Call for commitment
CBI calls for infrastructure bank to rebuild economy
The CBI wants a commitment to fulfil infrastructure pledges
A UK infrastructure bank should be set up to help deliver promised investment in roads, railways, broadband and housing, says the CBI.
The employers group says the bank can play a part in helping private sector investment drive the UK’s ‘infrastructure revolution’.
It would be needed to take up functions currently undertaken by the European Investment Bank.
It is not clear if the CBI sees the bank operating in Scotland where the Scottish Government is setting up a Scottish National Investment Bank and has been advised by its own commission on infrastructure not to set up its own version of England’s National Infrastructure Commission.
The CBI believes an infrastructure bank would replace the European Investment Bank as Britain leaves the EU. It says businesses view the EIB as a “useful institution”, providing cheap debt on infrastructure projects.
In addition, businesses have credited the EIB with providing early finance in markets where little capital exists.
It also helps with lending to SMEs, utility companies and universities. Furthermore, the EIB has helped resolve affordability issues across numerous contracts, facilitating the sharing of costs fairly between funders and sponsors.
“Without a replacement for the EIB, funding cutting edge infrastructure priorities such as those in energy generation, power transmission, fibre networks and broader environmental infrastructure could be more difficult, says the CBI in a new report.
Investing in infrastructure, released today, highlights the crucial role which private finance can play in delivering on infrastructure promises.
The CBI says the financial strain resulting from Covid-19 must not be allowed to derail infrastructure spending ambitions unveiled in March’s Budget.
These included £640billion of infrastructure pledges designed to revitalise Britain’s roads, railways, broadband and housing as part of the nation’s levelling-up agenda.
Carefully prioritised infrastructure investment will stimulate economic growth and help create a fairer, more resilient and sustainable economy– Richard Threlfall, KPMG
Matthew Fell, chief UK policy director at the CBI, said: “Prior to the outbreak of Covid-19, businesses welcomed the government’s commitment to deliver an ‘infrastructure revolution’ and interpreted it as a clear sign that the government was serious about delivering on its levelling-up agenda.”
Richard Threlfall, global head of infrastructure, KPMG International: said: “Carefully prioritised infrastructure investment will stimulate economic growth and help create a fairer, more resilient and sustainable economy.
“But with constrained public finances, now more than ever, we need to attract private finance, both from the UK and from inward investment.
“I welcome the powerful set of recommendations in this report, which if enacted would really help the UK to build back better.”