BRITAIN’S new Green Investment Bank must focus its lending on projects to develop innovative low-carbon manufacturing and energy infrastructures and reducing carbon emissions from existing industries, according to the manufacturers’ organisation, the EEF.
Andy Tuscher, director of the EEF’s northern region, which includes South Yorkshire, said the bank launch by deputy prime minister and Sheffield MP Nick Clegg still left unanswered the question of what the bank’s funding priorities will be.
“Manufacturing can play a major role in the low-carbon economy and in efforts to reduce carbon emissions by improving energy efficiency and developing new low-carbon products,” said Mr Tuscher.
“With a modest amount of funding to start with, the GIB should focus on developing innovative low-carbon manufacturing as well as energy infrastructure and decarbonising existing manufacturing. There is an opportunity for the bank to provide a carrot for such investment in innovation to balance the sticks from other green taxes and regulations.”
Mr Tuscher also questioned the success of the Project Merlin initiative to boost bank lending to small firms.
“The lending figures for Project Merlin do not yet indicate an improvement in credit conditions for small companies – a disappointing, but not surprising outcome given where a range of surveys have been pointing,” said Mr Tuscher.
“While it is early days for the Merlin agreement, we have been sceptical about the degree to which this target-based approach would lead to a significant improvement in credit conditions for SMEs.
“Progress on the key issue of a lack of competition amongst the banks, as well as insufficient transparency in lending decisions and the lack of understanding of banks’ customers must now accelerate.
“For manufacturing, there has been strong start to the recovery and the availability of a broad range of finance products, particularly bank lending, is critical to cementing continued growth in the sector.”