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.