My Lords, I beg leave to ask the Question standing in my name on the Order Paper and I declare an interest as a member of the Peers for the Planet group.
My Lords, the £40 million Clean Growth Fund was launched in May 2020 as a commercially run venture capital fund managed by Clean Growth Investment Management. The fund manager has had over 400 expressions of interest from SMEs and intends to make several investments in UK companies this financial year. The Clean Growth Fund will develop a broad portfolio of companies investing in software and hardware across the power, transport, industry, buildings and waste sectors.
My Lords, I thank the noble Lord for his Answer. We have to invent a way out of the critical climate change emergency that we are in. Thankfully, innovation is playing a major role in finding ways of reversing the unbelievable level of pollution that human activity produces. This is a global problem, though, and it is clear that international co-operation is vital if we are to solve it. Does the Minister not agree that the budget for the Clean Growth Fund should be prioritised, be more transparent and have its remit expanded to work more closely with similar organisations around the world if we are to save our precious planet?
I agree with the noble Baroness and we will work closely with many other funds. The fund will make direct equity investments in UK-based companies that want to scale their promising green technologies.
My Lords, I am always sceptical of government picking winners, especially where the issue is not a shortage of private sector investors but too few profitable projects to finance. That said, will my noble friend maintain the Government’s focus on sustainable and resilient supply chains for energy, food, water and raw materials and transparently provide clarity with their co-investors on the criteria that cannot be met exclusively through private sector funding mechanisms?
Of course, my noble friend is correct to be sceptical, but we want to capitalise on the opportunity presented by the growing low-carbon global economy and we want to capitalise private investment into the UK clean growth sector.
I declare my interest as a director of the Peers for the Planet group. A Resolution Foundation report out today states that 20% of 18 to 24 year-olds are likely to face unemployment, yet there are huge potential opportunities for employment in the clean energy and climate crisis innovation areas. What are the Government doing to make sure that these young people are able to have the skills that they need to take up what will be an enormous amount of potential job opportunities?
I agree with the noble Baroness that there are tremendous opportunities, but we have a number of other government funds outside of the one that we are discussing today. For instance, the Green Homes Grant scheme has a training element within it, with several million pounds of grants allocated to training providers to provide jobs in exactly the sector that she mentions.
The managing partner of the Clean Growth Fund, Beverley Gower-Jones, has said that the fund will hopefully invest in two companies before the end of the year. This is from among hundreds of applications. Can the Minister explain how the aim of only two companies is reflective of the UK’s bold climate ambitions? How will the taxpayer share in any return and when might that opportunity materialise?
That is two companies this financial year; a number of other companies are in the pipeline. I am sure that the noble Lord would agree that it is proper that the fund manager does the appropriate due diligence to check that the money is well spent and invested properly. There have been 400 expressions of interest and the duration of the fund is over 10 years. It is a commercially driven fund and we hope to get our money back at the end of the day.
Can the Minister say how many local authorities applied for grants from the £2 million from the Clean Growth Fund allocated for improving air quality? How much has gone to London councils and how much has gone to areas outside London?
My Lords, I declare an interest in venture capital, as set out in the register. The Clean Growth Fund is one of several government-sponsored initiatives to support early-stage technology entrepreneurs. Can my noble friend the Minister advise if efforts are being made to share best practices across government departments, so that these initiatives do not operate in entirely independent silos?
My noble friend makes a good point. The BEIS team have been engaging with cross-Whitehall colleagues as the Clean Growth Fund has been developed and launched, including in the Department for International Trade, the Department for Environment, Food and Rural Affairs and the Foreign, Commonwealth and Development Office.