UK Infrastructure Bank Bill [Lords]

John Redwood Excerpts

2nd reading
Tuesday 1st November 2022 Commons Chamber

[The Chief Secretary to the Treasury (John Glen)]

I beg to move, That the Bill be now read a Second time.

The UK Infrastructure Bank Bill will finalise the bank’s set-up and ensure that it is a long-lasting, enduring institution. The Bill will set out its objectives to tackle climate change and support regional and local economic growth in legislation, as well as giving the bank a full range of spending and lending powers, so that it can benefit communities across the country and help the UK achieve its net zero goals. The bank is already having an impact. Since summer 2021, when the UK Infrastructure Bank became operational, 10 deals worth close to £1.1 billion have been done, including providing financing for a new £500 million fund that could double the amount of subsidy-free solar power in the UK.

This is a Bill for the whole UK. Thanks to £22 billion-worth of capacity, the bank will be able to support infrastructure investment and the levelling up of the whole UK. The bank represents a step change in the Government’s ability to crowd in private sector capital and to address the economic and climate challenges the country faces. The UKIB will focus on prioritising investments where there is an under-supply of private sector financing, which we expect will unlock a further £18 billion of investment.

Before I go on, I would like to thank my noble Friend Baroness Penn for her work in bringing the Bill through the other place. The Bill has already undergone thorough scrutiny, as Members would expect, and I look forward to discussing it further today and in Committee in a few weeks’ time.

It is worth remembering why we set up the UKIB. Four years ago, the National Infrastructure Commission published its national infrastructure assessment. It recommended that the UK create its own domestic bank if funding for economic infrastructure was to be lost from the European Investment Bank. As Members will recall, the UK did lose its EIB funding, worth around £5 billion a year. However, I would like to be clear that this is not intended to be and is not a direct replacement for the EIB funding, which, given its very broad remit, at times crowded out private sector funding. There was widespread consensus that we would need to bring forward plans for the UKIB, which we did, and I pay tribute to my right hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), who played an instrumental role in bringing those plans to fruition.



When establishing the bank, we were cognisant of three specific recommendations from the NIC. First, that there would be governance to safeguard the operational independence of the bank. We will come on to it later, but one of the key purposes of the Bill is to protect exactly that. It will make it impossible for the Government to simply dissolve or sell the bank without further legislation. We will also be unable to alter its core objectives on climate change and regional and local economic growth.

Secondly, the bank should provide finance to economic infrastructure in cases of market and co-ordination failures, catalysing innovation. We all know that infra- structure projects take a long time and cost a lot of money, and I want to see more private investment in such projects. Often, however, the private sector does not provide enough finance to emerging innovative technologies that have a higher risk profile—for example, net zero technologies or those that are in areas of the UK that do not historically get financing.

[John Redwood (Wokingham) (Con)]

Can the Chief Secretary explain why the bank is investing in a very expensive cable electricity link between the United Kingdom and Germany, given that we are in the same time zone and have similar weather, and both countries are chronically short of electricity capacity? It does not sound like a good idea to me.

[John Glen]

I will not be able to comment on specific investments. As I said, a series of investments have been made in the last 12 months, and I would be happy to correspond with my right hon. Friend and put him in touch with the bank so that the logic behind that decision can be explored with him.