FREQUENTING the corridors of Westminster, you pick early clues regarding what the Tory Government has in store for us. Recently I’ve heard the same story from several different sources. Our ambitious Chancellor of the Exchequer is planning a new fire sale of publicly owned assets. Or as it was put to me: “If it’s not nailed down, sell it”.

Significantly, George Osborne’s intended sell-off includes the Green Investment Bank (GIB), which the former Tory-Lib Dem coalition government set up from scratch with £3.8 billion of your money, and which opened its doors in 2012. Amazingly, though in business for only three years, the GIB is already making a profit for the taxpayer. So why sell it off – and so soon?

To explain what Osborne is up to, we need to know more about the Green Investment Bank, which has its corporate headquarters in Edinburgh. I feel proprietorial for I had a modest role to play in bringing the GIB to the capital.

The idea goes back to before the 2010 General Election. The global financial crisis had created an obvious barrier to raising private capital for investment in renewables and low-carbon industries.

Meeting the UK’s climate change targets was in danger. The obvious solution was a public infrastructure bank, able to lend long term to worthy “green” projects while leveraging in private sector cash along the way.

Labour put forward a vague promise for a GIB it its 2010 manifesto but – surprisingly – so did the Conservatives. Then David Cameron was busy bicycling to the political centre in order to shed the Tories’ nasty image. He even jetted off to the Arctic Circle to be photographed with huskies, in a photo op designed to prove the Tories had finally accepted the need to combat global warming. The GIB seemed like a good wheeze to show the Tories took green issues seriously.

Meanwhile, in the City of London, the bankers were not unhappy with the idea. They could see a huge market opening up for investment in green energy projects. That meant a lot of profit. Alas, in the aftermath of the credit crunch, the City was licking its financial wounds and paying a lot of dosh in well-deserved fines. Having the state bear some of the upfront risk while cutting the City in for a slice seemed a good idea.

When Cameron entered Downing Street in 2010, it was only a matter of time before the GIB opened its doors. But where? Clearly the City assumed it would be close to the local wine bars. In June 2010, I penned a column welcoming the notion of a Green Bank and suggesting it was located in Edinburgh, which has a strong banking infrastructure and is located close to where many big renewables projects were likely to be built. This idea was immediately taken up by the Edinburgh Chamber of Commerce which began a lobbying effort that duly paid off against strong competition from nearly 30 English cities.

Or did it? Certainly the GIB has its formal HQ in Morrison Street in Edinburgh, next to the Conference Centre. But on enquiring you will discover that the GIB has only 50 of its current 113 staff based in the Scottish capital, handling administrative and backroom functions. The dealmakers are all based in… er, Millbank Tower in London.

GIB’s chief executive is Shaun Kingsbury, an able and affable Northern Irishman. He is based in London, lives in the Home Counties, and commutes to Scotland a couple of days a week. Kingsbury argues that putting together funding deals would require his people travelling to the City of London, so it makes sense to have them live there rather than commute from Edinburgh. It is an excuse I’ve heard all my life to justify London’s clammy grip on decision-making. The chairman of the GIB, by the way, is a certain Lord Smith of Kelvin.

NEVERTHELESS, in just three years, the GIB has proved that public-sector banking – free from the short-termism and bonus culture of the City – is a successful model. GIB is the most active investor in the UK green economy. By the end of the 2014-15 financial year, it had invested £1.8bn in 46 diverse green projects across the whole UK, including offshore turbines, energy efficiency schemes in sheltered housing, a street lighting project in Glasgow, and CHP and biomass plants. In addition, GIB has also leveraged in another £6.9bn in private investment.

All this has been done on a strictly commercial basis resulting in a nine per cent return on portfolio and the GIB’s first annual cash profit. More important still, in 2014 GIB projects produced 16.3 TWh of renewable power and saved 4.2m tonnes of CO2 emissions. Public banks which make a profit after only three years in operation don’t fit the Tory “free market” narrative. Which may explain why Osborne is now intent on flogging off the GIB.

Actually, as I understand it, GIB shares will not be offered for sale to the general public but will be “placed” privately with two big institutional investors, including a foreign sovereign wealth fund. The Government will keep a minority shareholding for the time being but, I expect, sell this nest egg close to the next election.

Dumping the GIB is yet more proof the Tories have abandoned their pretence of being the “greenest government ever”. As well as his fixation with fracked gas, we’ve also seen Osborne impose the climate change levy – originally intended as a quasi-carbon tax on polluting energy sources – on the renewable sector. He remains studiously vague about his own attitude to global warming but I’ve heard his allies on the Tory backbenches proudly declare themselves climate change deniers.

Yet Osborne may not get an easy ride trying to privatise the GIB. The bank’s activities are governed by the Enterprise and Regulatory Reform Act 2013. This gives the GIB a statutory mandate to invest only in projects that reduce greenhouse gas emissions, protect the environment and biodiversity, and promote sustainability. Selling off the GIB will necessitate removing this statutory guidance for two reasons.

Firstly, it is too restrictive for private investors, even so-called ethical funds. Secondly, as long as it is in place, the GIB will be deemed a government-controlled body by public auditors and ratings agencies. The Chancellor certainly does not want the GIB’s contingent liabilities sitting on the books during his mad dash to eliminate the national debt, burnishing his credentials as Cameron’s successor. Besides, those green apron strings will reduce the GIB’s asking price.

We should oppose any attempt to modify the Act. A privatised GIB without statutory guidelines to invest in green and sustainable projects would soon evolve into just another profit-maximising investment bank. But Osborne could face opposition in Westminster. He will almost certainly require the legislative consent of the Scottish Government to make a change in the legal status of the bank, which is incorporated under Scottish law. To escape a possible Holyrood veto, the Treasury could order the shifting of the GIB’s company name plate to Millbank. At which point we will see just how independent is the GIB’s board.