First ever UK infrastructure investment bank to open in Leeds with £12bn, Rishi Sunak announces in Budget 2021
The first ever UK infrastructure bank is set to open in Leeds, the Chancellor has announced.
Speaking in the House of Commons today, Rishi Sunak said the bank will invest 'across the UK' supported by an initial capitalisation of £12bn.
The Chancellor said: "I can announce today the first ever UK infrastructure bank, located in Leeds
"The bank will invest across the UK in public and private projects to finance the green industrial revolution.
"Beginning this Spring, it will have an initial capitalisation of £12bn and we expect it to support at least £40bn of total investment in infrasturcture.
"I know my right honourable friend the MP for Pudsey will welcome the particular location of this new institution."
The new lender will have a remit to help deliver the UK’s commitment to reach “net zero carbon” by 2050 and provide funding for projects across the UK.
It will co-invest alongside private investors through a mix of loans and guarantees as well as taking equity stakes in projects.
The new infrastructure bank was recommended by John Armitt, the head of the National Infrastructure Commission — an arms-length government body — who said it should start with an asset base of £20bn.
The new bank is in part designed to replace funding previously obtained from the European Investment Bank, which the UK is leaving after the Brexit transition period which ends on December 31. The EIB previously lent about €8bn a year for projects ranging from London’s Crossrail line to social housing and new school-building projects.
The Chancellor said 'if we want a better future economy we have to make it happen'.
He added: "The world is not going to be any less competitive after Coronavirus
"We need a commitment to green growth.
"We need a real commitment to give every business the opportunity to grow and succeed."
Leeds City Council and the Leeds City Region Enterprise Partnership have welcomed the news that Leeds will be the home of the country’s first-ever infrastructure bank.
Councillor James Lewis, leader of Leeds City Council, said: “The news that Leeds will be the home of the new national infrastructure bank is a vote of confidence in the city and everyone who lives here.
“This move will give Leeds a central role in decisions that will shape the country’s future and its potentially transformative power should not be underestimated – particularly when working in tandem with the new Treasury North campus planned for Darlington.
“I am also determined to ensure that local people reap the benefits that it should bring in terms of job creation.
“As a council, we care deeply about climate change and the environment, so it is particularly exciting that our city will be at the heart of projects designed to drive forward what is sometimes described as the green industrial revolution.
“We have spent years telling people that Leeds is the place to be and it is really gratifying that our voices have now been heard.”
Roger Marsh OBE DL, chair of the Leeds City Region Enterprise Partnership and NP11 group of Northern local enterprise partnerships, said: “Locating this powerful national institution in our region will be a real catalyst for change and a major driver of our post-pandemic recovery. It will build on our long-term commitment to ensuring that the benefits of economic growth are felt by all of our communities.
“The UK Infrastructure Bank will play a crucial role in supporting the Government to achieve its pledge to level-up the UK, reach net-zero carbon by 2050 and accelerate COVID-19 recovery.
“This landmark decision is testament to the strength of our financial and professional services sector and will ensure a strong and successful long-term economic outlook for the city region, the North and the UK. It will act as a catalyst to inspire economic growth and business confidence at a time when it is needed most and it is pleasing that it will be operating from Leeds.
“The move also signifies a new page in the relationship between the Government and cities and regions across the North, where we work in partnership to unlock economic potential and deliver on the ambitions for levelling-up all parts of the country.”
The UK Infrastructure Bank will have an initial capitalisation of £12bn and is expected to support at least £40bn of investment in infrastructure projects.
It will begin operating this spring in an interim form before ramping up its activities over the following months, with a primary focus on sectors including clean energy, transport and digital.