Clause 2 - Objectives and activities

Part of UK Infrastructure Bank Bill [Lords] – in a Public Bill Committee at 10:00 am on 22 November 2022.

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Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury 10:00, 22 November 2022

The amendments would remove both the Lords amendments. Government amendment 1 would remove the addition of “nature-based solutions” and

“structures underpinning the circular economy” from the definition of infrastructure. The bank has a broad mandate with flexibility to support a wide range of projects to help to tackle climate change and to support regional and local economic growth.

On nature-based solutions, earlier this year the Government conducted a review to consider the potential of broadening the bank’s objectives to include other areas such as improving UK natural capital. The review recognised the significant potential for increased use of nature-based and hybrid infrastructure solutions, including for the water sector, greenhouse gas removal and opportunities for the growth of ecosystems services markets. Those opportunities will be important to meet our objective to leverage private finance for nature recovery.

The outcome of the review was formally made clear to the bank and to the market through the Chancellor’s non-statutory strategic steer. As we discussed earlier, that is an alternative to writing everything in statute and is more flexible. That steer clearly laid out that nature-based solutions are in scope and are something that the bank should pursue. However, given that they are already part of the remit and are clearly covered within the non-exhaustive definition of infrastructure, we do not believe this language should be retained in the Bill.

Moving on to amendment 2, clause 2(6) focuses on improving

“productivity, pay, jobs and living standards” and reducing geographic inequality. The effect of this subsection is to put a statutory duty on the bank to have regard to these two areas in relation to every potential investment that it considers, which would have significant impacts on the bank. On improving jobs specifically, we understand the intention of the provision and do not disagree with it as a general principle, but that is quite different from the individual investment evaluation.