Source · Select Committees · Treasury Committee
Recommendation 12
12
In the proposed framework for the new UK Infrastructure Bank, the Chancellor should clarify its...
Recommendation
In the proposed framework for the new UK Infrastructure Bank, the Chancellor should clarify its governance arrangements, how investment decisions will be made, and how it will ensure that it attracts sufficient private capital. In particular, it should clearly set out how the Bank will meet the Government’s commitment to Net Zero. The Government should also set out how it will incorporate lessons learned from the former Green Investment Bank, and whether it intends that the UK Infrastructure Bank should be funded to offer a lending facility at a level similar to that offered by the European Investment Bank before the UK referendum on membership of the EU. (Paragraph 95) The role of consumers
Government Response
Acknowledged
HM Government
Acknowledged
The Government has recently published a framework document setting out further detail on the UK Infrastructure Bank, including its governance arrangements, investment principles and measures to ensure consistency with its climate objectives. As part of the policy development process for the UK Infrastructure Bank, the Government has considered where it can learn lessons from domestic and international public financing institutions. This has included analysis of the Green Investment Bank and engagement with former staff. This process has helped to inform the design of the Bank and continues to be an ongoing area of consideration. The Bank will have access to £12 billion of debt and equity capital. In addition, it will also be able to issue a further £10 billion of guarantees. This is a significant commitment by Government to the new institution. We expect the Bank to be able to use this initial capital and its guarantees to crowd in private investment, to support over £40bn of infrastructure investment overall. The Bank will be able to recycle capital and reinvest returns. This will enable the Bank to scale up its balance sheet over time. The Government will also review the Bank’s progress and financial performance by Spring 2024, to ensure it has sufficient capital to deliver its ambitions. While the Bank will replace some of the functions of the European Investment Bank, it will be more targeted, more focused and better aligned with Government objectives, with a higher rate of additionality.