To ask Her Majesty’s Government, in the light of the comments by Alexander Stubb, vice-president of the European Investment Bank (EIB), that loans worth €3.5 billion from the United Kingdom to the EIB are not due to be repaid in full until 2054, whether they intend that the United Kingdom will remain a member of the EIB.
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I draw attention to my entry in the register of interests. There has to be a limit to what is set out in the register, but I should add that I have been friends with members of the EIB for almost 40 years. That is probably relevant to this Question.
My Lords, the UK’s relationship with the European Investment Bank will need to be resolved as part of our withdrawal from the European Union. The Government are going through the UK’s potential rights and obligations line by line and are committed to getting the best deal for this country and a fair settlement for UK taxpayers.
My Lords, I thank my noble friend for that Answer. It has been made fairly clear in another place that the UK wants continuing access to funding, and indeed the Brexit Secretary has used the phrase, “an ongoing relationship with the EIB”. May I counsel that we should be cautious in how we withdraw? Although there are some people who wish us to cut ourselves off from every European institution, a strong case could be made for us to negotiate our continuing membership of the EIB, or at least access to its machinery.
The Chancellor of the Exchequer would echo those words. He has made it clear that a continued relationship with the EIB may be possible and indeed desirable, but that is a matter to be negotiated because at present the EIB’s constitution and formation does not allow for it to happen. Changes will need to be made, but in the meantime it is important that we make clear that we believe that the full rights and obligations which come to the UK as a member of the EIB and its partner organisation, the European Investment Fund, should remain fully intact and that UK borrowers should have equal access with other members while we are exiting the European Union.
My Lords, things are already happening. Is the Minister aware that a current project to provide support for businesses in the north-east is now on hold because the European Investment Bank is meant to provide half the resources towards it? Action is already being taken to the disadvantage of a section of the British people, even while the Government are involved in this situation.
That is a fair point. The North East Finance application by seven local authorities was put forward. Following the triggering of Article 50, the EIB took the view that it wanted to undertake an additional level of due diligence to make sure that the UK would stand by its obligations after exiting the European Union. We believe we have confirmed that position by producing our position paper on privileges and immunities. We were delighted to see that the EIB, at its September meeting, had started to approve loans again for after that period. We wish North East Finance well in that.
My Lords, the European Investment Bank is a major investor in infrastructure projects in the United Kingdom. For example, in 2016, £8.1 billion was invested in projects ranging from the health service to education and telecommunications. Given all that, does the Minister not think that it would be in the interests of both the United Kingdom and the European Union for Britain to have an ongoing relationship with the EIB?
The UK is a major shareholder of the EIB, with 16.1%. We do well out of the arrangement, which is one reason why we have an interest in the relationship continuing. However, it is not the only mechanism. We have set up the UK Guarantees Scheme, a £40 billion-fund that could be available for infrastructure projects, and we are committed to moving forward in that spirit.
My Lords, the Minister will be well aware of the need for this kind of investment in small, high-technology business in the north-east. Will he make a personal effort to ensure that any remaining difference between the EIB and the Treasury over the kind of assurances that need to be given will be resolved, and that the Treasury’s attitude will reflect the urgency, given that the north-east does not have the northern powerhouse funds that other regions do?
That is right. In fact, the Chancellor of the Exchequer met the chair of the north-east local enterprise partnership on his visit to Gateshead on 22 September. As a governor of the bank, he has been at the forefront, advocating a speeding up in recognising the equal rights of UK borrowers, which must be respected and must continue.
My Lords, is it not clear from the record that the European Investment Bank has invested, and encouraged further investment of, billions of pounds in the United Kingdom economy? If the Government decide that we will leave the EIB, what will they do to replace that level of continuous investment, particularly in the regions of England and the nations of the United Kingdom?
One example is the northern powerhouse fund, in partnership with the EIB, but the British Business Bank is there for precisely that purpose, as are the UK guarantees. As the Chancellor said in his Mansion House speech, we still want to explore, as part of the exiting the European Union negotiations, the possibility of our remaining part of the EIB, for the very reason the noble Lord articulates.
My Lords, the European Investment Fund supplies finance to the venture capital and seed capital industry. London is widely recognised as a centre of excellence for venture capital and seed capital, but the EIF has suspended finance to a number of venture capitalists based in London. Will the Minister write to the EIF to ask why it is depriving British businesses of what is essentially British money?
We are very clear on this. We believe that UK borrowers and companies seeking investment should continue to have equal access on that basis. That is why the Chancellor announced the establishment of the British Business Bank and that it would be increasing its threshold of ability to lend to venture capital funds as part of that. We are absolutely clear: we should have equal access while we continue to be members and continue to negotiate what the relationship will be thereafter.