Queen's Speech 2022 - UK Infrastructure Bank Bill

UK Infrastructure Bank Bill

“My Government will establish the UK Infrastructure Bank in legislation, with objectives to support economic growth and the delivery of net zero.”

The purpose of the Bill is to:

● Finalise the creation of the UK Infrastructure Bank by establishing it in law with clear objectives to support regional and local economic growth and deliver net zero, and ensuring it has the full range of spending and lending powers.

The main benefits of the Bill would be:

• ●  Ensuring the Bank can become fully operational and is able to utilise its £22 billion financial capacity to help grow the economy to address the cost of living and support the transition to net zero by 2050.

• ●  Providing a boost to infrastructure investment by cementing the Bank’s leading role in the market. The Bank will partner with the private sector to unlock more than £18 billion of additional investment in infrastructure.

  The main elements of the Bill are:

• ●  Enshrining the Bank’s objectives and functions in legislation to ensure that it will be a long-lasting institution with a clear policy mandate to support economic growth, including at a regional and local level, and the delivery of net zero.

• ●  Protecting the Bank’s operational independence by setting out clear accountability for how it is to be run, including reporting and board requirements.

• ●  Providing the Bank with the necessary powers to lend directly to local authorities and the Northern Ireland Executive, enabling the Bank to play a key role in delivering public sector infrastructure projects.

  Territorial extent and application

● The Bill will extend and apply across the UK.

Key facts

● The UK Infrastructure Bank is a British state-owned investment bank. It is intended to help with the Government's plan to support economic growth in regional and local sectors across the UK and reach net zero carbon by 2050.

• ●  The UK’s core infrastructure - including power, heat and transport networks - accounts for over two-thirds of UK carbon emissions. Low carbon investment must therefore scale up quickly to deliver net zero. The Bank is part of a wider infrastructure strategy aimed at addressing this shortfall and builds on the existing expertise of the National Infrastructure Commission and the Infrastructure Projects Authority.

• ●  The Bank has £22 billion of financial capacity to offer a range of financial tools, including debt, equity and guarantees. It has already undertaken several investments, including a £107 million loan to support Tees Valley Combined Authority in the redevelopment of the South Bank Quay in the Teesworks Freeport area. Once finished, this will host a GE Renewable Energy site for the manufacture of offshore wind turbines, creating around 800 jobs.

• ●  The Bank will focus on investments in under-invested areas where it can take a lead in the market and encourage more private finance into these areas. Through this focus, the Bank will partner with the private sector to unlock more than £18 billion of additional investment in infrastructure.

• ●  Infrastructure projects required to meet our objectives often do not garner the confidence or secure the finance needed from the private sector as they tend to be complex, novel and long-term. The Bank will provide the long-term policy certainty required to support the growth of key nascent industries, for example Carbon Capture, Usage and Storage which encounters many of the same problems experienced by the offshore wind industry in its early days.

• ●  Disparity in infrastructure across the country has been identified as a key driver of economic disparities. Without intervention, the private sector is likely to continue to target geographic areas which have historically received higher levels of private capital for further investment.