UK Development Bank

Jim Shannon Excerpts

Wednesday 20th June 2018 Commons Chamber

[Jeremy Lefroy (Stafford) (Con)]

I start by declaring my interest as chair of the international Parliamentary Network on the World Bank and International Monetary Fund.

In this debate I will put forward the strong case for the United Kingdom to establish a development bank. I believe it is needed now more than ever, and for two particular reasons. As we leave the European Union we will also leave the European Investment Bank as a shareholder. That bank is based in London and has provided large sums of very important capital to projects throughout the UK, not least the Thames tideway tunnel not a million miles away from here and being developed right at this moment. I realise that this particular area does not fall within the Minister’s responsibilities, but they do cover the context of an international development bank, and both the UK aspect of development, which is at present done through the EIB quite considerably, and the international aspect of development financing can come through the same institution; in fact, that would probably be mutually beneficial.

We are one of the few major countries in the world that does not have its own development bank, whereas France has the Agence Française de Développement, or AFD, the Germans have the Kreditanstalt für Wiederaufbau, or KfW, and many other countries also have development banks, often on a very substantial scale. I shall address that point later.

As one of the major challenges the world currently faces, alongside climate change and the environment, is the creation of jobs and livelihoods, particularly for young people, a development bank is needed more than ever. The World Bank estimates that at least 600 million jobs need to be created in the next 10 or so years globally; my estimate is that well over 1 billion new jobs are needed. It is estimated that the population of sub-Saharan Africa will double between now and 2060, to 2.4 billion. If we do not tackle the question of economic development and livelihood-creation around the world and support countries to ensure that their young people have opportunities there, the migration crisis of 2015 onwards will be chicken feed compared with what we will see in future. That is of huge relevance to those young people who are forced to take perilous journeys, and also of great concern to nations in Europe, such as the UK, and elsewhere which will be forced to countenance huge migration on a scale we have not yet seen even in the last few years. This is not a theoretical question of whether it would be nice to have such an institution; it is absolutely fundamental for the development of major public and private projects in the United Kingdom and internationally that we establish a UK development bank, and the sooner the better.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for giving way. I spoke to him earlier to get an idea of what this was about, and I congratulate him on bringing forward the debate. I have seen too many cases in my constituency of small businesses that are cash poor and asset rich and that are unable to make payments of even 1p more than the required amount. Does he agree that a development bank such as the one he has outlined that was friendly to small businesses and enterprises would encourage the bigger banks to remember their duty not only to the bottom line but to their local communities, which we represent, and to trust them to do the right thing with their money? Also, if he was looking for somewhere for this investment bank, would he agree that Belfast would be a great place for it?

[Jeremy Lefroy]

The hon. Gentleman is right, although I am sure that many places will bid for it when it is established, as I hope it will be.