UK Infrastructure Bank Bill [Lords]

Sarah Olney Excerpts

2nd reading
Tuesday 1st November 2022 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

I welcome the Chief Secretary back to the Dispatch Box; it is genuinely a pleasure to see him back. It is quite ironic that we are here today to discuss setting up or reinstating something that was previously working well, because that rather mirrors his career. As has been mentioned, we had a green investment bank—it was a Liberal Democrat creation during the coalition Government years—and what we are really doing is setting it up again. It was sold off to the private sector, as the right hon. Member for Dundee East (Stewart Hosie) mentioned, and it made £144 million in profit for its new Australian owners last year, which just goes to show what an important role is being played by our funding partners for our climate change objectives.

The Liberal Democrats believe that it was a short-sighted move to sell off the green investment bank in the first place, so we very much welcome this Bill to set up something similar again. However, we worry that it might be too little and too late to make a real impact. Over the past seven years, numerous opportunities will have been missed to make substantial investments that could have made a real difference in progressing towards our net zero targets.

One of our big concerns is that the infrastructure finance that will be made available through the bank is very small in comparison with the challenges that we face with climate change and with levelling up. The bank will therefore need to mobilise a huge volume of private finance to meet the Government’s infrastructure goals and international climate goals. The bank has £22 billion of financial capacity over the next five years, but the Institute of Chartered Accountants has estimated that we will need £40 billion of investment per year to deliver net zero by 2050, and the Office for Budget Responsibility has projected that £1.4 trillion of investment will be needed by 2050 to deliver our climate change objectives. We really need the bank to be a success and mobilise those funds if we are to honour our climate commitments.

The Bill rightly identifies tackling climate change and achieving net zero as its strategic objectives, alongside supporting regional and local economic growth. However, as Liberal Democrat colleagues in the Lords have expressed, there is a need for a joined-up approach to protecting our environment, with biodiversity included as an objective alongside climate change. Since the Government sold off the green investment bank, the markets have failed to deliver on developing floating offshore wind, electric vehicle charging infrastructure, marine and tidal energy, broadband roll-out, carbon capture and storage or insulation—there is such a long list. So many green technologies could have been supported via the continuation of the green investment bank.

We want more ambition from the Government on the green agenda. We would like to see net zero achieved by 2045 rather than 2050, with a proper green industrial strategy so that we have a long-term plan in place. We want bold action to fire up net zero, from new targets for zero-carbon flight to new industrial strategies for hydrogen and power cabling and a major restructuring of the UK economic model to ensure that it is fit for the future.

To achieve climate targets, we need to limit warming to 1.5° by 2030. I welcome the Government’s concession in the other place that they will include investment in energy efficiency in the bank’s remit, as they have repeatedly failed to decarbonise our housing stock and take steps to reduce fuel poverty, but it is important to remember that effective investment requires much more than making money available. We need to ensure that finance is channelled into developing the skills needed to enable a green transition and help British businesses to become global leaders in key future technologies.

In 2012, the green investment bank was created. Ten years later, we are starting again, but the Liberal Democrats wish the project well. We want the Bill to proceed swiftly through the Commons and the bank to be successful.