New UK Infrastructure Bank to be permanent, says Government

Legislation will be brought forward to put the new UK Infrastructure Bank on a statutory footing.

Infrastructure Bank (PA Wire)

The Chancellor’s new UK infrastructure bank will be a permanent fixture to help tackle climate change and to support local and regional economic growth, the Government has confirmed.

Legislation is set to be brought forward to put Britain’s first national infrastructure bank – opened by the Chancellor in Leeds last week – on a statutory footing to ensure it remains a long-term public institution.

It comes in response to recommendations in a report by the Environmental Audit Committee which sought assurances the infrastructure bank would not end up being offloaded like the Green Investment Bank – the Government’s previous attempt to kickstart the green economy.

This response today to our inquiry misses the opportunity to address several quick wins

Philip Dunne, Environmental Audit Committee

The Government said: “At Budget, the Government set out within the UK Infrastructure Bank policy design document its intention to set up the bank so that it remains as part of the public sector, fulfilling its role in supporting investment, permanently.

“The Government will bring forward legislation as soon as the parliamentary timetable allows to put the bank on a statutory footing.”

It added it would “review the case” for broadening the bank’s remit to include other areas, such as improving the UK’s natural capital.

But the committee of MPs said the response failed to engage with its arguments around road building or nature recovery networks.

It had called on the Government to ensure the nature recovery network that the Government has promised is not an “afterthought”.

The Government also rejected some of the committee’s other proposals, including a VAT reduction to boost green sectors, citing the costs of such a move.

Philip Dunne chairman of the Environmental Audit Committee, said: “This response today to our inquiry misses the opportunity to address several quick wins.

“VAT reductions to spur consumers to make green improvements to their homes could have provided a welcome boost, as would putting more investment in championing nature recovery.

“Our committee does, however, welcome the Government’s pledge to review the case including nature recovery projects in the National Infrastructure Bank’s remit. Our nation’s natural capital deserves investment too.”

The infrastructure bank aims to unlock more than £40 billion of investment in the UK.

It will be able to buy £5 billion of equity in UK infrastructure project and lend £7 billion and guarantee loans of £10 billion as well.

It will initially start with loans, equity and guarantees to private businesses before starting to lend to local authorities later this summer.