Where should the government’s Green Investment Bank be located?
If London was your initial answer, think again, because there is a growing body of opinion that believes it should be north of the border in Edinburgh.
And one of the voices talking up the Scottish capital’s credentials to host the bank is Energy Secretary Chris Huhne.
He told a meeting of the Scottish Parliament’s economy, energy and tourism committee that Edinburgh had a “very special advantage” because its financial institutions had a strong track record in lending to renewable energy companies.
Mr Huhne did however also state that the city faced strong competition from London and Leeds.
His comments won the backing of The World Development Movement, an anti-poverty campaigning organisation based in Edinburgh.
Liz Murray, head of WDM Scottish campaigns, said: “Here at WDM we’re right behind the idea of the Green Investment Bank. But it shouldn’t be overlooked that there is already a bank based in Edinburgh that, like the proposed Green Investment Bank, is almost entirely owned by the government and that, with the right investment criteria, could make an even bigger contribution to moving the UK swiftly to a low carbon economy than the GIB’s £1bn initial capital.
That bank, she said, was the Royal Bank of Scotland, which is more than 80% owned by the government.
“Imagine if RBS’s investment criteria matched those of the Green Investment Bank, adding its huge financial muscle for the good of the environment? That could really make a difference, and perhaps result in the step change in low carbon investment that is needed,” she added.
“As its major shareholder, the government could, and should, ensure that RBS’s investment criteria are aligned with those of the GIB.”
However, Graham Bell, a spokesman for the Edinburgh Chambers of Commerce, has downplayed the impact on Edinburgh if the GIB was located there: “It would be small fry compared to institutions like RBS or the Bank of Scotland, and even HSBC have a presence in the city that would be more significant, but £1bn of investment is not to be sniffed at,” he said.
Edinburgh’s reputation as a financial centre has been boosted recently with Virgin Finance and Tesco Bank opening offices.