UK Infrastructure Bank Bill [HL] — House of Lords, 2022-05-24
Topic: Macroeconomics
Dafydd Wynne Wigley (Plaid Cymru, Centre-left to left): My Lords, I am delighted to follow the noble Baroness, Lady Bennett, and I agree with very much of what she said—although it appears I am so predictable that she was projecting what I might raise in my own contribution. However, she put forward some intriguing ideas which I hope we can explore further in Committee This is a very thin Bill, but it has significant implications when linked to earlier legislation and to government guidance over the last couple of years. When this legislation reaches the statute book, it is important that we all understand how the infrastructure bank can be best used, in partnership with relevant authorities—devolved and local—and in tandem with their strategies and initiatives. We shall clearly need to examine what opportunities might arise in relation to the central question of climate change and, equally, what dangers may lie in it, partly from having unclear demarcations of responsibility and partly from real differences of objectives and strategies to achieve those objectives, which may relate to the perceived market failures which the noble Lord, Lord Davies of Brixton, mentioned a moment ago The bank is flagged up as a replacement for the European Investment Bank. We in Wales secured considerable benefits from the EIB, which helped finance a range of projects, spanning infrastructure projects of the sort which may well fit into this bank’s objectives but also projects in the higher and further education sector and cultural and research projects. I am far from clear from reading the Bill, together with the earlier guidance documents, as to the extent to which this range of activities is one which the Government intend the bank to deliver. Perhaps the Minister could clarify that when she sums up the debate I welcome the objectives of the Bill as spelled out in Clause 2(3)(b), namely "to support regional and local economic growth." However, in doing so, what are the responsibilities on the bank to work with the grain of devolved government, regional government and local government, or can the bank launch itself in any part of these islands, following projects that may be totally at odds with the policy of local government in the area? I am aware that UK Infrastructure Bank: Policy Design, published in March 2021, in chapter 5 states explicitly that "The Bank will operate across the whole of the UK, working closely with public and private sectors to support infrastructure investment in every nation." It also states: "Building strategic relationships with the devolved administrations … will be a priority." I assume that our present Bill is intended to build on such sentiments, in line with the statement in that document in the same chapter: "The UK Government will be engaging with representatives from the devolved administrations in the next phase of the Bank’s design." Please can the Minister confirm that the provisions of the Bill before us tonight have been thoroughly discussed with the devolved Administrations, that there is agreement on the content of the Bill, and a meeting of minds as to how its powers will be rolled out and applied in practice within the devolved nations? The policy design also refers specifically to building a strategic relationship with the Development Bank of Wales. Can the Minister confirm how much work—if any—has actually taken place on this aspect, since so much that we hear places an emphasis on providing loans to local authorities? Is there a full meeting of minds between the Treasury and the Welsh Government on these matters In this regard, there may be a danger of unnecessary and unhelpful competition developing between Wales’s development bank on the one hand, which has been given responsibility for many of these functions, and, on the other hand, the infrastructure bank. I hardly need to remind the House that many of the strategic responsibilities within whose framework the UK Infrastructure Bank will work in England have in fact been devolved to Wales and Scotland, and to Northern Ireland when there is a fully functioning Government there. These include roads, planning, water, sewerage, aspects of rail transport, local government and—of course, of central relevance—environmental matters Can we be assured that in regard to its activities in Wales, the infrastructure bank will work in tandem with the Welsh Government’s strategic objectives and will neither try to undermine them nor run a competing regime, which would confuse the business sector, local government and the general public? We need clarity as to how the infrastructure bank will work with the devolved nations. Have the Government discussed the Bill’s content with the Welsh and Scottish Governments, and have they reached agreement with them regarding its implications for those two nations As always, the devil is in the detail. For example, what on earth is the meaning of Clause 2(5)? It reads—and I am selective in this quotation— "Infrastructure includes … facilities relating to … other services" Okay, I have left out a couple of words, but that is what it says. What does it mean? Those words could mean absolutely everything or nothing. The Government seem to be uncertain about what aspects of infrastructure they intend to come within the remit of the Bill. In Clause 2(6), the Treasury is given the power to change the meaning of "infrastructure" to anything in the wide world it chooses to deem as infrastructure, subject only to a statutory instrument that can so easily be steamrollered through Parliament. For example, if the bank in its wisdom decided to finance a new trunk road—heaven forbid, I hear the noble Baroness, Lady Bennett, saying—which the local authority supported for economic reasons but the Welsh or Scottish Government opposed for environmental reasons, can the Minister give a categoric assurance that the bank cannot ride roughshod over the policy of the devolved authorities? What guarantee can the Minister give that the bank, by making finance available for one set of projects but denying finance for other projects, is not undermining or distorting the power of the devolved Governments to establish their own priorities I have a question relating to the vexed issue of the building of reservoirs in Wales, such as when Liverpool drowned the Tryweryn valley in order to get a supply of industrial water which it proceeded to sell, so profiteering from the transaction. Can we have an assurance that the infrastructure bank could never be used to bankroll such a project or be associated with it unless it was agreed by the Welsh Senedd and the relevant local authority? What about housing? Does not housing form an essential part of the economic infrastructure of an area, and certainly of the social infrastructure? Does not the retrofitting of old housing stock play a major role in withstanding climate change? Is this within the purview of the bank? Please can we have clarification on whether the infrastructure bank will be entitled to provide finance for building affordable housing and improving existing housing stock, particularly in rural areas threatened by chequebook invasions of retired people who undermine local people who wish to live in their home area, as happens in Wales, Cornwall and the Lake District? There are so many questions that need to be answered if this Bill is to go forward. I am certainly not opposing this Second Reading, but the Bill needs to be clarified when we move forward to Committee. I look forward to the Minister’s response with interest.