high-tech industries contributed only £64bn of this total. It would be short-sighted for the government to focus on a small fraction of manufacturing industry at the expense of other producers that contribute far more.”
The thinktank contends that the Green Investment Bank “is imposing a straitjacket on enterprise when we urgently need to give innovators the freedom to experiment in all sectors”.
It claims the GIB is an attempt by the government to “pick winners. Sometimes a wise policy will unavoidably ‘pick winners’, but a government should never use its monopoly powers to suppress creativity.”
David Merlin-Jones, research fellow at Civitas, said: “An industry bank doesn’t need to have ‘Green’ in its name to support this specific sector and the government shouldn’t be afraid of setting their focus wider than is currently the case.
“An industry bank inclusive of all British manufacturing will maximise returns and these can be redeployed for green industries while benefiting everyone in the process.”