UK Infrastructure Bank Bill [Lords]

James Murray Excerpts

2nd reading
Tuesday 1st November 2022 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

I will set out the views of the Opposition. We will not oppose the Bill today, as it seeks to put the UK Infrastructure Bank, which has been operating on an interim basis since June 2021, as we heard, on a statutory footing. We support the establishment and strengthening of the bank, and we want the new institution to play its part in tackling climate change and supporting regional and local economic growth.

The need for economic growth is central to the challenges our country is facing today, and it comes after 12 years of low growth under the Conservatives. During the last Labour Government, despite the global financial crisis, the economy grew by 2.1% a year. Since 2010, however, the Tories have grown the economy by just 1.5% a year. The outlook under the Tories now is even worse, with growth forecast to be the worst in the G7 over the next two years. As the previous Chancellor recently admitted, under the Conservatives we have been stuck in a “vicious cycle of stagnation”.

That stagnation in our economy has seen real wages fall and the tax burden rise for working people in this country. Even before the disastrous mini-Budget, working people were paying the price for the Conservatives’ record of failure on the economy. What the then Chancellor announced on 23 September poured petrol on the fire, as Ministers unleashed a discredited and reckless economic approach on the British public. Trickle-down economics, unfunded tax cuts and an ideological slashing of protections for workers and the environment—no wonder the former Prime Minister and Chancellor were removed from office so quickly, and no wonder the current Chancellor has had to U-turn on almost every measure. The truth is that this economic crisis was created in Downing Street. The damage has been done, and working people will be paying the price for years to come.

Part of the reason for the Conservatives’ failure to grow the economy as it could have been growing over the last decade has been their failure to invest in the infrastructure our country needs. As we look ahead to the coming decade, investment in our country’s response to the climate emergency could not be more critical, both to protect the environment and to grow the economy.

That is why Labour’s green prosperity plan is so important. Under our plan, we would invest in wind, solar and nuclear power to make our electricity system zero-carbon by 2030, we would insulate 19 million homes across the country, bringing down carbon emissions and people’s home energy bills, and we would invest in new jobs in industries of the future, from electric vehicles to clean steel.

We recognise that the UK Infrastructure Bank can play an important role in supporting essential investment. We therefore welcome the fact that one of its objectives, set out in clause 2 of the Bill, is to help tackle climate change. But setting up the bank is not enough on its own; we need a Government who will drive forward the agenda of green investment that we need. Sadly, the Government’s record makes it clear that they will fail to rise to that challenge.

There is evidence of that failure littered throughout the past 12 years. Ten years ago, the Government set up the Green Investment Bank. Five years later, they sold it off to a private equity group. The Public Accounts Committee said that the bank had

“failed to live up to original ambitions”.

The Committee was clear that, in selling it off, the Government had been focused on

“how much money could be gained from the sale over the continued delivery of GIB’s green objective.”

Supporters of the current Prime Minister on the Conservative Benches may remember that, two years ago, the then Chancellor published a video on his YouTube channel titled: “Rishi Explains: Green Home Grants”. In that video, the now Prime Minister excitedly announced that the brand-new green homes grant scheme was open for applications. However, I was not able to find any videos of him explaining why the green homes grant scheme closed six months later and saw £1 billion cut from its budget. Although he seems to have forgotten to make a video explaining that, the Environmental Audit Committee was happy to set out its views. In its report, “Energy Efficiency of Existing Homes,” it concluded that the scheme had been

“rushed in conception and poorly implemented”

and described its administration as “nothing short of disastrous”.

[Richard Fuller]

The Opposition spokesman talks about the importance of sticking with plans and of permanence. That is quite right; this is infrastructure, which lasts a long time. Will he therefore use this opportunity on the Floor of the House to give the assurance that, should Labour form a Government in the near future, it will make no changes to the objectives listed in the Bill?

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[James Murray]

It would be a strange parliamentary procedure for the Opposition to commit to a Bill that has not even passed into law yet; let us see what happens in Committee and on Report and what the Government do, and indeed what we inherit when we become the next Government if we win the next election. So much has changed over the last few weeks; we do not know exactly what we are going to inherit and it is not sensible to make commitments now. We will set them out in our own time ahead of the next election.

Of course, the Government’s record of failure over the last 12 years continues to this day. In January, the Government pledged £l00 million to help Britishvolt, a UK battery start-up company, to build its planned battery gigafactory in Blyth, but when Britishvolt faced a critical hurdle yesterday and needed to access some of that funding, the Government refused. If the Government are not prepared to back a British business investing in green technologies and new jobs in Blyth, what on earth are they doing? When this money was announced, the then Business Secretary said the new factory was

“exactly what levelling up looks like.”

It turns out he may have been right, as this is exactly what levelling up looks like under this Government: broken promises, a record of failure, and a Government unable to deliver the investment and jobs we need.

The truth is that the Government and the newly appointed Prime Minister have a record of failure on investing in green infrastructure for our country and our economy. So, while we welcome the new UK Infrastructure Bank and its focus on tackling climate change, we know that no matter how well it plays its part, the British people need a Government with an effective plan to make the investment in the jobs, homes and energy supplies of the future a reality.

I have focused so far on the first of the UK Infrastructure Bank objectives set out in this legislation: helping to tackle climate change. The second of the two objectives in the legislation is also critical for the bank’s success, and is described as being

“to support regional and local economic growth.”

We firmly support that objective, and we want to see all parts of the country benefit from investment in green jobs of the future, along with improved rail and other transport services, and other essential modern infrastructure, including broadband. But when it comes to supporting economic growth across the country—“levelling up” as the Government used to call it—we know that words ring hollow unless people see change. That is why clause 2(6) is so important, as it seeks to make sure the bank has regard to the first mission of the Government’s “Levelling Up” White Paper when exercising its functions under this Bill. We have heard rumours that the Government may seek to remove this new requirement from the Bill now that it is back in the Commons. I am sure the Minister will agree that doing so would make it clear the Government have abandoned their commitment to levelling up, so I urge him in his closing remarks to confirm that this requirement will remain in the Bill.

Finally, along with doing all it can to help tackle the climate crisis and to support economic growth, we believe that the UK Infrastructure Bank must also play its part in helping create good-quality jobs with decent pay and conditions. All businesses and bodies receiving public money from the UK Infrastructure Bank must have a plan to create those good jobs with decent conditions, and there must be tough contractual sanctions to make sure those commitments are honoured. To make sure the bank keeps that focus on good jobs at the heart of its approach, there must be a worker representative on its board.

After 12 years of low growth from the Conservatives, there is a vital need to invest in the infrastructure of the future. We need to invest across the country in new transport, new digital infrastructure, new sources of energy that are sustainable and secure, and new high-quality jobs with decent pay. That is why we support the establishment of the UK Infrastructure Bank and this Bill’s aim of putting it on a statutory footing.

We will of course press Ministers in the Commons Committee and Report stages to improve this legislation, and, as well as seeking changes from Ministers, we will defend changes made in the Lords that we believe have improved the Bill. Alongside the insertion of levelling up targets that I have mentioned, we welcome the amendment that changed the definition of “infrastructure” to refer to the circular economy, nature-based solutions and energy efficiency. We further support those amendments that strengthened requirements on the Government to have a more regular and meaningful review of the bank’s effectiveness and impact.

However, even if we succeed in strengthening this Bill and the operation of the bank, we know the country needs far more from its Government. We need a Government who will use this bank as part of a far more ambitious plan to grow the economy, to make the transition to net-zero, and to create jobs and industries in all parts of the country.

The record of this Government to invest in greener homes, energy, and jobs is one of failure. The latest so-called “growth plan” from the Conservatives crashed the economy, and their newly appointed Prime Minister is doomed to fail, as he is trapped so tightly by a need to put his party first, leaving the country second. The truth is we need a fresh start to face the challenges of the future, and the sooner the British people get the chance to have their say, the better.

UK Infrastructure Bank Bill [ Lords ] (First sitting)

James Murray Excerpts

Committee stage
Tuesday 22nd November 2022 Public Bill Committees

[Andrew Griffith]

The steer provided from time to time in the context of the wider oversight of the investment bank, under its statutory objectives—effectively, the interpretation layer—is the right place. We do not disagree with the principle, but we could sit here all day and think of various admirable principles that we would like to put into statute. It is the Government’s contention that the provision would over-fetter the discretion of the bank and that it is not the appropriate vehicle. I understand that we will debate this point a number of times as we go through the Bill. The Government want the bank to get on with its job. We want to give it the statutory clarity it needs and to allow Parliament and Government, from time to time, if they wish, to give the steer required.

[James Murray (Ealing North) (Lab/Co-op)]

It is a pleasure to serve on the Committee with you as Chair today, Mr Davies. As we know, clause 2 concerns the objectives and activities of the UK Infrastructure Bank. Subsection (5) seeks to define the infrastructure and makes reference to the

“structures underpinning the circular economy, and nature-based solutions”,

which reflects an amendment made in the Lords that Government amendment 1 seeks to remove. The Government’s opposition to this measure seems to run counter to subsection (3)(a), which defines tackling climate change as an objective of the bank. I note that the Government do not oppose this objective of the bank, but they do seem to reject its delivery. We naturally oppose the amendment, which highlights how the Government seem to be all talk but unwilling to follow through on solutions to the climate emergency.

The truth is that the Government and the newly appointed Prime Minister have a record of failure on investing in green infrastructure for our country and our economy. While we welcome the bank’s focus on tackling climate change, no matter how well it plays its part, the British people need a Government with an effective plan to make the investments in the jobs, homes and energy supplies of the future a reality.

[Richard Fuller]

The hon. Gentleman may point to conflict between taking out from subsection (5) the words

“structures underpinning the circular economy, and nature-based solutions”,

and the objective in subsection (3) about tackling climate change, but if he looks at subsection (5)(c), he will see that

“climate change (including the removal of greenhouse gases from the atmosphere)”

is retained. The amendment does not affect the Government’s commitments on climate change at all.

[James Murray]

I thank the hon. Gentleman for his intervention—it is a pleasure to speak with him once again following his brief tenure on the Government Front Bench. I am not quite sure from that intervention whether he supports our opposition to Government amendment 1. Perhaps we will see when we push it to a vote shortly.

Let me move on to Government amendment 2. It seeks to remove from the clause subsection (6), which was introduced by Labour in the Lords. Subsection (6) requires the bank to have regard to public interest when targeting investment that improves productivity, pay, jobs and living standards and reduces the economic disparities between the nations and regions of the United Kingdom. Sadly, it comes as no surprise to us that the Government wish to remove commitments to better pay and the reduction of economic disparities. My hon. Friend the Member for Erith and Thamesmead already set out clearly the importance of prioritising job creation and putting it in the Bill. We want all parts of the country to benefit from investment in green jobs for the future, along with improved rail and other transport services and other essential modern infrastructure, including broadband.

When it comes to supporting economic growth across the country—or levelling up, as the Government used to call it—words ring hollow unless people see change. That is why clause 2(6) is so important, as it seeks to ensure that the bank has regard to the first mission of the Government’s levelling-up White Paper when exercising its functions under the Bill. We oppose the amendment because we seek to hold the Government to account on their commitment to level up our country.

Question put, That the amendment be made.

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[Andrew Griffith]

These amendments are a proof positive of the Government having listened. If the hon. Member is so crushingly sceptical, perhaps he will oppose the amendments, which have been proffered following consultation with the DAs. It was never our intention to pursue these measures without an appropriate mechanism to engage with the DAs. That is why we are happy to bring forward these amendments today.

I would like to put on the record my gratitude to officials in Scotland, Northern Ireland and Wales for engaging so positively to date on the Bill. I think we all support the Bill’s ultimate objectives, and I am hopeful that it will secure a legislative consent motion from each of the devolved legislatures. I hope that hon. Members will support the amendments.

[James Murray]

Government amendment 3 concerns the consultation of appropriate national authorities when using statutory instruments to change regulations pertaining to the definition of infrastructure and the bank’s activities, as outlined in clause 2(7). If changing regulations under subsection (7) fell within the legislative competence of the Scottish Parliament, Senedd Cymru or the Northern Irish Assembly, the amendment would require the Treasury to consult the relevant devolved authority.

Similarly, Government amendment 4 would require the Treasury to consult the relevant devolved authority before including in a statement of strategic priorities for the bank matters within the legislative competence of the devolved authority.

Government amendment 6 simply defines “appropriate national authority” to mean the Scottish Ministers, the Welsh Ministers, or the Department for Infrastructure in Northern Ireland.

We are supportive of these amendments, as we are supportive of the Union. Labour recognises the very real importance of working closely with devolved Administrations, and we recognise the great work of Welsh Labour. Indeed, the Government could learn a thing or two from Welsh Labour, given its record for infrastructure investment. The Welsh infrastructure investment plan has already allocated more than £12 billion for key capital projects to transform and maintain the NHS estate, deliver 20,000 affordable homes and deliver rail infrastructure improvements.

Amendment 3 agreed to.

Question proposed, That the clause, as amended, stand part of the Bill.

[Andrew Griffith]

Clause 2 is of central importance to the policy remit in which the bank will operate. I think that is why we have heard so many different—sometimes contrasting—views about how prescriptive that remit should be. The clause sets out the bank’s objectives and activities, as well as an inclusive definition of infrastructure, which is central to its scope—it is the UK infrastructure bank, after all. The clause also creates delegated powers to enable the Treasury to change the bank’s activities or the definition of infrastructure using secondary legislation under the affirmative procedure, so Parliament will have its say. The bank’s objectives to help the Government meet their climate change ambitions and to support levelling up across the UK are currently set out in the framework document. Clause 2(3) puts those on a statutory footing, which we hope sends a signal to the market about the Government’s commitment to these policy aims and the bank’s central role in helping deliver them.

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[Andrew Griffith]

My hon. Friend makes a very fair point. I will be happy to facilitate meetings between her— expert in transport as she is—and the infrastructure bank to get into some of those potential projects in more detail. She made a significant contribution as roads Minister.

Clause 2(5) sets out the definition of infrastructure. We have taken a power to amend the bank’s activities and the definition of infrastructure, using the affirmative procedure in both Houses. Across these different areas, clause 2 is the bedrock on which the bank will operate, and I commend it to the Committee.

[James Murray]

We know that after 12 years of low growth from the Conservatives there is a vital need to invest in the infrastructure of the future. Across the country, we need to invest in new transport, new digital infrastructure, new sources of energy that are sustainable and secure, and new high-quality jobs with decent pay. That is why we support the establishment of the UK Infrastructure Bank, and the Bill’s aim of putting it on a statutory footing.

We wanted the bank to address the deep economic inequalities across the country, which is why we sought to amend clause 2(3). My hon. Friend the Member for Erith and Thamesmead emphasised that, in supporting regional and local economic growth, the bank should reduce economic inequalities within and between regions of the United Kingdom to improve productivity, pay, jobs and living standards. In the same subsection, we wanted to add a third objective: for the bank to support supply chain resilience and the UK’s industrial strategy.

We wanted to retain two Lords amendments that strengthened the Bill: one that included the circular economy and nature-based solutions in the Bill’s definition of infrastructure, and one that Labour introduced to ensure that the Bill would focus on creating jobs and reducing economic inequalities. It is deeply disappointing that the Government have blocked those measures to make the UK Infrastructure Bank succeed and be fit for a modern, prosperous Britain. A Labour Government would deliver investment and loans in a way that supports the entire country, to meet the challenge of regional inequality and the commitments of our climate ambitions.

Question put and agreed to.

Clause 2, as amended, accordingly ordered to stand part of the Bill.

Clause 3

Strategic priorities and plans

Amendment made: 4, in clause 3, page 2, line 26, at end insert—

“(4A) The Treasury must consult the appropriate national authority about any provision which the Treasury proposes to include in a statement under this section and which concerns a subject matter provision about which would be within the legislative competence of—

(a) the Scottish Parliament, if contained in an Act of that Parliament,

(b) Senedd Cymru, if contained in an Act of the Senedd, or

(c) the Northern Ireland Assembly, if contained in an Act of that Assembly made without the Secretary of State’s consent.

(4B) The duty to consult imposed by subsection (4A) may be satisfied by consultation carried out before the passing of this Act.”—(Andrew Griffith.)

This amendment would require the Treasury to consult the relevant devolved authority before including in a statement of strategic priorities for the Bank any provision which the Treasury proposes to include in the statement and which concerns a subject matter within the legislative competence of the authority in question.

Question proposed, That the clause, as amended, stand part of the Bill.

[Andrew Griffith]

Clause 3 gives His Majesty’s Treasury the power to issue the bank with a strategic steer. We talked about that earlier as a mechanism by which the Government of the day can flexibly, and in an agile fashion, give the bank some direction. That steer will set out what, in the Government’s view, the bank should prioritise and focus its activities on. The strategic steer, and any revisions of it, will be required to be laid before Parliament.

The Chancellor issued the bank with its first strategic steer in March in order to inform the development of the bank’s inaugural strategic plan, which was published in June. That gave the opportunity to share an update on the Treasury’s interpretation of the bank’s strategic objectives and to clarify the definition of infrastructure that the bank should be working with. It highlighted the role that the bank can play in improving energy resilience, as well as setting out the outcome of the Treasury’s review of environmental objectives, confirming that there is significant scope in the bank’s existing objectives for it to invest in nature-based solutions.

We do not expect a steer to be issued more than once a Parliament, which will ensure that the bank has certainty in the long term to plan its investment strategy while keeping pace with Government priorities and ensuring policy alignment across infrastructure investment.

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[James Murray]

I beg to move amendment 19, in clause 4, page 2, line 38, at end insert

“and any subsequent, consequential, or relevant correspondence between the Treasury and the Bank.”

This amendment increases transparency surrounding directions issued by the Treasury to the Bank.

I will briefly set out what the clause will do, because that context is necessary to understand what our amendment would do in turn. Clause 4 would grant the Treasury the power to give directions to the UK Infrastructure Bank about how to deliver on its objectives. Subsection (2) would require the bank to comply with those directions, but the Treasury would be unable to give those directions until it had consulted with the bank’s board of directors. The Treasury would be required to publish the directions as soon as practicable, and under an upcoming framework document the bank would have the right to publish a reservation notice in respect of the direction.

The bank has been described by the Government as operationally independent, but we know that the Treasury is the sole stakeholder in the bank. It is therefore possible for the Treasury to exert influence on the bank’s activities as a result of its ownership stake under the normal principles of company law. The Bill’s explanatory notes set out the Government’s position, stating:

“The Government’s policy is that such influence should be used sparingly in practice, and that the default position should be that the Bank is independent as regards its operations and investment decisions.”

Given that the Treasury is the sole stakeholder in the bank, however, we have concerns about the procedural transparency of the clause. We are conscious that the clause provides the procedural framework for the Government to direct the bank. As we have heard several times this morning, the Prime Minister’s infamous Tunbridge Wells speech indicates the need for an extra degree of caution.

The explanatory notes state that the Government’s use of influence will be constrained by the need

“to act rationally and proportionately”,

but the record of the Government causes us to have doubts. We therefore wish to enhance the safeguards in the Bill and ensure that the Government do not exert undue influence over the activity of the bank. Conservative Governments have recently rejected Treasury orthodoxy, and the bank may in future raise concerns about the direction of Government policy. As the bank is compelled to abide by directions given by the Treasury, it is important that we have a transparent process to allow for scrutiny in those circumstances. That is why we tabled amendment 19, which seeks to insert a requirement that

“any subsequent, consequential, or relevant correspondence between the Treasury and the Bank”

be made public. The purpose of the amendment is to increase transparency surrounding directions issued by the Treasury to the bank. It will simply require the Treasury to publish additional relevant correspondence between the Treasury and the bank, providing fuller context to any directions issued and enabling the proper scrutiny of investments made with public money.

[Andrew Griffith]

The hon. Member’s amendment is a solution in search of a problem. The bank is constituted with taxpayers’ money, for which Ministers are accountable to Parliament and to Select Committees, which have the power to compel information and witnesses. There is a strong degree of accountability, and it is entirely appropriate that Ministers, from whichever side of the House they may one day hail, have the ability to direct the bank as necessary, as part of the matrix of ministerial accountability. I therefore reject the amendment. The Government will not support it, simply because we consider it to be wholly unnecessary.

[James Murray]

I take no reassurance whatever from the Minister’s comments, so I will push this amendment to a vote.

Question put, That the amendment be made.

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[Andrew Griffith]

Clause 4 contains a provision for His Majesty’s Treasury to issue the bank with a direction of a general or specific nature about how the bank is to deliver its statutory objectives. To address the concerns raised by the hon. Member for Ealing North, the bank must be consulted before any direction is given, and any direction given must then be published by the Treasury. Ministers are rightly accountable to Parliament for this bank, and for any element of risk to the Exchequer or taxpayer that its activities create. That is right, even though the bank will be operationally independent for its day-to-day operations and its own investment decisions.

It is therefore considered necessary and entirely appropriate that the Government have a reserved power to direct the bank about how it is to deliver its objectives. Without a power of direction in statute, His Majesty’s Treasury could still direct the bank; however, there would be situations where the board would refuse a direction if the power were not in statute, given directors’ obligations under the Companies Act 2006. The two things could conflict. The purpose of the clause is to clarify where that conflict could arise, and the power of direction in statute removes that potential.

I assure right hon. and hon. Members from both sides of the House that the Government expect to use the power infrequently. Constrained powers of direction are a relatively common feature of similar institutions, such as the British Business Bank and HMRC. I commend the clause to the Committee.

[James Murray]

I rise to speak briefly, as I set out our views on clause 4 more widely in the context of amendment 19, which I am disappointed that the Government chose to oppose. We were simply aiming to improve procedural transparency; it makes me wonder why the Government are so keen to avoid that being part of the Bill. Having lost that amendment, we will not be opposing the clause as it now stands.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Clause 5

Financial Assistance

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to consider clause 6 stand part.

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[David Linden]

Unfortunately, I was unable to catch the eye of the hon. Member for North East Bedfordshire, but I do not necessarily disagree with much of what he is saying. I only hope that the idea would extend, for example, to reform of the House of Lords and even the size of the Cabinet of the UK Government, which I think is the biggest it has ever been. I am more than happy to agree with the hon. Gentleman. He can rest assured of my support if he chooses to push the amendment to a Division, but I think we need a degree of consistency if he is willing to pursue this line of argument.

[James Murray]

Amendment 12 seeks to limit the maximum number of directors on the board of the bank, moving it down from 14 to eight. Amendment 13 stipulates that at least four of the board members must be non-executive directors. We will be opposing amendment 12, as we believe that it is important for a range of views and expertise to be represented on the board of the bank. We believe that narrowing the board simply narrows the potential for diverse insight and ideas. As we will push for in amendment 20, which I will speak to shortly, we believe it is vital that there be a workers’ representative on the board. Narrowing the maximum figure reduces the board’s capacity to gain workers’ insight. On amendment 13, we will abstain.

[Andrew Griffith]

I thank my hon. Friend the Member for North East Bedfordshire for rightly raising the important subject of governance, which relates to the arms length body in scope today. It is a very important point when considering how we manage efficiency and the will of Parliament through arms-length bodies. While not disagreeing in principle, the Government will not be supporting amendments 12 or 13, but I would be very happy to engage with my hon. Friend to see if there is something practical we can do.

My concern is with reducing the maximum board size to eight in the UK governance structure under the combined code, which my hon. Friend may have views on as well. Unlike in the US, in the UK we have a large number of committees of boards—rather more than is the case in the US. The limit of eight may present the challenge of not being able to successfully staff and structure those committees. That would be a concern to me.

The amendment requiring non-executive directors to hold a majority on the board is sensible, but I believe that would be the objective of the organisation anyway, and it complies with the corporate governance code to have a majority of non-executive directors. I do not think we need a requirement in legislation, but it is something I am happy to explore with my hon. Friend to give him the comfort he seeks without us moving out of potential compliance. I would ask him to withdraw his amendment.

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[David Linden]

I would not necessarily oppose that argument, but I look forward to the day when the legislation can be updated to remove any representatives of the Scottish Parliament’s view, when Scotland takes its place as a rightful independent nation.

[James Murray]

I will speak only briefly to amendment 5, which requires the board of the bank to appoint one or more directors to be responsible for ensuring that the board considers the interests of the appropriate national authorities when making decisions. Labour will not oppose the amendment as we believe it is important that the interests of devolved authorities are taken into full consideration through the administration of the bank.

Amendment 5 agreed to.

[James Murray]

I beg to move amendment 20, clause 7, page 3, line 23, at end insert—

“(ba) at any time, the Bank is to have at least one non-executive director who is a representative of workers.”

This amendment ensures there is a workers’ representative on the board of the Bank.

As I mentioned earlier, Labour is concerned about the absence of a workers’ representative on the board of the bank, especially as much of the board consists of political appointees at the behest of the Chancellor.

We are committed to a strong partnership between industry, workers and the state. Having a workers’ representative on the board of the bank is important for good governance. The UK’s corporate governance code states that a company should have a combination of a director appointed from the workforce, a formal workforce advisory panel, or a designated non-executive director to facilitate engagement with the workforce. It also states, however, that if the board has not chosen one or more of those methods, it should explain what alternative arrangements are in place and why. In the absence of such an explanation, we have tabled amendment 20, which was originally moved in the Lords. We recognise arguments made in the Lords about how the Government’s framework document, to be published after Royal Assent, provides safeguards and protective measures, however that document is not legally binding. Sufficient questions have also already been raised about the activity of the bank to require explicit assurances in the Bill.

[Richard Fuller]

Could the hon. Gentleman clarify to whom the clause refers when it talks about workers? Is he referring to workers of the infrastructure bank, and is he calling for a board representative of them, because most of those people will be bankers? I am not so sure that Labour has always felt that the bankers are the most in need of representation in financial institutions. Or is he referring to workers of the investee company? If so, how would that be facilitated?

[James Murray]

I thank the hon. Gentleman for his remarks.

As I set out, the UK corporate governance code already has clear guidelines about the involvement of workforce in governance of boards. However, we have not had explicit assurances from the Government. We have tabled the amendment to push the Government on that. We need assurances that investments and loans made by the bank will be guided by the economic needs of the entire country. Investments made into tax havens pose a real risk to achieving that goal. Marcus Johns from the think-tank IPPR North has said that the use of tax havens

“hollows out our economy, keeps wages low, holds communities back, and enables money to be syphoned away into a globalised system of extraction”.

He argued that the bank

“must look seriously to prevent the use of tax havens and avoidance among the firms it supports.”

As the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), said, a Labour Government would support

“British industry, supply chains & support industrial strategy”,

and ensure that trade unions

“have access to workplaces”

and that all

“businesses & bodies receiving public money from the UK Infrastructure Bank…have a plan to create good jobs with decent conditions”.

We believe that only with a workers’ representative on the board will the bank have that critical perspective on job creation and succeed in being governed with the entirety of the UK’s economic prosperity in mind.

[David Linden]

I rise to indicate my support for amendment 20—[Interruption]—which I gather is also being given by Comrade Fuller on the other side of the Committee. It is very welcome that the Labour party, having recently departed from its relationship with trade unions and workers, is finally seeing the light and coming back to the idea that it ought to have a strong association with trade unions. The amendment probably could have been tidied up slightly, perhaps to include somebody from the Trades Union Congress, but on the broad thrust of the argument I very much support the idea that the Labour party is once again deciding to go back to its roots, rather than flirt too much with the policy of the right hon. and learned Member for Holborn and St Pancras (Keir Starmer).

[Andrew Griffith]

I shall strongly resist the temptation to debate the fundamental merits of workers on boards, overturning the existing system of UK corporate governance, or indeed the nationality of any particular worker. Why stop at one English worker when one could have representatives of workers from all the DAs?

In thoroughly opposing the amendment, I confirm that the bank will comply with the corporate governance code, which provides, as the hon. Member for Ealing North outlined, a number of options through which a company can achieve the desired representation. The bank has already designated Marianne Økland to take on the role of facilitating engagement with the workforce. That will be set out in the annual report when published. I ask, perhaps fruitlessly, the hon. Member not to waste the Committee’s time by pressing the amendment to a vote, given that the bank is complying with the existing UK corporate governance code.

[James Murray]

While I welcome the Minister’s assurance about the bank’s compliance with the UK corporate governance code, I am disappointed that he feels that a vote on worker representation on the board would be a waste of time. It is an issue of great importance to the Opposition, so we will press the amendment to a vote.

Question put, That the amendment be made.

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[Andrew Griffith]

The clause sets out the core provisions on the make-up of, and appointment to, the bank’s board of directors. The clause requires that the board has a number of directors that is broadly consistent with comparable boards. It allows for the appointment of directors to have a spread of expertise across banking, infrastructure finance and climate change mitigation, as well as the appropriate balance between executive and non-executive directors. The clause sets out that the chair, chief executive officer and non-execs will be appointed by the Chancellor of the Exchequer.

All non-exec directors are recruited with reference to guidelines set out by the Office of the Commissioner for Public Appointments, and are being appointed based on the skills that they could bring to the board around the UKIB’s mandate. Throughout the process we have been conscious of the need to ensure a broad spread of expertise, as well as cognitive diversity. Finally, the clause contains provisions on the circumstances that would prohibit a person from continuing as a non-exec director, such as bankruptcy, or mental or physical incapacitation. I recommend that the clause stand part of the Bill.

[James Murray]

As the Minister outlined, clause 7 concerns the appointment and tenure of directors to the board of the bank. We note that it requires at least five but no more than 14 directors; that the board’s chair, chief executive officer and non-executive directors be appointed by the Chancellor of the Exchequer; that the tenure of non-executive directors not exceed four years; and that a person may not be appointed as non-executive director more than twice.

The clause also requires that a person ceases to be a non-executive director as soon as they cease to be a director by virtue of any provision of the Companies Act 2006, or are otherwise prohibited by law; they become bankrupt or their estate is sequestrated; a registered medical professional treating them provides the written opinion that that person is incapable of serving as a director due to physical or mental incapacity for more than three months; or the person has resigned from the position in accordance with the notification procedures of the bank. We recognise that the number of directors is broadly consistent with comparable boards, such as the Bank of England board. We also understand that the intention behind that is to provide flexibility and a wide spread of expertise.

[Valerie Vaz]

One of the difficulties is that the Bank of England does not have a spread across the regions. Does my hon. Friend not agree that we should have regional expertise as well, which is the whole point of levelling up all parts of the country?

[James Murray]

My right hon. Friend is right: it is critical that the bank considers regional inequalities in its mission, and we are very concerned that the Government opposed earlier amendments on having a commitment to tackle regional inequalities in the Bill. The fact that there is no reassurance that the board will have that in mind either causes further concern about what the bank’s mission will ultimately be.

[Katherine Fletcher]

Will the hon. Member give way?

[James Murray]

I am just drawing to a close.

We understand that the intention behind the composition of the board is to provide flexibility. Notwithstanding the important comments made by my right hon. Friend the Member for Walsall South, and our earlier comments about the lack of worker representation on the board, we will not oppose the clause.

Question put and agreed to.

Clause 7, as amended, accordingly ordered to stand part of the Bill.

Clause 8 ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Andrew Stephenson.)

UK Infrastructure Bank Bill [ Lords ] (Second sitting)

James Murray Excerpts

Committee stage
Tuesday 22nd November 2022 Public Bill Committees

[James Murray (Ealing North) (Lab/Co-op)]

It is a privilege to serve under your chairmanship, Mr Bone, and to speak to this important but uncontroversial aspect of the Bill. As we have heard, clause 10 concerns interpretation. We do not oppose the definition of “activities”, “financial assistance”, “infrastructure”, “local authority”, “objectives” or “relevant public authorities”.

Clause 11 is a short clause concerning the extent and commencement of the Bill, as well as providing its short title. It stipulates that the Act extends to England, Wales, Scotland and Northern Ireland. The legislation comes into force two months after the date on which it is passed, and it is to be cited as the UK Infrastructure Bank Act 2022. Government amendment 7 simply removes the privilege amendment inserted by the Lords, and is a procedural necessity that we have no reason to oppose.

Question put and agreed to.

Clause 10, as amended, accordingly ordered to stand part of the Bill.

Clause 11

Extent, Commencement and short title

Amendment made: 7, in clause 11, page 5, line 11, leave out subsection (4).—(Andrew Griffith.)

This amendment would remove the privilege amendment inserted by the House of Lords.

Clause 11, as amended, ordered to stand part of the Bill.

New Clause 1

Businesses and bodies the Bank invests in

“(1) The Bank must publish an annual report setting out—

(a) the geographical spread of businesses and bodies it invests in, and

(b) the ownership of the businesses and bodies it invests in.

(2) The Bank must prepare and publish a “Good Jobs” plan for all businesses and bodies it invests in, which requires the business or body to improve productivity, pay, jobs and living standards.”—(Abena Oppong-Asare.)

This new clause ensures that the Bank considers the location and ownership of the businesses and bodies it invests in and only invests in businesses and bodies who create “Good Jobs” plans to improve productivity, pay, jobs and living standards.

Brought up, and read the First time.

[Abena Oppong-Asare]

I beg to move, that the clause be read a Second time.

New clause 1 supports amendment 23. It would require the bank to publish an annual report setting out the geographical spread of the businesses and bodies it invests in, and their ownership. To be clear, amendment 23 required the independent review, conducted over longer time frames, to consider those points. Our new clause requires the bank to report annually on those matters.

Subsection (2) of new clause 1 would require the bank to publish and invest in a good jobs plan for all businesses and bodies, which requires the business or body to improve productivity, pay, jobs and living standards. Before the Minister objects, I will say that the wording might be familiar to members of the Committee, particularly Conservative members, because it is the same wording they voted to remove from the Bill earlier in Committee. The wording will be familiar to Conservative Committee members because it is the first mission of the Government’s levelling-up agenda. Given their voting record in this Committee so far, I am not sure it is something they are committed to any more, but I am sure they can agree that they want the UK Infrastructure Bank to create highly-skilled, well-paid jobs in their constituencies and across the country. I know that constituents in Erith and Thamesmead want to see better job opportunities, whether for young people or older people who are looking to reskill and retrain.

As I said earlier, we do not believe in growth for growth’s sake. We believe in growth because it creates jobs and improves living standards. With fairer choices, we see our economy growing again, powered by the talent and effort of millions of working people and thousands of our businesses. Our new clause would ensure that the bank plays its part in its mission, creating new industries across the country and working hand in hand with businesses to create jobs for the future. Before the Committee concludes, I want to take the opportunity to make some closing remarks and thank some people.