UK Infrastructure Bank Bill [HL]

Lord Bishop of St Albans Excerpts

Committee stage & Lords Hansard - Part 1
Tuesday 14th June 2022 Lords Chamber

Finally, I have some figures to really drive this home. To be serious about a 1.5-degree target, global production of oil and gas must fall by 31% and 28% respectively between now and 2030. But the countries known as the “fossil-fuelled five”—Australia, the UK, Canada, Norway and the USA—are set to increase their oil production, so the global figures will increase by 33% and 27%. So we need a 31% fall and a 28% fall; instead, we are looking at a 33% rise and a 27% rise. It is crucial both that we do not put any money from this bank into fossil fuels and that we send a signal to the world that nobody should be putting money into fossil fuel exploration.

[The Lord Bishop of St Albans]

My Lords, I declare my interest as a vice-president of the Local Government Association and president of the Rural Coalition. I shall speak to Amendment 9, which stands in my name, but I also want to give my broad support to Amendments 6 and 7, which also deal with regional inequalities, and to echo the importance of getting biodiversity and nature into the Bill.

It is telling that London, as the most productive region of the UK, receives a larger per capita amount of public spending compared to other regions of the UK. Productivity relies as much on public investment as it does on private investment but, at the same time, it makes sense economically, from a private perspective, to invest in those areas that receive significant public backing, particularly in areas such as transport. The reality is that government transport spending by region remains heavily skewed towards London, at nearly double the UK average. Hence, it certainly holds that public expenditure is a significant contributory factor to productivity, even if other factors, such as economies of scale and private investment, also play their part.

Increasing the UK’s productivity and reducing the productivity gap is the first aim listed in the Government’s 12 missions to level up the UK, but this is not adequately reflected in the UK Infrastructure Bank’s objectives. The second objective, which a number of noble Lords have referred to, is supporting regional and local economic growth. That is an extraordinarily broad objective that allows incredible levels of discretion over where the bank will focus its investment. Supporting infrastructure improvements in some of the wealthiest parts of London to drive local economic growth would fall under the remit of the bank’s activities but that is surely not what the bank is meant to be doing. We need to concentrate investment in specific infrastructure initiatives to boost regional productivity and close the infrastructure gap.

I fear that the integrated rail plan is a good example. It has its priorities absolutely inverted. Better connecting London to Birmingham and Manchester is being given precedence over connecting some of the northern cities to one another. The scrapping of HS3 and the eastern leg of HS2 remains a mistake and, to quote the Mayor of Greater Manchester, is rightly seen as a betrayal of the north. People in deprived or less productive parts of the country are tired of their second-rate infrastructure and the lack of investment in it. The amendment places a clear responsibility on the bank to close the productivity gap between regions of the UK, better to align it with the Government’s levelling-up objectives.

The need to close regional infrastructure gaps does not pertain just to metropolitan areas. It is a crippling issue for rural communities. One thing I shall come back to when we get to the amendment—later today, I hope—is how we want to rural-proof what is going though in legislation. The rural economy is 18% less productive than the national average, and while economies of scale contribute to this, the gap is primarily driven by a failure to engage with rural economies on their own terms.

Poor rural transport infrastructure and digital connectivity are arguably the two biggest factors raised by those trying to sort out the huge gap between urban and rural in this country. The fear is that the UK Infrastructure Bank, as a private company wholly owned by the Treasury, will not be subject to the usual rural-proofing requirements to which all government departments are subject. Rural areas must be adequately considered as viable locations for investment by the UK Infrastructure Bank. By focusing on closing regional productivity gaps, this amendment would ensure that rural areas and underperforming urban areas would receive their fair share of the bank’s finances—money desperately needed to level up.

As this is simply a probing amendment, I am at this stage just listening to the other interesting amendments and I do not particularly want to push this later, but I would be grateful if the Minister could address these concerns. What mechanisms will be hard-coded into the bank’s commitments to prioritise investment in those areas that suffer from poor productivity and need improved infrastructure to meet that first mission statement of Her Majesty’s Government on levelling up?

[Baroness Brown of Cambridge (CB)]

My Lords, I rise briefly to give general support to the amendments in this group and specifically to support Amendment 4 in the name of my noble friend Lady Hayman and other noble Lords. I declare my interest as chair of the Adaptation Committee of the Climate Change Committee.

I agree with the noble Baroness, Lady Hayman, that it is absolutely critical to include adaptation in the bank’s remit in the Bill. It is only too easy to forget about adaptation, as so much recent, important government policy has done—so much so that in the Adaptation Committee’s advice to government last year on the third climate change risk assessment, we included a table of recent policy and legislation, showing just how frequently opportunities to include adaptation had been missed. It is crucial that we remind everybody to think about this and putting it in the Bill will help make that difference.

The most obvious example I have pointed to recently has been support for such things as the Green Deal as well as for net-zero homes. We are asking people to rip their homes apart to make them net zero but not at the same time supporting them to make the changes that would make them resilient to the future hotter summers that we are going to experience. It would be stupid to do those things separately—to have to refurbish your home twice. We must make sure that adaptation is flagged up in the Bill.

We also need to keep reminding people that, in dealing with climate change, net zero is not enough. Even if we are on a global pathway to net zero by 2050, the temperature will go on rising up to 2050, and we will look back from 2050—well, some of us, such as the noble Lord, Lord Ravensdale, might—and see that every decade between now and then was the hottest on record; so we must make sure that adaptation is a focus of the Bill.

I also strongly agree with the noble Lord, Lord Holmes, that the Bill must recognise nature—the natural environment, our natural capital—as essential infra- structure. The Bill specifically identifies as infrastructure the technology and facilities for removal of greenhouse gases from the atmosphere. The best and cheapest and way to do this is very often a tree. It would be completely perverse to encourage a complex engineered solution in a situation where an investment in nature could deliver.

As the noble Lord, Lord Teverson, said—I strongly agree—investments in nature-based climate solutions, especially those for adaptation, face some of the most difficult barriers and hurdles to secure, so we should absolutely ensure that this important development of the UK Infrastructure Bank enables those critical investments. If I might do a little bit of advertising, I will say that the Adaptation Committee is currently producing a report on the barriers to adaptation investment, which will be published in the autumn. I am sure the UK Infrastructure Bank will be an important part of the solution in overcoming those barriers.