Chancellor to set out how funding for key infrastructure projects will be protected

Thursday, 15 June 2017 06:00

The Chancellor has set out how funding for key infrastructure projects and start-ups across Britain will be protected as we leave the European Union. In his annual address to City leaders at Mansion House (which was not actually delivered in person) Philip Hammond set out a comprehensive plan that will ensure key UK projects and firms that would now seek European Investment Bank (EIB) or European Investment Fund (EIF) financing can continue to access the support they...Request free trial

The Chancellor has set out how funding for key infrastructure projects and start-ups across Britain will be protected as we leave the European Union.

In his annual address to City leaders at Mansion House (which was not actually delivered in person) Philip Hammond set out a comprehensive plan that will ensure key UK projects and firms that would now seek European Investment Bank (EIB) or European Investment Fund (EIF) financing can continue to access the support they need.

The EIB provides funding and support for sustainable investment projects across the EU. British projects and businesses can bid for this financing directly or through funds (e.g. for venture capital). EIB lending to the UK is worth around €48 billion and has supported projects like new Intercity and London Underground trains and new tram networks in Manchester and Nottingham, as well as energy, housing, university, and water investments across the UK. Similarly, start-ups in areas like tech and life sciences can benefit from European Investment Fund support.

The Chancellor set out that the government is currently in discussions with the EIB, and is committed to providing the necessary assurances to ensure continued access to EIB funding for UK projects without additional risk or cost to borrowers during our remaining period of EU membership.

He announced that the UK’s own financing schemes stand ready to step up and provide additional certainty to investors:

· The British Business Bank (BBB) will extend the limits in its current venture capital investment programme so that it can provide greater levels of investment into individual funds otherwise struggling to raise capital. As part of this, the BBB will, if necessary, be able to bring forward some of the £400m additional investment that the Chancellor announced at Autumn Statement 2016. We estimate that the short-term additional demand for the extended programme could be up to £80m, unlocking up to £320m of total investment into funds in the coming months.

· The UK Guarantee Scheme will offer new types of financial support, including “construction guarantees”, to help complex projects to reduce the risk they face and help them to access private finance.

Chancellor Philip Hammond said:

“Investors need certainty in order to continue to support the UK economy and create jobs as we leave the EU. That is why we will fortify the vital financial support that helps businesses to grow - from cutting edge start-ups right through to large scale infrastructure projects.”