UK Infrastructure Bank Bill [HL] Commons Amendments 17:42:00 Motion
on Amendments 1 and 2 Moved by Baroness Penn That this House do
agree with the Commons in their Amendments 1 and 2. The
Parliamentary Secretary, HM Treasury (Baroness Penn) (Con) My
Lords, with the leave of the House, I shall speak also to the other
amendments and that in the name of the noble Baroness, Lady Hayman.
I start with Commons Amendment 2. As was noted in the
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UK Infrastructure Bank
Bill [HL]
Commons Amendments
17:42:00
Motion on Amendments 1 and 2
Moved by
That this House do agree with the Commons in their Amendments 1
and 2.
The Parliamentary Secretary, HM Treasury () (Con)
My Lords, with the leave of the House, I shall speak also to the
other amendments and that in the name of the noble Baroness, Lady
Hayman.
I start with Commons Amendment 2. As was noted in the other
place, the Government agree that the bank will make it a
stipulation that any investment into the water sector must be in
line with the company having an appropriate plan and making
sufficient progress against that plan to deal with sewage
discharges. However, I want to make it clear that in this
circumstance the word “preventing” is aimed principally at
preventing harmful discharges and does not mean eliminating all
discharges. I want to make this distinction in the House because
I do not want the bank to be prevented by fear of legal action
from investing in water companies which have a plan in place to
meet their obligations.
I reassure the House that the Government are already taking major
steps to improve water quality. We have announced legally binding
targets on water quality under the Environment Act and ambitious
interim targets to deliver these in our environmental improvement
plan.
This Government have also implemented the strictest ever targets
to crack down on poor water company performance. On sewage
spills, our storm overflows plan requires companies to deliver
the largest ever environmental infrastructure investment—£56
billion over 25 years. Where water companies are found to have
broken the law and face fines for this behaviour, this Government
have committed to reinvest those fines directly back into schemes
to improve our water environment.
Commons Amendment 3 removes the Lords amendment to include
nature-based solutions and the circular economy in the definition
of infrastructure. As noble Lords will recall, we debated this
issue extensively in this House and it came up frequently in the
Commons. At the time, I noted that nature-based solutions were
already included under the inclusive definition of infrastructure
and, as such, we did not think it necessary to add it explicitly
in the Bill. The Government have reflected on the debate and
recognise the strength of feeling on the matter and, as such,
think the amendment from the noble Baroness, Lady Hayman, strikes
a careful balance of making it clear that nature-based solutions
are within the bank’s remit without being overly
prescriptive.
The Government agree with the removal of the circular economy
from the definition. We do not think including the circular
economy—which is an imprecise term—in the definition of
infrastructure would be helpful for the bank. However, I thank
all noble Lords, and in particular the noble Lord, , for raising this issue
during the passage of the Bill. We reassure them that the
circular economy is an incredibly important principle and will be
key as we transition to a more sustainable economy in a number of
sectors. While we do not wish to expand the scope of the bank, I
reassure the noble Lord that several of the areas highlighted in
the debate on the circular economy are covered within its
existing remit and objectives; for example, nature-based
solutions, waste and energy efficiency, as was clarified in an
earlier amendment to the Bill. I therefore anticipate that the
bank will invest in and be a key proponent of a circular economy
wherever it is in line with the overall objectives.
Commons Amendment 4 removes subsection (6) from Clause 2 of the
Bill. The subsection included the wording “have regard to”, but
this would still have had a significant impact on the bank. For
example, on improving jobs, we understand the intention of the
amendment and do not disagree with it as a general principle.
However, we are concerned that there may be consequences if the
principle were to be applied across the board as a statutory
requirement in relation to every investment proposal. It could
lead to the bank being overly cautious for fear of legal
challenge.
The second part of this subsection, on reducing regional
inequality, is also of concern. We do not want the bank to be
under a statutory duty to consider regional disparities in the
same way in relation to every investment proposal that comes
before it. The strategic steer makes it clear that the bank must
focus on geographic inequalities. However, this is best done on a
portfolio basis rather than investment by investment, which would
be required by the proposed amendment.
Although the Government agree with the Commons amendment, we
recognise the concern of the House, and I pay tribute to the work
of the noble Lord, , on this matter. I recommit to
this House that after the Bill achieves Royal Assent the
Government will amend the bank’s framework document to provide
clarity on the role on the bank in levelling up the United
Kingdom. We will include under the operating principles the
wording:
“The bank will also address the spatial disparities across and
within UK regions.”
This is in addition to the wording already in the framework
document under its second objective:
“to support regional and local economic growth through better
connectedness, opportunities for new jobs and higher levels of
productivity”.
Commons Amendments 5, 6, and 9 concern provisions to add a duty
to consult relevant Ministers in the devolved Administrations on
the use of delegated legislative powers in the Bill, including
the power to amend the bank’s activities or the definition of
“infrastructure”, and to issue the strategic steer. Commons
Amendment 7 is related and sets out a requirement for UKIB’s
board to appoint one or more directors to be responsible for
ensuring that the interests of the devolved Administrations are
considered in the board’s decision-making. These amendments have
come as a direct result of positive engagement we have had with
the devolved Administrations, and I am pleased to say we have
received legislative consent Motions from the Welsh and Scottish
legislatures. Unfortunately, given that the Executive have not
formed, it was not possible to get a legislative consent Motion
from the Northern Ireland Assembly.
Given we are on the subject of the board of directors, I know
that the noble Lord, , was interested in whether the
bank would appoint a workers’ representative to the board. I
reassure him that the bank is abiding with the requirements of
the corporate governance code and has appointed a non-executive
director, Marianne Økland, to facilitate engagement with the
workforce.
Commons Amendment 8 reduces the time period for statutory reviews
of the bank following the first such review from seven to five
years. This balance reflects the fact that we need to allow a
nascent institution time to embed and fully establish itself in
the market, which is why the first review will take place after
seven years. However, subsequent statutory reviews will take
place every five years to ensure proper scrutiny of the bank’s
performance.
Commons Amendments 1 and 10 are of a technical nature and broaden
the definition of “public authority” in relation to the bank’s
capacity to lend. The drafting as is broadly meets the policy
aims and would allow the bank to lend to local authorities and
the Northern Ireland Executive. However, given that primary
legislation can be something of a blunt instrument, we do not
want inadvertently and by implication to preclude the bank from
lending to other public authorities, such as any public bodies
created by local authorities or government departments in
future.
Finally, as is standard for a Bill that starts in the Lords and
concerns matters of public finance, a privilege amendment was
passed. Commons Amendment 11 removed this.
The Government have listened to concerns in both Houses and have
made changes to improve the Bill. I look forward to the debate
and hope that noble Lords will accept these amendments. I beg to
move.
(CB)
I declare my interest as co-chair of Peers for the Planet and
rise to speak to my Motion 3A, which as the Minister said would
reintroduce nature-based solutions into the definition of
infrastructure in which the UK Infrastructure Bank may
invest.
We had some very helpful conversations after Report and the
debates in the other place, and I think we have now reached a
highly satisfactory position on this amendment, in no small part
due to the Minister’s customary constructive approach to the
debates that have taken place in this House, for which I am very
grateful.
Of course, the original amendment included the “circular
economy”, and I know that there will be some disappointment that
that is not included now, but the bank’s strategy is reassuring
on that issue. Anyone who listened to the item on the “Today”
programme this morning about data centres using the heat they
normally have to dispose of to heat up the water in local
swimming pools will have heard a lovely example of how we need to
put those sorts of issues together.
I thank all the Members of this House who have taken part in the
debates, and in particular those who signed the various
iterations of my amendment, including the noble Lord, , the noble
Baroness, Lady Jones of Whitchurch, and the noble Lord, . This amendment has had
significant cross-party support because of the increased
recognition that nature-based solutions have a critical role to
play in the fulfilment of the bank’s objectives. The Chancellor’s
strategic steer in 2022 encouraged the bank to
“explore early opportunities in nature-based solutions”
and aim to have
“a positive impact on the development of the market”.
The bank has since published a discussion paper setting out its
initial thinking on how it can invest in and support the growth
of natural capital markets, and I look forward to the results of
this consultation.
The discussion paper clearly explains the importance of natural
capital as a form of infrastructure and the vital contributions
it makes to our society and economy, often in ways which are more
cost-effective to the taxpayer. Carbon removals through creating
and restoring woodlands, wetlands and peatlands, flood mitigation
measures, providing “clean and reliable” water supplies,
underpinning our food security and bolstering our resilience to
climate change: these constitute numerous examples of how we can
deploy nature-based solutions to support our infrastructure and
provide social, economic and environmental benefits. There is
also an ever-increasing recognition of the key role that nature
can play in solving climate change, nature being our biggest
asset with which to fight it. Nature-based solutions also provide
significant co-benefits, such as jobs and good health and
well-being outcomes, with considerable economic advantages.
I welcome that the UK is leading on the Taskforce on
Nature-related Financial Disclosures, but there is an average
$700 billion funding gap for protecting and restoring nature
globally, and evidence that more needs to be done to help market
participants mainstream and scale these products alongside
growing investor demand. This simple addition to the definition
of infrastructure in the Bill sends a strong signal to the
markets that the UK recognises this and the Government are
serious about taking action to help build and develop this
nascent market. It also provides certainty to the bank, which
recognises that it has a role in developing capacity towards a
pipeline of investable projects and is poised to act. It will
encourage others to do the same and further develop the UK
finance sector’s position as a leader in this important emerging
new market.
As I said, I am very grateful to the Minister and her officials
for the support they have given and the resolution that I think
we have reached.
(Con)
I support the noble Baroness, Lady Hayman, in her proposed
amendment and congratulate her on her tenacity in pursuing this
issue. She has achieved something notable, and I thank her very
much indeed. Account being taken of nature-based solutions
improves the Bill and, on that basis, I also congratulate the
Minister. My noble friend has proved herself to be a listening
Minister, and the Government have taken a very common-sense
approach, which improves the Bill. It was previously a good Bill,
and it is now a better Bill after changes made in this House and
the approach of the Minister and the Government.
I do not propose to detain the House, except to say that I agree
with much of what the noble Lord, , said in Committee and at
Second Reading. I regret that we have not gone a bit further, but
at least we have an improvement in this legislation. On that
basis, I once again congratulate the Government.
(GP)
My Lords, I join in the congratulations to the noble Baroness,
Lady Hayman, who is both a force for nature and a force of nature
in your Lordships’ House. I thank everyone else who has joined in
getting this progress on nature-based solutions, although we
should not look at those solutions as an alternative to cutting
our carbon emissions. Both those things have to be done.
I was not going to speak but, given something the Minister said
in her introduction, I feel forced to ask her a question. In
justifying the exclusion of “circular economy” in the Commons
amendment, she said that it was “not a precise term”. Does the
Treasury understand the term “circular economy” and its essential
nature in delivering the sustainable society we need? If the
Minister wants a source for this, I point to a government paper
entitled, Circular Economy Package policy statement, from 30 July
2020, which was put out jointly with Wales, Scotland and Northern
Ireland and which defined “circular economy” as
“keeping resources in use as long as possible, extracting maximum
value from them, minimizing waste and promoting resource
efficiency”.
Will the Minister confirm that the Treasury recognises that the
circular economy is an acknowledged term and is urgently
needed?
(CB)
My Lords, I wanted to thank the Government and to associate
myself with the words of the noble Baroness, Lady Hayman. I thank
them for their constructive engagement, which has allowed us to
reach a satisfactory conclusion.
However, I thank the Government for listening in relation to a
couple of other places. First, during the progress of the Bill
through this House we had a lot of discussions about the position
of the devolved Administrations and how they should be involved.
While they have not gone as far as I should have liked, I welcome
the amendments that have now been included and the constructive
engagement that has obviously taken place with the devolved
Administrations. That is a nice change from some of the things
that we have seen with other legislation in the past.
Secondly, Amendment 8 is identical to an amendment that I tabled
on Report, which shortens the reporting cycle to five years. My
amendment was not accepted by the Government at that time. When I
tabled it, it led to what I think was a unique achievement of
being co-signed by both the noble Baroness, Lady Noakes, and the
noble Baroness, Lady Bennett of Manor Castle. That has not been
achieved before or since. I said at the time that such a unique
and powerful alliance should make the Government take that
amendment seriously, so I am delighted and grateful that they
have done so.
18:00:00
(LD)
My Lords, I have to admit, although I should not, that when I saw
the Bill appear on Forthcoming Business I thought that it had
received Royal Assent about a year ago, that it had gone and that
everyone was happy. Clearly, the other place was not quite happy,
so we are debating the Bill today. I am delighted to see the
noble Baroness, Lady Neville-Rolfe, here because this morning I
was at a meeting of the Green Investment Group—the privatised
Green Investment Bank—as a watchdog on its purposes after
privatisation. I hope that this infrastructure bank will not also
be privatised in the next couple of years and we have to do the
same for it.
I welcome the House of Commons amendment around water companies,
moved by my honourable friend . Although the noble
Baroness the Minister has circumscribed the effect of that
amendment, I am delighted that the Government have accepted it.
We all understand that water companies are under extreme
scrutiny, mainly for their lack of investment and focus on
environmental concerns under their custody. Equally, I welcome
the amendment of the noble Baroness, Lady Hayman, and I too join
the congratulations on her tenacity in getting it accepted by the
Government.
However, I also thank the Minister for her persuasive powers. I
have said to her in the past that I should prefer her to be in
another portfolio that I deal with even more, on which this House
seems to be less persuasive on occasions. Yet she manages to
persuade the Treasury, which is probably an even harder task,
that sometimes this House can make some useful changes to the
legislation before it.
I will not detain the House further, except to welcome these
amendments, and hope that we can put the Bill to bed and that the
UK Infrastructure Bank can get on and do what we all want it to
do—invest in the future infrastructure of this economy in the
wider sense, including the circular economy. I am grateful for
the mention from the noble Lord, Lord Bourne, and I understand
from the Minister that most of the circular economy will indeed
be accessible by the bank. I look forward to that as well.
(Lab)
My Lords, I thank the Minister, both for her introduction today
and for a helpful briefing held last week. When your Lordships’
House considered the Bill in the first half of last year, we were
told that passing it should be a mere formality. The UK
Infrastructure Bank was already operating, having made its first
handful of investment decisions. The Bill was therefore
essentially a technical exercise to give the organisation
statutory underpinning. The Government resisted several sensible
amendments, including one on worker representation on the bank’s
board, partly on the basis that this legislation needed to be on
the statute book quickly. I pause to note that the inclusion of a
non-executive director at least moves in that direction. I thank
the Minister, as I do for everywhere in the Bill where she has
persuaded the Government to seek compromise.
However, in reality, it took some time for the Bill to get
through the other place. The legislation having been introduced
last July, Second Reading did not take place until November and
Report not until last month. The delay was presumably the result
of the Conservative Party’s summer of chaos, with a succession of
Prime Ministers and Chancellors of the Exchequer, and—if I
remember correctly—a short period when the noble Baroness was not
a Minister on this subject. We are back to our familiar form. The
extra time has seemingly allowed Ministers to reflect, in some
areas at least, as evidenced by the various Commons amendments
that we are debating today.
We welcome the clarifications around the definition of “public
authorities” and the importance of costed plans should UKIB funds
be used to support the work of water companies. The devolved
provisions, which have facilitated the passing of legislative
consent Motions—something of a novelty in recent years—are also
welcome. We are also glad that the Minister and the Bill team
have been persuaded of the merits of including nature-based
solutions in the definition of infrastructure.
The noble Baroness, Lady Hayman, made a persuasive argument but,
as we have often seen, that does not always lead to the
Government making a concession. I pause again, however, to note,
as happens with so many Bills, the extent to which she and her
supporters are making incremental progress in embracing the green
thrust. Even now, I have a bit of optimism that we might move
quickly enough to save at least some of the planet that we now
enjoy. It is good to see that thrust building on both sides of
the House. I hope that in a couple of years the sides will change
but, if one has that general direction in the membership and on
the Front Benches, it is possible that we will get there. In
another two years we may be passing green amendments that will
amaze us when we look back five years, at when some official or
other said, “You can’t put green in there because it is nothing
to do with the Bill”. We have put green in here and have
persuaded people that it is something to do with the Bill.
I understand the disappointment of the noble Lord, , with regard to the circular
economy, but that concept will become ever more apparent and he
will no doubt have other opportunities to promote it.
I regret that the Government have overturned my amendment.
Colleagues may think, “You would say that, wouldn’t you?”, but I
remain unconvinced of the Government’s reasoning for removing
their own levelling- up mission from the Bill. I reluctantly
accept the offer to make changes to the bank’s framework document
and articles of association after the Bill receives Royal Assent.
It is not exactly where we want to be but it is a small step in
the right direction.
Finally, we gladly accept the reduction of the interval between
reports on the bank’s effectiveness. I was somewhat amused by
this, as we were previously told that an interval of five years
was simply not practical and could even somehow undermine the
bank’s work.
Overall, while the Bill is a short, technical piece of
legislation, the UK Infrastructure Bank could make a significant
contribution to some of the big challenges that we face. We fully
support the bank and, while there may be cause to revisit its
mandate in the future, we wish it well in its work. Again we
thank the Minister for her co-operation in bringing us to this
consensus position.
(Con)
My Lords, the Bill is mercifully short, so I shall also keep my
remarks brief. I thank all noble Lords who have spoken today and
who contributed when we took the Bill through its substantive
stages in this House a while back. I reassure them that the time
it has taken for the Bill to progress is not unusual: I was
working on the skills Bill in this House, went off on maternity
leave and was back in time for ping-pong, so it is not
necessarily an unusual passage for a Bill in Parliament.
I reassure the noble Baroness, Lady Bennett, that the Government
are committed to moving towards a more circular economy which
will see us keeping resources in use as long as possible,
extracting maximum value from them, minimising waste and
promoting resource efficiency. I hope I made that clear in my
opening remarks. When it came to including a legal definition of
“infrastructure” in the Bill, that is where my remarks about the
potentially imprecise nature of the terms lay, but it does not
reflect a broader lack of understanding or commitment by the
Government to that agenda.
I also reassure the noble Lord, , that His Majesty’s Treasury
is very much committed to ensuring that nature and climate change
are on the agenda for the Government and that we meet our global
goals, committed to both in terms of Paris alignment and the new
framework agreed at COP 15 in Montreal at the end of last year.
He knows better than most that we published the Dasgupta review
that looked at the role of nature in our economy. We have had an
amendment to the Bill today, and that commitment will be
ongoing.
Most noble Lords were very kind in not replaying my words on the
review period for the bank. All I can say is that it is always a
pleasure to listen to the contributions of noble Lords and be
persuaded of the art of the possible. I am pleased with the
changes that we have been able to make to the Bill; I think these
have shown how effective Parliament can be in scrutinising our
legislation. The UK Infrastructure Bank has transformative
potential, which I know is recognised and supported on all sides
of the House. I beg to move.
Motion on Amendments 1 and 2 agreed.
Motion on Amendment 3
Moved by
That this House do agree with the Commons in their Amendment
3.
Amendment to the Motion on Amendment 3
Moved by
Leave out from “House” to end and insert “do disagree with the
Commons in their Amendment 3 and do propose Amendment 3B in
lieu—
3B: Clause 2, page 1, line 23, leave out “structures underpinning
the circular economy, and””
Amendment to the Motion on Amendment 3 agreed.
Motion on Amendments 4 to 11
Moved by
That this House do agree with the Commons in their Amendments 4
to 11.
Motion on Amendments 4 to 11 agreed.
Bill returned to the Commons with an amendment.
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