UK Infrastructure Bank Bill [HL]

Lord Sentamu Excerpts

Report stage
Monday 4th July 2022 Lords Chamber

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I will speak to two sets of amendments. Before doing so, I thank the noble Lords, Lord Vaux and Lord Wigley, and the noble Baroness, Lady Kramer, for their support in the drafting of the amendments and for co-signing them. They fall into two distinct categories.

The first group, Amendments 14 to 17, relates to Clause 3. They are intended solely to deal with the framework document, about which we have had many discussions today and on various occasions. There is one in existence, but it is now more than a year old. That document needs to be brought in line with the other governing documents of the bank. It seems clear that, if you are to govern a bank properly, effectively and efficiently, its governing documents must be got right.

One of the problems with the framework document is that it is not clear what it is. Is it a very mundane document—I hate to use the word, but I think it is right—that deals with ordinary day-to-day activities or a much more important document, as the Minister suggested earlier in the debate, which might be used to fine-tune the way the bank will work or the objectives it is to be set?

Is it legally binding? Without seeing the document that will operate in the course of the bank’s governance, it is quite impossible to say, unless there is a clause which says that it is not legally binding. If it is not legally binding, unless it deals with day-to-day matters such as meetings, there may be no problem, but which is it?

Is it consistent with the Bill and the clauses that will be inserted into the strategic priorities? The present document is quite clear; it contains provisions that are redundant, such as those relating to the objectives and the appointment of directors, because they have been overtaken. The purpose of this amendment is to press the Government to be clear about what may or may not be an important part of the governance of the bank. I intend to say no more about that group of amendments.

Amendment 21 is a much more important amendment and goes to a constitutional point. Economic development is a devolved issue. It is not a straightforward one, because the government Acts of Scotland, Wales and Northern Ireland contain extensive reservations on aspects of economic development, as one would expect. One would expect that, ordinarily, the Governments of the devolved constituent parts of the United Kingdom and the Government of the United Kingdom would work closely together on so important an institution as the UK Infrastructure Bank. The Bill ought to reflect a properly organised structure, so that there is consultation and the views expressed by the devolved Governments are taken into account on consultation.

It is useful to look to Germany. KfW has one of the most successful track records in the world on the operation of an investment bank; 80% of it is owned by the federal Government and 20% by the Länder. It therefore has an institutional structure.

In the UK—I do not make any point about what has been decided—this is 100% owned by HM Treasury. Given the need for co-operation, particularly with the Welsh development bank and the equivalent development bank in Scotland, we ought to be clearer in the Bill that there should be appropriate consultation on its key features. I accept that the strategic plan put forward by the bank makes some mention of working in co-operation. Indeed, it mentions Wales or the Welsh six times, and Scotland gets a bit more as it is mentioned eight times, but Northern Ireland gets a bit less as it is mentioned only twice. But when one looks at the analysis of what is there, there is nothing of any real substance on which the Governments of the devolved constituent parts of the United Kingdom can get any comfort.

The Bill needs a legislative consent Motion. Another important feature is that we ought to recall the Sewel convention; we ought to be concerned at the number of instances where there is no consent. We are gradually moving away from the concept of “not normally” legislating the areas of devolved matters without the consent of the devolved legislatures. In this area, that is a very important point. Therefore, this amendment is put forward to provide a mechanism for consultation on three critical areas, and this inclusion should check and institutionalise in the Bill a structure for proper consultation in relation to the three most important functions of the Government on it: the ability to amend by regulation; the ability to appoint directors; and the creation of the statement of strategic priorities.

Given the current circumstances—and the real need to hold the union together—I hope that this amendment could be one which the Government would readily accept. Consultation is not going very far. One could put forward a clause which went much further, and I very much hope that the Government will look favourably on this proposed new clause, but I shall listen carefully to what the Minister has to say and, in light of that, consider whether I would seek to test the opinion of the House on this provision.

[Lord Sentamu (CB)]

My Lords, I have been in your Lordships’ House since 2005 and one of the things that has always surprised me, having come from another part of the Commonwealth, is the way in which secondary legislation—statutory instruments and regulations—has grown like Topsy. Secretary of States are always accountable to Parliament and, if you give power away, some people never want it to be brought back. The Bill is an innovation. The noble Baroness, Lady Kramer, was right that we do not want to simply put things back into the systems of other banks, and this is a risky bank. It will go into areas where hitherto nobody has gone.

I speak only to Amendment 13, which seeks to provide Parliament with the opportunity for enhanced scrutiny of the regulations made under this section. That is all it is doing: Parliament must not just pass a law and allow the Secretary of State the power to make regulations and statutory instruments which then cannot be clearly watched. I have always believed that good law is good law—no one should be frightened of any good law. Therefore, the Secretary of State must not see this affirmative action as a hindrance of their function and their work. No, it is simply enhancing the scrutiny of regulations made under this section. I urge those who tabled this wonderful amendment to stick with it and not just give it away.