UK Infrastructure Bank Bill [HL]

Lord Bourne of Aberystwyth Excerpts

2nd reading
Tuesday 24th May 2022 Lords Chamber

[Lord Bourne of Aberystwyth (Con)]

My Lords, I declare my interests as set out in the register. I am, of course, a member of Peers for the Planet. It is a great pleasure to follow the noble Lord, Lord Teverson. We have been on the legislative barricades on the subject of Cornwall before, but I agree with much of what he said about the Bill, and I will go into that.

First, however, I very much welcome the Bill, although I think it can be strengthened, and I shall be setting out some questions for the Minister. The Bill’s aim, as stated, is to put the infrastructure bank on a statutory footing and to ensure that it is an independent institution. I shall have something to say about that, too. It is a company wholly owned by the Government—a registered company under the Companies Act 2006. It has a dual-track approach, to be entirely fair: it is not just about tackling climate change, although that is central; it is also about supporting local and regional growth. I agree with both aims, which are key. Net zero by 2050 is central to everything we need to do as a Government and a country, and for the bank to have a leadership role in that it is important, as it is on levelling up. To have public sector finance with leverage-in of private sector finance is very valuable.

I very much agree with what the noble Lord, Lord Teverson, said, about the need to address the climate change goal on a broader front—by addressing nature challenges. The Climate Change Committee set those out very clearly in its independent assessment in 2021. We are near an ecological tipping point and we need a nature-positive economy. The report of the Dasgupta review, which the Treasury asked for, is seminal in that regard and much of the principle contained there should be in the Bill, front and centre. A basic difficulty I have with the legislation is that, on the one hand, there is not enough at the front of the Bill and, on the other, we are told that directions are coming forward under Clause 4 from the Treasury, independently of Parliament. We seem to be getting the balance wrong there and I should be interested to hear what the Minister has to say about that.

Moving on, the Bill’s definition of infrastructure under Clause 2(5) is not exclusive but, I think, needs to be more all-encompassing. For example, it includes gas and sewerage but not energy efficiency. Why not? It would be simple to include it and I think we should. We need to accelerate what we are doing on energy efficiency to be anywhere near getting to the net-zero goal in 2050 and I cannot see any compelling argument why it should not be in Clause 2(5). We need more detail on that.

I also press the Minister on the nature of the bank’s objectives and activities. I understand that the objects are set out in the company’s constitution and that can be altered only by primary legislation, as the Bill makes clear—that is absolutely right—and infrastructure can be altered only by an affirmative piece of secondary legislation. I go along with that as well. So far, so good, but Clause 4 allows the Treasury to give a specific or general direction to the bank about how to deliver its objectives. If that were limited to the issue of devolution, to which I will come shortly, all well and good, but I do not think it is. It does not appear to be under the legislation.

What is the interaction between objects, which can be altered only by primary legislation, and directions under Clause 4, which can be altered by the Minister—the Minister, incidentally, who also appoints all the directors? There is double control there, and it seems to me to get the balance wrong, particularly if we are stressing the importance of the bank’s independence, as the Minister rightly did. At the same time, Clause 4 says:

“The Treasury may give a specific or general direction to the Bank about how it is to deliver its objectives.”


As I said, that is the same person who was appointing all its directors. It does not look that independent to me.

I will also ask about the financial capacity. Twenty-two billion pounds sounds like a lot of money; it is made up of equity, debt and guarantees. it is a lot of money, but it does not seem as much when compared with other countries, such as Germany. Are we convinced that £22 billion is sufficient? I am also interested in hearing how that sum was arrived at, what evidence was taken and how that was assessed.

As I said, I am also interested—I am sure other noble Lords will be too—in the territorial extent and application, and the interaction with Wales, Scotland and Northern Ireland. I am pleased that the Government are quite clear that there is a devolved aspect to be dealt with. In fairness, Annexe A in the Explanatory Notes is helpful in that regard, indicating which matters are reserved and which are devolved. Of course, there is inevitably a grey area. This is the physics of it. What is also important is its chemistry: what provision are we making for discussion with the Welsh Government in the Senedd, the Scottish Government in Holyrood and the Northern Ireland Executive in Stormont? I hope that there are some measures which will be taken to ensure that, as a union, we protect all parts of the country in relation, not least, to the levelling-up part of the aims of the bank. I would be grateful if the Minister could indicate how she expects the interplay between the four parts of the United Kingdom to play out.

I have just two more points. First, on any potential conflict between aims, the Government have said—understandably and rightly—that energy security is important. We must look at energy security in terms of the operation of the bank. How does that interplay, though, with the need to ensure that we protect against high-carbon projects? Again, this perhaps comes back to the point of needing something in the legislation about a “do no harm” principle so that we can ensure that both aims are protected and one does not prevail over the other—otherwise, there is danger there.

Finally, I very much approve of the levelling-up part of the agenda in relation to the bank. The headquarters in Leeds is very welcome. It is a much more constructive move than the somewhat childish suggestion that the House of Lords goes to Stoke-on-Trent; it seems much more realistic and in line with what we should be doing. I am pleased about some of the earlier decisions on investment, which seem to be spread in south Wales, Teesside and so on—that, too, is valuable.

I am sure there will be many more points as we go through Committee and Report, but that was an overall view of the objectives and some general questions to my noble friend the Minister.