UK Infrastructure Bank Bill [HL]

Lord Ravensdale Excerpts

2nd reading
Tuesday 24th May 2022 Lords Chamber

[Lord Ravensdale (CB)]

My Lords, I welcome this Bill. I start by declaring my interests as a project director with Atkins and a director of Peers for the Planet.

To meet the Government’s strategic objectives of net zero and levelling up the UK, large amounts of infrastructure investment will be required. As a simple example, it is estimated that, to decarbonise our electricity system, we will need to install between nine and 12 gigawatts of new capacity every year—more than double what we have managed in recent years. I will concentrate my remarks today on the objectives of the bank, starting with levelling up.

Today marks the opening of the new Elizabeth line. Crossrail is a fantastic engineering achievement, and it will be an enduring tribute to our longest serving monarch. However, it serves to illustrate the gulf in infrastructure investment between the regions. In my home region of the Midlands—I note here that I am co-chair of the Midlands Engine APPG—spending on transport is £289 per head for the east Midlands and £492 in the west Midlands, compared to £882 in London. The Midlands is a region of 11 million people. In order for the Government to level up and meet the aspirations in their White Paper, these disparities will need to be addressed and vast investment funnelled into the regions. We need a Crossrail for the Midlands and north too. That is me with my begging bowl—in response to the noble Baroness, Lady Noakes.

It was very welcome to see the letter from the Chancellor on his strategic steer to the bank, as indeed were the Minister’s opening remarks. This referred specifically to

“the need to end the geographical inequality which is such a striking feature of the UK and it is important that UKIB supports this ambition.”

However, the wording in the Bill that relates to levelling up is somewhat ambiguous, referring only to supporting

“regional and local economic growth.”

My reading of this—perhaps the Minister will correct me—is that it leaves much open to interpretation. Almost any infrastructure investment anywhere in the country could be argued to support economic growth in the region or local area in which it sits. A new transport scheme in London, for example, would meet this criterion by supporting local and regional economic growth in the city.

As the Minister highlighted, the effects of agglomeration work against infrastructure spend outside of the metropolis. The economic return is simply much better in areas that already perform well, so those projects have a much better chance of proceeding. Inequality becomes entrenched and self-fulfilling. That is why the recent reforms to the Green Book were so welcome.

Given that the bank will also be working to address these areas of market failure, it is key that its mission is clear in the Bill. Wording such as “regional developments”, or references to “disadvantaged areas” or “geographical inequality” in this objective, would address this issue. I look forward to hearing from the Minister about it in her summing up and will potentially come back to it in Committee.

Secondly, the bank has an objective of helping to tackle climate change, referring to the Climate Change Act 2008. There are some great synergies between these two objectives, as other noble Lords have already pointed out. I highlight the Midlands Engine’s industry-led Ten Point Plan for Green Growth, which seeks to map out a strategy to level up the region by focusing on our strengths in low-carbon technologies and the natural capital we have in the region.

To strengthen the environmental objective of the bank, there is a great opportunity here for the Government to recognise biodiversity and nature as a specific objective in addition to net zero. To echo what the noble Lord, Lord Teverson, said, placing biodiversity on an equal stature with climate change is absolutely vital. I will not expand on this as it has already been eloquently explained by many other noble Lords. I hope the Minister recognises that this area is important enough to include in the Bill as its own separate objective.

UK Infrastructure Bank Bill [HL]

Lord Ravensdale Excerpts

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

[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to take part in this second group and to agree with pretty much everything that has been said so far.

I will speak to Amendment 15 in my name, which seeks simply to insert “nature- based solutions” in the definition of infrastructure in the Bill. For every £1 invested in peatland restoration there is a return of £4.60, and for every £1 invested in woodland there is a return of £2.80. Does my noble friend the Minister agree that in both examples that is a multiple greater than what the bank is seeking to get as set out in its aspirations?

Similarly, as has eloquently been said with regard to climate and nature-based renewal, there is an economic boon to be had if we have nature-based solutions in the Bill for the bank to clearly be able to invest in: some £50 billion for the UK economy by 2050 and, with regard to levelling up, over 100,000 jobs.

Can my noble friend say whether the bank is able to invest in infrastructure—in this instance, nature-based solutions—in UK overseas territories? A number of things can be done there. Just one example is mangrove replanting, which can have a significant impact on addressing the current climate emergency and more impact than some of the projects that can be done alongside in the United Kingdom. Can the bank invest in such infrastructure projects in UK overseas territories?

I gently point my noble friend to a report from your Lordships’ Science and Technology Committee, on which I was lucky to serve, on nature-based solutions. It clearly sets out the advantages to be had from such investments, but also the criticality, has been said across your Lordships’ House. Even if we do everything towards the reduction and eventual eradication of carbon, we must still undertake nature-based solutions. To this end, with the economic, social and environmental benefits to be had, does my noble friend agree that it makes complete sense to have nature-based solutions as part of the definition of infrastructure in the Bill?

[Lord Ravensdale (CB)]

My Lords, I shall speak to Amendment 6 in my name and start by declaring my interests as a project director and engineer with Atkins, and as a director of Peers for the Planet.

The problem we have, in my view, is that the second objective of the UK investment bank—to support local and regional economic growth—does not provide a clear policy intent for what the bank is to do in relation to levelling up. Getting these objectives right from the start is crucial. As the noble Lord, Lord Tunnicliffe, said at Second Reading,

“the most important debates will focus on the Government’s definition of infrastructure and the scope of the two core objectives. We must get these core components right from the off”—[Official Report, 24/5/22; cols. 824-5.]

As I said at Second Reading, the current wording leaves much open to interpretation. Almost any infrastructure investment anywhere in the country could be argued to support economic growth in the region or local area in which it sits. A new transport scheme in a wealthy area of Sussex, for example, would meet this criterion by supporting local and regional economic growth. There is nothing to clarify that this refers to levelling up, or to economically disadvantaged areas. I listened carefully to what the Minister had to say in response to this at Second Reading—she stated that the policy intent is clear—but I believe the Bill would benefit from setting out in more detail exactly what this goal entails, which I will come to shortly.

I briefly remind noble Lords of the issues we are facing here. The levelling-up White Paper stated:

“The UK has larger geographical differences than many other developed countries on multiple measures, including productivity, pay, educational attainment and health.”


As the Economist put it recently:

“Britain is highly geographically unequal ... It is as if America’s rust belt or the former East Germany were home to half the population.”


As an example, I took a walk through central Derby on Sunday and asked my sons to count the number of empty shop units. We counted 14 over a 200-metre stretch in the city centre, from Iron Gate to Corn Market. The only retail outlets that seemed to be thriving were betting shops—I counted five. This issue is repeated right across the Midlands region. Walking around comparable stretches in London, I see one or two empty units at most. I know the Government get this, and I am looking forward to seeing the Levelling-up and Regeneration Bill come before this House, but it emphasises that we need to make clear what is meant by levelling up in this vital legislation. Although the intent is clear from the Chancellor on his strategic steer to the bank, it needs also to be clear in the legislation. Levelling up is a long-term, generational project, so legislation supporting it must be crystal clear as to what needs to be accomplished. The strategic steer will not set policy intent over the long term; having this clear on the face of the Bill will, as the noble Baroness, Lady Hayman, powerfully argued.

My amendment is straightforward, and I also support Amendment 9 in the name of the right reverend Prelate the Bishop of St Albans and Amendment 7 in the name of the noble Baroness, Lady Bennett, to which I would have added my name had I spotted them in time; they get at the same issues as my amendment. My amendment would strengthen the current wording by referring specifically to reducing

“geographical inequality through supporting regional and local economic growth in areas of economic disadvantage”.

This, I believe, clearly captures the Government’s policy intent for this objective and ensures that the legislation will deliver in the long term for disadvantaged areas, will deliver for the levelling-up agenda, and will make a real difference to the lives of people in those left-behind communities. I would be grateful if the Minister, in her summing up, could expand on how she believes the current wording provides a clear policy intent.

I also strongly support Amendment 4 tabled by the noble Baroness, Lady Hayman. As an example, the UN has called for climate finance to be split equally between efforts to curb and adapt to climate change, but most goes towards mitigation. However, I cannot beat the Cinderella analogy from the noble Baroness, Lady Young of Old Scone. Therefore, it is right that adaption should be split out from the core emissions targets as a specific aim, and I support the words of other noble Lords on why biodiversity should be placed on an equal stature with climate change within the objectives of the bank.

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to follow the noble Lord, Lord Ravensdale, whom I thank for his expression of support for Amendment 7.

This is quite a large group of amendments addressing quite a narrow area of the Bill, but clearly this is crucially important. We are talking about the objectives of the bank. It is interesting that it has two objectives listed, one of which, looking at the amendments tabled by your Lordships, we clearly feel is too narrow, and the other of which is insufficiently clear. I will not speak at length to the many amendments here addressing and tackling adaptation, biodiversity and the nature crisis, because, as a Green, I do not need to; it has already been so clearly and explicitly said from all sides of the House that it does not need to come from me. We talk about tackling the climate emergency, but we must also tackle the nature crisis. It is a related and equal threat to the security of us all and it must be in the Bill. Also, the reference by the noble Lord, Lord Teverson, to the circular economy is interesting. I get at this in a different way, in terms of demand reduction and resource-use reduction, in the next group, so I will not go into that in depth now.

As the noble Lord, Lord Ravensdale, made clear, the second objective, to support regional and local economic growth, could mean local growth in Kensington and Chelsea or in the Sheffield constituency of Hallam, which a few years ago had the lowest rate of free school meals of any constituency in the country. The Government’s rhetoric and the discussion around this Bill says that this is supposed to be targeting disadvantaged areas, but there is nothing in the Bill which says that. Both our amendments, and the amendment tabled by the right reverend Prelate the Bishop of St Albans, seek to address this. However, mine also has an extra, intentionally radical element in that it takes out “economic growth”. Your Lordships’ House has heard me say before that we cannot have infinite growth on a finite planet and that chasing after growth is a problem. So, even if we target this on the most disadvantaged areas, which certainly need development, is it economic growth per se that they need? Who is the advantage of that growth and wealth going to?

I quote the Nobel prize-winning economist Joseph Stiglitz, who pointed out that if our measures tell us that everything is fine when really it is not, we will become complacent. Despite the increases in GDP, and despite the 2008 crisis being well behind us, everything is not fine. Growth on its own will not solve the problem of levelling up—even growth directed to those areas. We are seeing considerable moves in parts of government towards recognising this.

I note that the Office for National Statistics has a national well-being programme that has 10 broad dimensions which have been shown to matter to people. They are the natural environment; personal well-being; our relationships; health; what we do; where we live; personal finance; the economy; education and skills; and governance. Looking around the world, the EU Council has defined the economy of well-being as putting people and their well-being at the centre of policy and decision-making. I have referred before in your Lordships’ House to the New Zealand Treasury having produced well-being budgets, which operate by guidance under the living standards framework. It is about improving people’s lives, which is what so many areas of our country desperately need.

UK Infrastructure Bank Bill [HL]

Lord Ravensdale Excerpts

Report stage
Monday 4th July 2022 Lords Chamber

[Lord Ravensdale (CB)]

My Lords, Amendment 5 is in my name. I declare my interest as a project director working for Atkins and note that I am co-chair of the Midlands Engine APPG. First, I thank my supporters on this amendment; I thank the right reverend Prelate the Bishop of St Albans for all his help in crafting it, and the noble Lord, Lord Tunnicliffe, for his support. My remarks are equally applicable to Amendment 12 in the name of the noble Lord, Lord Tunnicliffe, to which I have added my name.

To briefly reiterate the issue, the current levelling-up objective of the bank, set out in Clause 2, is not clear enough to articulate the levelling-up purpose of the bank in the Bill. Indeed, I would question what the words

“support local and regional economic growth”

really add to the Bill. Almost any conceivable infrastructure investment will meet this objective for the area in which it sits.

As the Minister has previously stated, we have the strategic steer in the form of a letter from the Chancellor, which clearly sets out levelling-up objectives. However, levelling up is a long-term, generational project—as is this bank—and the strategic steer will not bind it in the long term. Ultimately, if nothing is done because of the lack of clarity in the Bill, the bank and the Government may drift away from the levelling-up purpose expressed in the strategic steer and may not undertake the vital work of helping disadvantaged areas in the long term.

This is particularly the case because the effects of agglomeration work against infrastructure spend outside the metropolis. The economic return is simply much better in areas that already perform well, so those projects have a much better chance of proceeding. Inequality becomes entrenched and self-fulfilling. That is why it is so important that, for an infrastructure bank still focused on making a return, levelling-up objectives are clear in the Bill. This can be solved via the simple amendment we have set out. It takes on board feedback from the Minister in Committee to avoid any complicated definitions of disadvantaged areas. It does this by using similar comparative wording to a recent government amendment to the Subsidy Control Act. The amendment would mean that Clause 2(3)(b) read:

“to support regional and local economic growth, with an emphasis on reducing social or economic disadvantages within the United Kingdom.”

I am very grateful to the Minister and her team for meeting me and for their efforts in investigating this issue. I know that the Minister is concerned about legal challenge and whether the wording would cause the bank to be too cautious in its approach, but this wording captures the very fundamentals of levelling up. Given the guidance for the bank in the strategic steer, all its investments should be compliant with the wording in any case, so I do not believe that this would limit the bank in any way.

Amendment 12 provides the same clarity in a slightly different way, by ensuring that the first mission in the levelling-up White Paper—the key mission of relevance for the bank—is written into the bank’s objectives. Ultimately, both amendments address the same issue: we want to be confident that there is some permanence to the bank’s objectives on levelling up and focusing on disadvantaged areas. The strategic steer and a letter to the bank do not offer this permanence, so I hope the Government will agree that something needs to be done to ensure that the bank will deliver in the long term for disadvantaged areas, deliver for the levelling-up agenda and fulfil its potential to make a real difference to the lives of people in those left behind communities all across the country.

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to follow the noble Lord, Lord Ravensdale. It was particularly useful that he spoke before me because I have taken some of the words that he and his supporters put down in their amendment but made an additional change, taking out the words “economic growth”. But I agree entirely with everything the noble Lord just said about the need to focus on reducing disparities and tackling economic and social disadvantages. As he said, that takes the wording from the Government’s own approach in another place and it would be very hard for the Government to argue against that.

I argued extensively in Committee about why economic growth as a target in its own right has failed and, indeed, is undeliverable, because you cannot have infinite growth on a finite planet. I will not go over those arguments again now, but I think it is very clear from the fact that we are back here again, after an extensive debate in Committee from all sides of your Lordships’ House, simply saying that the bank will work for regional and local growth. As was said in Committee, that could be regional and local growth in Chelsea and the wealthiest 10 wards in the whole country, which is surely not the purpose, and it therefore needs to be clarified in the Bill. As was said in our earlier debate when we were talking about the environment, we have seen acknowledgement of the need to change the Bill already. This is surely another crucial change.

I was pleased to attach my name to Amendment 12 in the name of the noble Lord, Lord Tunnicliffe, and backed by the noble Lord, Lord Ravensdale, and the noble Baroness, Lady Kramer. This is again putting levelling up in the Bill. It is what the Government say the Bill is for. Surely, it has to be specified in it.