UK Infrastructure Bank is launched in Leeds by Rishi Sunak and Yorkshire business leaders say it will be a 'major driver of our post-pandemic recovery'
A new infrastructure bank in Yorkshire’s biggest city, which will unlock more than £40 billion of investment in the UK, has been hailed by business leaders as a “major driver” of the region’s post-pandemic recovery.
Chancellor Rishi Sunak says the new UK Infrastructure Bank, launched today in Leeds will funnel cash to projects that will support people across the country.
The base at The Embankment, by the River Aire, will be able to buy £5 billion of equity in UK infrastructure projects as well as lending £7 billion and guarantee loans of £10 billion.
Richmond MP Mr Sunak will visit the bank today and says it will “accelerate [government] ambitions for tackling climate change and levelling up, while creating new opportunities across the UK as part of our plan for jobs”.
He added: “Through the bank, we are investing billions of pounds in world-class infrastructure that will support people, businesses and communities in every corner of the UK.”
Mr Sunak announced in this year’s Budget that the UK Infrastructure Bank would have its main headquarters in Leeds.
The Yorkshire Post understands that it will eventually employ 200 people and the vast majority, including its chairman and CEO, will be based in the city.
It is part of a commitment to spend £100 billion on capital expenditure – that is to say investment in new projects or extending the life of old ones. There is currently no date by which the money it funds needs to be spent.
It will initially start with loans, equity and guarantees to private businesses before starting to lend to local authorities later this summer. In 2016, the public sector invested about £19 billion on infrastructure, with 40 per cent of this coming from the coffers of local government.
Opponents have pointed out that the scale of its operations is dwarfed by the national investment banks in France and Germany.
And the Office for Budget Responsibility said it had “not adjusted our economy forecast” in light of the bank’s creation because of the bank’s small size and expected limited impact.
But Sir Roger Marsh, who chairs the Leeds City Region Enterprise Partnership, 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.
“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.”
Tom Riordan, chief executive of Leeds City Council, said officials had “been busy working with Bank and Treasury colleagues to give them a warm welcome to the city”.
He added: “Today’s launch is a positive signal that the bank is moving at pace and there is a strong fit with plans for investment in clean energy, transport and housing.”
Amanda Beresford, from the Leeds Chamber of Commerce, said: “The bank will be in good company, joining a host of other organisations which have made the decision to locate in Leeds including the Bank of England and Channel 4. Access to regional perspectives will help enormously with the Government’s ambitions to level up the UK economy.”