Since joining the EU in 1973 the UK’s infrastructure has been the
beneficiary of more than €118 billion of lending from the European
Investment Bank (EIB). The UK will lose access to the EIB after
Brexit and the Government should consult on establishing a UK
infrastructure bank.
This should be explored within the Government’s
infrastructure finance review and, depending on the outcome of
this review, be part of its National Infrastructure
Strategy.
This is the main conclusion of the House of Lords EU
Financial Affairs Sub-Committee’s
report, Brexit: the European Investment
Bank, published today.
There has already been a marked decline in funding from the
EIB since the referendum and triggering of Article 50, which has
fallen 87% since 2016. Despite this, and the fact that the EIB
will completely stop supporting new UK projects after Brexit, the
Government has said little about the future relationship.
Under the Withdrawal Agreement, the UK will receive the
€3.5 billion of capital it has paid into the EIB. However, the UK
will not receive any share of the profits that the EIB has
accumulated, nor any interest or dividends. The report calls for
the Government to give taxpayers a better account of why it has
not claimed any share of this money, which could amount to €7.6
billion.
Commenting on the report, , Chair of
the EU Financial Affairs Sub-Committee, said:
“For the last 45 years the UK has relied on the European
Investment Bank to invest in all manner of vital infrastructure
projects such as Crossrail, London’s ‘Super Sewer', the expansion
of Manchester’s tram network and Scotland’s Beatrice offshore
windfarm.
“The UK’s infrastructure, and the industries that depend on
infrastructure spending, will be hurt if the Government does not
quickly find a way of plugging the funding gap that will be
created if access to the EIB is lost after Brexit.
“We’re calling on the Government to give serious and swift
consideration to the creation of a UK infrastructure bank. It
also needs to come clean about why it has not claimed any share
of the EIB’s €7.6 billion of profits.”
The EIB has been an important provider of funding for the
UK, including almost €50 billion over the last decade. It has
funded different sectors of the economy, notably in the areas of
energy, transport, water and housing. In 2015 alone, the EIB
provided £5.6 billion for 40 different projects in the UK,
amounting to approximately one third of total funding of UK
infrastructure.
More than one-quarter of the EIB's financing for the UK has
gone to the energy sector. One example of this support is the
Beatrice windfarm in Scotland, which will generate electricity
for more than 475,000 homes.
The EIB has supported some of the UK's most significant
transport projects in recent years. It has contributed to
Crossrail, London Overground and the Underground and Docklands
Light Railway extensions. It has also provided £600 million for
major road transport routes in Scotland, helped introduce new
trains on the East Coast Main Line, supported the expansion of
Greater Manchester’s Metrolink network, and provided £825 million
of funding for ports and harbours across the UK.
The EIB has financed the UK's water and sewerage systems.
In 2015 it provided a £530 million loan to support Severn Trent's
investment programme for drinking water and waste water
treatment. The EIB also backed the Thames Tideway Tunnel in 2016
with a £700 million loan.
In recent years the EIB has provided £1.5 billion to the
Affordable Housing Finance programme in partnership with The
Housing Finance Corporation, supporting the construction of
20,000 new affordable homes.
