15:41 John Glen (Conservative)

The UK Infrastructure Bank Bill will finalise the bank’s set-up and ensure that it is a long-lasting, enduring institution. The Bill will set out its objectives to tackle climate change and support regional and local economic growth in legislation, as well as giving the bank a full range of spending and lending powers, so that it can benefit communities across the country and help the UK achieve its net zero goals. The bank is already having an impact. Since summer 2021, when the UK Infrastructure Bank became operational, 10 deals worth close to £1.1 billion have been done, including providing financing for a new £500 million fund that could double the amount of subsidy-free solar power in the UK.

When establishing the bank, we were cognisant of three specific recommendations from the NIC. First, that there would be governance to safeguard the operational independence of the bank. We will come on to it later, but one of the key purposes of the Bill is to protect exactly that. It will make it impossible for the Government to simply dissolve or sell the bank without further legislation. We will also be unable to alter its core objectives on climate change and regional and local economic growth.

Secondly, the bank should provide finance to economic infrastructure in cases of market and co-ordination failures, catalysing innovation. We all know that infra- structure projects take a long time and cost a lot of money, and I want to see more private investment in such projects. Often, however, the private sector does not provide enough finance to emerging innovative technologies that have a higher risk profile—for example, net zero technologies or those that are in areas of the UK that do not historically get financing.

With regard to the climate change objectives, significant public and private investment will be needed to achieve the UK’s infrastructure policy goals, and low-carbon investment will need to be significantly scaled up to deliver net zero. That is highlighted by the fact that the UK’s core infrastructure—power, heat and transport networks—account for more than two thirds of UK emissions. Without the bank, the private sector is likely to focus its investment on lower-risk technologies and sectors, and we will not achieve regional and local economic growth without better infrastructure in every region of the country.

Although the bank is still in its infancy, it is already taking a leading role in the clean infrastructure market. Over time, we expect the bank to catalyse new markets of infrastructure by crowding in private capital to help meet our climate change ambitions and level up across the UK. In much the same way that the EIB helped to catalyse the offshore wind market, where the UK is now a global leader, the UKIB will help to catalyse the infrastructure markets and technologies of the future.

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15:53 James Murray (Labour)

I will set out the views of the Opposition. We will not oppose the Bill today, as it seeks to put the UK Infrastructure Bank, which has been operating on an interim basis since June 2021, as we heard, on a statutory footing. We support the establishment and strengthening of the bank, and we want the new institution to play its part in tackling climate change and supporting regional and local economic growth.

Part of the reason for the Conservatives’ failure to grow the economy as it could have been growing over the last decade has been their failure to invest in the infrastructure our country needs. As we look ahead to the coming decade, investment in our country’s response to the climate emergency could not be more critical, both to protect the environment and to grow the economy.

We recognise that the UK Infrastructure Bank can play an important role in supporting essential investment. We therefore welcome the fact that one of its objectives, set out in clause 2 of the Bill, is to help tackle climate change. But setting up the bank is not enough on its own; we need a Government who will drive forward the agenda of green investment that we need. Sadly, the Government’s record makes it clear that they will fail to rise to that challenge.

The truth is that the Government and the newly appointed Prime Minister have a record of failure on investing in green infrastructure for our country and our economy. So, while we welcome the new UK Infrastructure Bank and its focus on tackling climate change, we know that no matter how well it plays its part, the British people need a Government with an effective plan to make the investment in the jobs, homes and energy supplies of the future a reality.

I have focused so far on the first of the UK Infrastructure Bank objectives set out in this legislation: helping to tackle climate change. The second of the two objectives in the legislation is also critical for the bank’s success, and is described as being

Finally, along with doing all it can to help tackle the climate crisis and to support economic growth, we believe that the UK Infrastructure Bank must also play its part in helping create good-quality jobs with decent pay and conditions. All businesses and bodies receiving public money from the UK Infrastructure Bank must have a plan to create those good jobs with decent conditions, and there must be tough contractual sanctions to make sure those commitments are honoured. To make sure the bank keeps that focus on good jobs at the heart of its approach, there must be a worker representative on its board.

However, even if we succeed in strengthening this Bill and the operation of the bank, we know the country needs far more from its Government. We need a Government who will use this bank as part of a far more ambitious plan to grow the economy, to make the transition to net-zero, and to create jobs and industries in all parts of the country.

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16:04 Richard Fuller (Conservative)

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.

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16:11 Stewart Hosie (Dundee East) (SNP)

However, I give the UK Infrastructure Bank and the Bill a broad welcome. Taking the Bill at face value, there is nothing to criticise in its objectives of helping to tackle climate change and supporting the efforts to meet the UK Government’s 2050 targets. Nor is there anything to criticise in the objective to support regional and local economic growth. What I would point out, however, is that—the Minister alluded to this—the delivery of support to facilitate local and regional growth is provided in Scotland by the Scottish Government, local government and other agencies, and that the green targets in Scotland, for example the earlier net zero target, are also set independently in Scotland. It is therefore important that the UKIB supports the devolved Governments’ objectives and does not, even inadvertently, end up working against them. That is important, because Scotland has its own infrastructure investment plan, our own global capital investment plan and our own national strategy for economic transformation that provides the framework for the Scottish Government’s policy priorities.

There is—I am sure the Minister is aware of this—clearly an overlap between the strategic objectives of the UK Infrastructure Bank and the Scottish National Investment Bank, particularly in the context of tackling climate change and supporting regional economic growth. The UKIB’s aims include:

“to help tackle climate change”

It is also vital that the creation of UKIB is not seen as an excuse to reduce further the Scottish or any other departmental or devolved Administration budget. We have already had a £1.7 billion real-terms cut since last December. However, I welcome the Bill and its strategic objectives, including tackling climate change, but it is vital that the Scottish Government’s more ambitious climate targets are reflected either in the Bill or in the way in which the bank operates.

“The Green Investment Bank is not just the government’s most lauded innovation in the war against climate change. It has kept investment in the real economy going at a time when bank lending had fallen to an all-time low. It has played a critical role in supporting the UK economic recovery.”

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16:20 Sarah Olney (Liberal Democrat)

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.

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16:24 Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)

What I really want to talk about, however, is a project that I believe falls perfectly within the UK Government’s stated aims for the new bank, namely helping to address geographical wealth inequalities within the British state and helping to tackle climate change. The Minister will be aware of the protracted discussions about the proposed Swansea Bay tidal lagoon. In 2013, plans were announced to develop the lagoon. The development received planning permission in 2015, but plans collapsed in 2018 after the UK Government decided that they could not justify a contracts for difference financing model for the scheme. Since then, new proposals for a £1.7 billion lagoon were announced in October last year. DST Innovations hopes to build the lagoon over a 12-year period as part of the wider Blue Eden scheme that will include the UK’s largest floating solar farm, 5,000 cutting-edge eco-homes and a high-technology battery factory creating 1,000 jobs. The lagoon itself aims to produce 320 million MW of electricity, and agreement has already been reached with Swansea Council for a plot of land for the battery facility.

Furthermore, the Welsh Government last month announced the creation of their own renewable energy generation company, with initial plans to develop wind technology on public land. I really welcome this policy, because my constituency houses many wind developments that are owned by the state-owned companies of other Governments, which means that the profits from the use of Welsh resources leave Carmarthenshire and leave Wales. Revenue from the new Welsh Government-owned company will be reinvested in schemes to increase energy efficiency in the Welsh housing stock, and it therefore becomes circular—another stated aim of the bank. Clearly, there is therefore scope for formal links between the UK Infrastructure Bank and the company owned by the Welsh Government.

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16:32 Bill Esterson (Labour)

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.

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.

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.

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16:41 James Cartlidge (Conservative)

I begin by saying how grateful I am to all the Members who have contributed today; it has perhaps been more a case of quality than quantity. When we talk about the funding of this important bank, it is a case of both quality and quantity. We are talking about billions of pounds of investment for two crucial priorities for this Government and this country: levelling up and net zero.

Let us be clear that that work is already under way, with the bank delivering very important projects to date, as we can see when we consider the following: £107 million for the redevelopment of the former Redcar steelworks site on Teesside, which will drive forward the offshore wind sector and create 800 jobs; 4,000 more jobs unlocked by investment in green transport in Birmingham, connecting its city centre, Solihull and Birmingham airport through a zero emissions corridor; spades already in the ground to ramp up solar and meet our energy needs, with plants opening in Newport, south Wales, and Strensham, Worcestershire; and fast, affordable and reliable broadband to 8 million homes across 285 towns and cities in England and Wales by 2025, with a further investment to deliver ultrafast broadband to businesses and households in rural Northern Ireland.

Both the hon. Members for Ealing North (James Murray) and for Sefton Central (Bill Esterson) spoke about our record. Let us be clear about something: between 1990 and 2019 our carbon dioxide emissions in this country fell by a staggering 44%—they fell by almost half. I do not think there is any other industrialised economy that can compare on that. In the same period, our economy grew by three quarters, because we can have growth and cut emissions—we are proving that. That is why the bank has the dual mission to deliver on net zero and on investing in local and regional economic growth. [Interruption.] The hon. Member for Sefton Central chunters from a sedentary position. He was critical of our efforts on offshore wind and renewables, but we have the largest capacity of offshore wind in Europe. I am proud, as the MP for South Suffolk, of the extraordinary contribution of offshore wind off East Anglia and what it is doing to drive forward this country’s journey to net zero. The difference here is that we are doing it in the real world. Let me put that in context. Renewables in 2010 made up just 7% of our total energy, whereas this year the figure was up to 43%. We have seen extraordinary growth and we should all be very proud of that.

The hon. Member for Richmond Park (Sarah Olney) made a very good point when she spoke about the sheer scale of the investment needed to deliver net zero. We in His Majesty’s Treasury are well aware of that. That is why it is so important that the funding capacity from this bank will be £22 billion, crowding in a further £18 billion. That is a huge step forward, but we know there is more to do, which is why it is important that the Bill is before the House. It is the next step in a necessary but exciting journey of transformation of infrastructure projects in our country. It will establish the bank in the market and ensure its longevity in the future.

As my right hon. Friend the Chief Secretary to the Treasury said in his opening speech, we have designed the bank to be a long-lasting institution to deliver long-term priorities and projects on which we all depend and, above all, net zero and levelling up. For that reason, I commend the Bill to the House.

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