UK Infrastructure Bank Bill [HL]

Lord Sarfraz Excerpts

2nd reading
Tuesday 24th May 2022 Lords Chamber

[Lord Sarfraz (Con)]

My Lords, I agree with all that has been said by noble Lords today and I am grateful to my noble friend the Minister for hosting a very useful briefing yesterday. The bank has made its first six investments, two of which are in infrastructure funds managed by third parties. It would be very helpful to get a sense of how much direct investing, versus fund investing, the bank intends to do. Your Lordships will remember how the CDC—now British International Investment—changed its investment strategy several times between direct investing and fund investing; it would be helpful to understand what lessons the Government have learned from that experience.

There are many specific questions around the bank’s overall investment strategy: deal sizes, deal types, allocation by stage and geography, and value added after investment. All this is be made clear in the bank’s strategic plan, which we have not yet seen and is to be published in June, but I hope that my noble friend will consider sharing more specific detail on the bank’s investment strategy before Committee. For example, the bank has held consultations with over 100 organisations; it would be useful to see a summary of the findings if one is available.

Meanwhile, I have two very specific concerns. The bank’s big strategic objective is to help to tackle climate change. This is a wonderful thing but it is important to be clear what methodology, techniques and standards the bank will use to measure its impact. Perhaps the Minister can address this point.

Secondly, as the noble Lord, Lord Teverson, said, Clause 9 means that it is entirely possible that, in 17 years, the bank’s shareholder will have reviewed its performance only twice. That is just incredible. I do not know of any individual company, foundation or endowment—not anyone—who would conduct such infrequent reviews of their investments. If this was a private bank, its shareholders would demand a lot more in terms of reporting. There is no reason why the Government should not do so as well.