Thursday, September 14, 2023
Another Brexit failure
The Guardian reports that new public sector lenders created by the government since Brexit are investing two-thirds less than the UK was receiving from the EU’s European Investment Bank.
The paper says that the thinktank UK in a Changing Europe has compared the record of the European Investment Bank with the work of new Treasury-backed institutions including the UK Infrastructure Bank (UKIB) and have found it wanting:
The EIB invested an average of £6.4bn in the UK between 2009 and 2016 in real terms, peaking at £7.5bn in 2016 – the year of the Brexit referendum.
By contrast, the successor institutions created by the government, including the Leeds-based UK Infrastructure Bank (UKIB), invested £2.4bn in 2022 – a third as much as the EIB was spending six years earlier.
“It is not clear that the UK’s domestic development banks will be able to fill the hole left by the EIB by the end of the decade. They lack staff and expertise, inhibiting them from scaling up operations quickly,” said the report’s author, Stephen Hunsaker.
“Nor have they achieved the coveted AAA credit rating of the EIB. Consequently, they lend at higher rates, making it more expensive to lend to public-interest projects.”
The new institutions – which include the Scottish National Investment Bank, the Development Bank of Wales and the British Business Bank – also appear to be less focused on infrastructure projects than the EIB.
Between them, they invested just 17% as much in infrastructure projects in 2022 as the EIB did before it began winding down its links with the UK.
Liberal Democrat Treasury spokesperson, Sarah Olney MP, is absolutely right when she said: “This damning report highlights yet another broken promise from this Conservative government. We already knew farmers and [fishers] have suffered from the government’s failed trade deals, but now their investment plans are left in tatters too.”
The damage to our economy caused by Brexit continues.
The paper says that the thinktank UK in a Changing Europe has compared the record of the European Investment Bank with the work of new Treasury-backed institutions including the UK Infrastructure Bank (UKIB) and have found it wanting:
The EIB invested an average of £6.4bn in the UK between 2009 and 2016 in real terms, peaking at £7.5bn in 2016 – the year of the Brexit referendum.
By contrast, the successor institutions created by the government, including the Leeds-based UK Infrastructure Bank (UKIB), invested £2.4bn in 2022 – a third as much as the EIB was spending six years earlier.
“It is not clear that the UK’s domestic development banks will be able to fill the hole left by the EIB by the end of the decade. They lack staff and expertise, inhibiting them from scaling up operations quickly,” said the report’s author, Stephen Hunsaker.
“Nor have they achieved the coveted AAA credit rating of the EIB. Consequently, they lend at higher rates, making it more expensive to lend to public-interest projects.”
The new institutions – which include the Scottish National Investment Bank, the Development Bank of Wales and the British Business Bank – also appear to be less focused on infrastructure projects than the EIB.
Between them, they invested just 17% as much in infrastructure projects in 2022 as the EIB did before it began winding down its links with the UK.
Liberal Democrat Treasury spokesperson, Sarah Olney MP, is absolutely right when she said: “This damning report highlights yet another broken promise from this Conservative government. We already knew farmers and [fishers] have suffered from the government’s failed trade deals, but now their investment plans are left in tatters too.”
The damage to our economy caused by Brexit continues.
