UK Infrastructure Bank Bill [Lords]

Jonathan Edwards Excerpts

2nd reading
Tuesday 1st November 2022 Commons Chamber

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

It is a pleasure to contribute to the debate, and to make a very short speech about the sort of projects that I hope the UK Infrastructure Bank will support. Given that we are talking about more than £20 billion, I am surprised that a great many Members of Parliament are not making specific bids. However, I will make the best of the time available to me.

This bank was created to replace the European Investment Bank, which, as you well know, Mr Deputy Speaker, had a proud record of investing in Wales. In the decade preceding the EU referendum, the EIB made £2 billion worth of investments in a wide range of sectors in Wales, including social housing, transport, energy, water and education. Wales was promised “not a penny less” during the referendum campaign, so a benchmark figure should be £200 million of investment in Wales per annum, adjusted for inflation. The Welsh Government have already expressed their concern that there is an overall shortfall of more than £1.1 billion in the Welsh budget as a result of our departure from the EU. I hope that the Minister will clarify whether the “not a penny less” promise applies to UK Infrastructure Bank spending.

Before I turn to the main focus of my speech, I want to touch on governance and accountability. Infrastructure development in my country is largely the responsibility of the Welsh Government, and I therefore welcome what the Minister said in his opening remarks about a greater role for the devolved Administrations. However, I am sure he will be aware of the Welsh Government’s view—as well as that of various Senedd Committees—that that Government should have equal status in terms of establishing the bank’s governance structures, as well as a role in setting its remit.

Currently all the bank’s directors are appointed by the Chancellor, and one small and obvious first step would be for the Welsh Government to appoint a director. According to the House of Commons Library, between five and 14 directors can be appointed by the Chancellor. While this would still be a far cry from an equal partnership, if the devolved Governments appointed one each, that would still allow 11 appointments for the Chancellor, including those of the chair and chief executive.

On the issue of scrutiny, it seems to me completely reasonable for the bank to be subject to a statutory requirement to appear annually before the relevant Senedd Committees. It may surprise Ministers and indeed other Members, but the Welsh Government do not brief Welsh MPs on their position in relation to UK Government Bills. In view of the work that has taken place in the Senedd and the statements made by Welsh Government Ministers about the Bill, they would do well to inform Welsh MPs of their reasons for not allowing those of us who bother to research their proceedings to understand where they are coming from. However, my understanding is that following close scrutiny of the Bill, the Welsh Government, as well as three separate Senedd Committees, believe that every clause requires the Senedd’s consent, as opposed to the six clauses for which the UK Government are currently seeking consent.

Furthermore, I understand that the Welsh Government have made it clear that they will not grant consent to the Bill unless their concerns about governance and accountability are addressed—perhaps the Minister was being slightly optimistic in his opening remarks—because the bank operates on a UK-wide basis, and will be able to exercise functions in Wales in areas of devolved competence.

If the new Prime Minister wants to restore integrity and accountability to the premiership, he surely knows that a key part of that process is resetting intergovernmental relations not only with the EU but with the Welsh and Scottish Governments. As I have said, nearly all post-Brexit related Bills are being used to trample over the devolved settlements. This is the first big test for the new Administration: that the UK Government is going to adopt the more grown-up approach of collaborating fully with the national Governments within the Union. Can the Minister guarantee that the bank will not support any projects in Wales that the Welsh Government oppose?

What I really want to talk about, however, is a project that I believe falls perfectly within the UK Government’s stated aims for the new bank, namely helping to address geographical wealth inequalities within the British state and helping to tackle climate change. The Minister will be aware of the protracted discussions about the proposed Swansea Bay tidal lagoon. In 2013, plans were announced to develop the lagoon. The development received planning permission in 2015, but plans collapsed in 2018 after the UK Government decided that they could not justify a contracts for difference financing model for the scheme. Since then, new proposals for a £1.7 billion lagoon were announced in October last year. DST Innovations hopes to build the lagoon over a 12-year period as part of the wider Blue Eden scheme that will include the UK’s largest floating solar farm, 5,000 cutting-edge eco-homes and a high-technology battery factory creating 1,000 jobs. The lagoon itself aims to produce 320 million MW of electricity, and agreement has already been reached with Swansea Council for a plot of land for the battery facility.

Such a project would place south Wales at the forefront of global environmental technology innovation. It would be a transformative project for the area and I am sure we all agree that we want to see the plans come to fruition. My concern is that we have felt close to delivering a Swansea lagoon on many occasions. I therefore ask the Government: is there scope for discussions between the infrastructure bank and the developers—that is, if they are not already happening? The ability of the bank to offer guarantees, for instance, could be useful in helping the developers to draw down the private finance they are seeking, hopefully at a preferential or slightly more favourable rate.

New technologies such as this come at a premium, but I hope the British Government will have learned from wind and solar that, once established, these technologies become much cheaper and an essential part of the electricity generating mix. Tidal is also a reliable energy source, giving it added value compared with other renewable technologies. Tidal technology off the Welsh coast offers huge opportunities for Wales, and I am sure the Minister will be aware of proposals for a far bigger lagoon, over 30 km in length, off the north Wales coast.

Furthermore, the Welsh Government last month announced the creation of their own renewable energy generation company, with initial plans to develop wind technology on public land. I really welcome this policy, because my constituency houses many wind developments that are owned by the state-owned companies of other Governments, which means that the profits from the use of Welsh resources leave Carmarthenshire and leave Wales. Revenue from the new Welsh Government-owned company will be reinvested in schemes to increase energy efficiency in the Welsh housing stock, and it therefore becomes circular—another stated aim of the bank. Clearly, there is therefore scope for formal links between the UK Infrastructure Bank and the company owned by the Welsh Government.

UK Infrastructure Bank Bill [Lords]

Jonathan Edwards Excerpts

Report stage
Wednesday 1st February 2023 Commons Chamber

a devolved Parliament before embarking on regulatory change. I commend the amendment to the House.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

I was going to make my points through interventions, but as so few Members want to speak, I thought I would take the opportunity to make a speech. I will speak very briefly to new clause 2 and amendment 5—which stand in the name of the official Opposition, and deal with the need to ensure that the geographical investment is spread across the UK, which is of course is something we all support—and amendment 2, tabled by the right hon. Member for Dundee East (Stewart Hosie), which deals with the constitutional challenges created by these post-Brexit agencies and frameworks. The right hon. Gentleman made his points very eloquently, and I fully support what he said.

In my speech on Second Reading, I highlighted how I thought some of the challenges outlined in these amendments could be dealt with. In my view, that is primarily by ensuring that post-Brexit frameworks and agencies such as the UK Infrastructure Bank have a formal role for the Welsh, Scottish and Northern Ireland Governments within their constitutions and their administration. When I made that speech on Second Reading, the Welsh Government were withholding consent; they have now decided to offer consent because the UK Government have given an element of a concession by outlining that a director of the UK Infrastructure Bank will be responsible for liaising with the Welsh Government—I suppose the same will be true for the Scottish and Northern Irish Governments. That does not go quite as far as I was calling for on Second Reading, when I made the case for the Welsh, Scottish and Northern Irish Governments to be able to appoint their own individual directors.

That concession is a step forward, which I of course welcome. However, the Minister might be aware that the Climate Change, Environment, and Infrastructure Committee in the Senedd, which was responsible for scrutinising the legislative consent mechanism, advised the Welsh Government against awarding legislative consent because of that lack of a formal role—indeed, there was no role whatsoever for the Senedd. I would be grateful if the Minister reflected on my Second Reading speech, where I made the case that it would be very helpful if the UK Infrastructure Bank had to be scrutinised by the relevant Senedd committee, as well as by the Welsh Government.

In conclusion, this really comes down to the Labour party. We expect that it will form the next UK Government; how is it going to Brexit retrofit the UK constitution in light of all these frameworks and agencies that have had to be created since the Brexit referendum, and since we left the European Union and the single market in particular? In Labour’s response to this debate, I very much hope to hear that it is looking at a radical realignment of the British state when it forms the next UK Government, giving the Administrations in Wales, Scotland and Northern Ireland, where appropriate, a formal role in these post-Brexit agencies and frameworks.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

A lost decade of broken Tory promises has left much of the UK with second-rate infrastructure, which is why we support the establishment and the strengthening of the UK Infrastructure Bank and will not be opposing the Bill. The bank is much needed. It will invest in projects that support our net zero targets and contribute to local and regional economic growth. However, we will go further than the Government and harness the full potential of the bank to provide good jobs and opportunities across the country. I will speak to our amendments a little later.

I wish to start by saying how much I welcome the Government’s U-turn in relation to their amendment 1. I see Ministers on the Front Bench who were with us when the Bill was debated in Committee. I am sure that they notice how similar their amendment is to the one that Labour tabled at that stage. Indeed, it is identical to our amendment—an amendment that they voted against. As Labour has repeatedly emphasised, reviews of the bank’s performance will be essential to ensuring that it meets its objectives to invest in the industries of the future. It was shocking that the Government wanted an initial review in 10 years with subsequent reviews every five years. The bank needs momentum and drive behind it, and I am glad to see that the Government have now realised the error of their thinking and committed to reviews of the bank every five years.