UK Infrastructure Bank Bill [Lords]

Nigel Evans Excerpts

2nd reading
Tuesday 1st November 2022 Commons Chamber

[Richard Fuller (North East Bedfordshire) (Con)]

It is a pleasure to welcome this sensible Bill, which puts the operations of the UK Infrastructure Bank on a statutory footing. It is pleasing that the Opposition will support the Bill, but it was somewhat worrying to hear the Opposition spokesperson, the hon. Member for Ealing North (James Murray) say that the Labour party was not committed to its objectives. That will send a worrying signal to investors in infrastructure, who want to see a long-term view from both sides of the House on the plan for UK infrastructure. Perhaps he might clarify in his closing speech that Labour will commit today to make no changes whatsoever to the Bill’s objectives. It would be helpful for him to make that indication.

It is right that amendments were made to the Bill in the House of Lords to include issues to do with the circular economy and nature-based solutions. That will broaden its aspect and applicability.

In opening, my right hon. Friend the Minister referred to the European Investment Bank. It is true that the UK used to benefit significantly from investment funds coming from the EIB, but those really came to a close in 2016-17 and, as that was five or six years ago, we should be honest about the need to get the bank moving. I am not trying to push for quicker movement, but this is an opportunity to start getting to the £5 billion or £8 billion that the UK Investment Bank said was its objective in its strategic plan this summer.

I turn to crowding in, which is one of the three parts of the bank’s “triple bottom line”, as it calls it. That is absolutely the right thing. There is plenty more that we can do, and I know that the Government are focused on that. With Solvency 2 and pension fund money being made available for more infrastructure expenditure, will the Minister update the House on the Government’s thinking about that?

The City of London and the Government have made tremendous strides in promoting green finance and London as a centre for that. Again, it would be useful to hear an update from the Minister on the UK’s leadership position, which the bank could play a significant part in helping us to deliver.

One of the most important parts of the 2019 review of infrastructure finance was about how the Government can provide a reliable delivery pipeline. That means that they are clear about the projects that they wish to promote and have a timetable that paces them out over a number of years. The National Infrastructure Commission can—it does not always—do a good job of that. Perhaps we will hear more about that in the near future.

I return to the point that I put to the Minister about another part of the triple bottom line: generating

“a positive financial return”—

which it says is

“in line with the Bank’s financial framework.”

Perhaps that is the answer to why it is not in the Bill, but it would be helpful to have a little more transparency about what the financial framework would be and how it will be brought to the House for some regulatory oversight. Will that be through hearings of the Treasury Committee or other reports that may be made to the House from time to time?

That is an important factor in the UK Investment Bank’s goals and the role that it can play in helping the UK to achieve net zero. Let us be frank: when, I think, four or five years ago, the House committed to achieving net zero in a certain timeframe, there was no price tag attached. It was the biggest commitment ever made without a price tag attached for the British taxpayer. The UK Investment Bank can play a role in making sure that that price tag gets smaller and smaller. In fact, one objective the UK Infrastructure Bank says it wishes to focus on is the transition to subsidy-free models. That is absolutely essential to some key aspects of how we achieve net zero, in particular the decarbonising of home heat where we will need to attract private sector capital and long-term, patient capital. We will need the Government, through the UK Infrastructure Bank, to provide some catholic investment and, most importantly, the product structures that enable drawing in of that capital behind the most effective way, while also being able to show how we get out of the taxpayer funding it all. We cannot afford to make unfunded pledges again and again on not only this generation of taxpayers, but on future generations of taxpayers. That is why I am particularly keen on pressing the Minister and, should I be fortunate enough to sit on the Public Bill Committee, investigating further—[Interruption.] I guess that is a straight no, Mr Deputy Speaker—how we can ensure that the commitments to a positive financial return and to transitioning from subsidy-free models are given more weight in the structure of the UK Infrastructure Bank.

Finally, I draw the attention of those on the Treasury Bench to clause 4, on the power of direction. This is a familiar topic, I think, in various parts of the Treasury at the moment. I would be interested if in his winding-up speech the Minister provided us with a little more of his thoughts. There was a debate on that in the other place. It might be helpful if the Minister updated us on what further thinking there has been on the power of direction.

This is a very sensible Bill. It confirms what is already the case and I am sure it will go through the House with very great speed.

[Mr Deputy Speaker (Mr Nigel Evans)]

The Whip on duty has made a note of your enthusiastic application to sit on the Committee.

--- Later in debate ---

[Bill Esterson (Sefton Central) (Lab)]

Labour supports the creation of the UK Infrastructure Bank, and we support the Bill’s placing the bank on a statutory footing. In Committee, we will want to see changes to ensure that the bank focuses on strategically important areas, not least energy efficiency, nature-based solutions and job creation. We will also want to see changes to the governance of the bank, for example ensuring that there is a workers’ representative on the board of the bank.

This Government have a terrible record on infrastructure over the last 12 years, whether it is their cancellation of Northern Powerhouse Rail or their dismal failure to invest in renewable energy or take decisions on new nuclear. Their lack of strategy and planning was also shown when they closed the UK’s gas storage facility. Indeed, these 12 years of failure on infrastructure are central to the Conservative Government’s failures of low growth, low productivity and low investment.

Those 12 years of failure were also the prelude to the disastrous mini-Budget of 23 September. The Bank of England was forced to step in four times to support financial stability and rescue pensions, and there was criticism of the UK Government by the International Monetary Fund. Interest rates went through the roof, there was huge volatility in the pound and inflation is higher than in comparable countries. So, yes, the Conservatives crashed the economy. The result is higher mortgage payments for households, higher borrowing costs for businesses, chaos from the Government, crisis for ordinary people and crisis for the economy. The economic failure by the Conservatives has left the UK ill-prepared for the current energy crisis, pushing up bills and risking energy shortages.

A strategic approach to infrastructure is essential, and it is Labour’s industrial strategy that follows the evidence from across the economy. Unlike the Conservatives, our plan follows evidence from around the world. At the heart of our plan is Labour’s green energy plan. We will invest in the energy sources of the future. Our plan will deliver self-sufficiency in renewable energy by doubling onshore wind, trebling solar and quadrupling offshore wind, all supported by the creation of a publicly owned “Great British Energy” company. Our plan will create half a million jobs in renewable energy and a further half a million jobs in insulating 19 million homes over 10 years. Our plan will invest in the technologies and industries of the future, from EV charging points, supporting a burgeoning electric car industry, to clean steel and developing shorter, more resilient supply chains. Our plan will create jobs, cut bills and deliver energy security, and it will transform our prospects after 12 years of economic failure by this Government.

The UK Infrastructure Bank has to take a long-term view in the national interest. So what is the Government’s record? The sale of the green investment bank to private equity, yesterday’s distressing news about Britishvolt and the failure of the green homes grant scheme—all mentioned by my hon. Friend the Member for Ealing North (James Murray) and all examples of where the UK Infrastructure Bank could do so much better to ensure a greater chance of success with the right strategic mandate.

What should be the approach of the UK Infrastructure Bank? Labour’s industrial strategy will deliver prosperity through partnership: the Government working with business and trade unions to create thriving businesses, prosperous workers and successful communities that benefit from investment in the whole country and from a strategy that supports the everyday economy as well as those in advanced manufacturing. The question for this Government is whether their approach to the UK Infrastructure Bank matches the scale of our ambition.

It is worrying that, just last week, the Prime Minister answered a question about onshore wind by talking about offshore wind. I wonder whether he understands the difference. His refusal to end the moratorium on onshore wind is telling, and it certainly is not an indication that this Government intend to make a bold, ambitious commitment to benefiting from the opportunities of a low-carbon economy. A good test of whether this Government really are committed to infrastructure investment is whether the new bank will deliver the decarbonisation we need and whether it will enable this country not just to survive but to thrive, by making the most of the massive economic opportunities available from the energy transition.

We have exciting technologies in wind, solar, tidal, carbon capture and storage, nuclear and hydrogen. Will the bank give investors the confidence they need to develop the benefits for our domestic economy and for export markets, too? So far, the bank has faced criticism for following the market rather than setting new strategic priorities for big infrastructure projects. Will the bank really support local and regional economic growth? After 12 years of failure, people can be forgiven for being somewhat sceptical.

An industrial strategy is a partnership between Government, employers and workers. In government, we enshrined partnership working in the Olympic Delivery Authority to ensure good local jobs, and to ensure that those jobs were central to the construction of Olympic facilities. We set up the Automotive Council with employers and trade unions to protect local jobs. We will be pursuing amendments in Committee to enshrine a commitment to local jobs in the bank’s remit, and we will push for worker representation on the board. That is the recommendation of E3G, which says that a diverse representation includes workers. Partnership in a successful economic and industrial strategy depends on worker representation. We will follow the evidence in our approach. Our amendments in Committee will push this Government to do so, too. Labour’s approach to infrastructure and industrial strategy is through partnership. We recognise that success will follow when Government work with business and with workers.

Investing in infrastructure in a low-carbon future can deliver across the country, not least because of how the exciting opportunities are geographically spread. It can deliver prosperity in every community. The jobs in insulating 19 million homes will, by definition, be created in every community, especially in those with the poorest housing stock, which are those with the greatest need of good jobs as well as warmer homes. We can transform our prospects at home and through the export potential of new technologies. But the bank has to be on a sound footing, alongside a strategy and with objectives that are consistent with the way the bank is set up. We support the creation of the bank. It is a great way for us to implement our plans in government. It is a great way to give businesses and investors certainty. It is a great way of offering prosperity to communities through the creation of new jobs. But the bank has to be allowed to be ambitious, to push for new opportunities and to set the market, not just follow it. That is what an industrial strategy does. It is what Government can contribute to as a partner, where business would otherwise struggle to attract investment. It is also how to transform our economy, our country and our communities.

[Mr Deputy Speaker (Mr Nigel Evans)]

I welcome the Minister back to the Dispatch Box.