LEVELLING UP AGENDA & GREEN DEAL SET BACK BY THREE YEARS BY BRITISH EXIT FROM THE EUROPEAN INVESTMENT BANK, SAYS BROWN

LETTER TO MPs SAYS 72 PER CENT OF THE PUBLIC BELIEVE UK WORKING WITH OTHER EUROPEAN COUNTRIES BENEFITS EVERYONE.  

66 PER CENT WANT THE UK TO REMAIN A MEMBER OF HORIZON AND 61 PER CENT A MEMBER ERASMUS – TWO PROGRAMMES, ALONG WITH A JOINT VENTURE WITH THE EIB, WHICH SHOULD BE SALVAGED FROM EU EXIT 

A report, compiled region-by-region for the Alliance for Full Employment points to a need for a post-Brexit joint venture between the UK and the European Investment Bank, with the former Prime Minister pointing to hundreds of millions lost to levelling up projects.

“For years the European investment Bank has been key to new investment in transport, housing and infrastructure in the regions,” said former Prime Minister, Mr Brown.

“€50 billion has been invested in the UKs regions and nations over the last decade. This investment is crucial if levelling up is to happen.

“Because a big share is now green investment it is key to the green agenda the Government wants to pursue.

“The report shows that this important part of the UK will lose out because of the loss of this vital arm of investment. We itemise projects where communities locally have benefited and will now be denied vital investment they need.”

“I welcome a new British investment bank, announced in the recent spending review, but it will take years to be as effective as the current EIB arrangements.”

“We should have been planning a replacement for four years from 2016 and to be behind the times means we will lose years of the levelling up agenda.  And we lose out on the green economy because we are outside the EIB for investment in green projects.”

“The regions and nations can ill afford to lose out at this critical time when investment for a recovery is needed.  Following Brexit, the EIB will be unable to approve any new UK investments after January 31, 2020 and there will be a gap before the new bank is established leaving a vacuum where projects that are urgent for “levelling up” and for the green economy will lose out,” said Mr Brown.

Last month Chancellor, Rishi Sunak, announced the creation of a new national infrastructure bank as part of the Treasury’s spending review.  Details on the new bank remain sparse, save that it will be headquartered in the north of England and function with ‘a high degree of operational independence’.

The AFFE reports estimate it will take 10 years to set up a fully operational investment bank from scratch and therefore essential to ensure that the UK continues a joint venture with the EIB to make the long-term transition to domestic provision of infrastructure financing easier, preventing the damage done by a clean break and potentially helping the credit rating of a new financial institution.

“The UK should continue a joint venture with the EIB and not leave an organisation that’s working until any new body is established.  Our green agenda could be set back by three years by a failure to work with the EIB,” the report says.

The EIB has used its AAA rating to support UK projects, investing directly, covering certain risks and thus encouraging other financial institutions to invest.  The EIB’s ability to raise money at a less expensive rate than private and debt and equity providers has allowed it to enhance the affordability of projects it has supported.

The EIB is also the EU’s climate bank: it is one of the world’s largest multilateral providers of finance for projects to challenge climate change. Its climate strategy is to play a leading role in mobilising the finance required to keep global warming below 2˚C, aiming for 1.5˚C. 

Last year, the EIB Board of Directors agreed a new set of ambitious targets for climate action and environmental sustainability, including supporting €1 trillion of investments in climate action and environmental sustainability in the critical decade from 2021 to 2030.

The EIB Group will align all its financing activities with the principles and goals of the Paris agreement by the end of 2026.

“The UK should continue a joint venture with the EIB and not leave an organisation that’s working until any new body is established. Our green agenda could be set back by three years by a failure to work with the EIB,” the report says.

Mr Brown, who co-founded the Alliance for Full Employment with the First Minister of Wales and 5 of England’s Metro Mayors to lobby against the health pandemic becoming a mass unemployment crisis has today sent a letter to all MPs with details of polling in which 72pc of people across Britain are content to develop post-Brexit ways of cooperating with the European Union. 

He is also recommending in is letter that British association to the EU Horizon 2020 Science programme and Erasmus “should be salvaged from the EU exit.”

Across Britain the EIB has invested £460m into the installation of household smart meters in 2015, put £570 million in 2016 into building affordable housing by The Housing Finance Corporation, described as a ‘key component of the UK government’s housing policy’, £350 million from 2025 into the development of a new aero engine by Rolls Royce and £800 million in 2017/18 towards enhancement of National Grid’s gas distribution networks.

Regional investment includes EIB loans of €128 million to finance the extension to Nottingham’s existing urban light rail network, financing amounting to £155 million for the new Royal Liverpool Hospital.  Newcastle University received €129 million in EIB loans in 2016 to kickstart phase one of its Capital Plan. 

In 2018, EIB loans of over €100 million financed integrated road bypass, highway improvement and urban public transport schemes in West Yorkshire and York. The EIB supplied €54 million the development and refurbishment of the University of Hull’s campus in Yorkshire. And the University of Lincoln received €67 million for the construction of new buildings for the Schools of Psychology, Health and Social Care and for the Schools of Engineering and Computing.

In Wales, Swansea University’s Innovation Hub has benefitted from €142 million between 2012 and 2016 enabling regional regeneration through research and development in collaboration with businesses across Wales. Bangor University has received €64 million between 2014 and 2016 for new teaching, research and supporting facilities supporting the next generation of students in North Wales into university education and provide North Wales with the infrastructure to become a hub of research.

Welsh Water and Wastewater have received investments worth €592 million between 2011 and 2014, financing a set of investments to increase the resilience and performance of drinking water treatment and water supply assets, as well as investments for wastewater treatment. This infrastructure provides 3.2 million people with healthy drinking water and sanitation.

In Scotland loans of £190 million in 2018 for refurbishment of Wheatley Group’s existing affordable housing stock to meet Scottish and European energy efficiency targets, energy efficient affordable housing as well as housing and integration support for refugees.  EIB loans funded a £232 million expansion of Aberdeen harbour in 2016 – underwriting the design, construction, and commissioning of a new deep-water multipurpose port at Nigg Bay, located 1 km south of the existing port of Aberdeen.

ends

note to desks:

Attached: The AFFE EIB Reports with further details of the significance of EIB financing to vast infrastructure projects across England, Wales and Scotland and You Gov polling.

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