The Legislative Consent Motion on the UK Infrastructure Bank Bill, and I call on the Minister for Finance and Local Government to move the motion. Rebecca Evans.

Motion NDM8176 Rebecca Evans

To propose that the Senedd, in accordance with Standing Order 29.6, agrees that provisions in the UK Infrastructure Bank Bill, in so far as they fall within the legislative competence of the Senedd, should be considered by the UK Parliament.

Motion moved.

I move the motion. The UK Infrastructure Bank is a new UK Government-owned bank launched in June 2021 that will provide £22 billion of infrastructure finance through partnering arrangements with the private and the public sectors. The bank's stated objectives are to use these funds to help tackle climate change and to drive economic growth across the UK. The bank has been established as a replacement for the European Investment Bank. While the Welsh Government lobbied hard for continued access to the EIB, it unfortunately no longer operates in the UK, following our exit from the European Union. It is also worth noting that the bank's total resources of £22 billion, although welcome, constitutes a relatively small sum to address both climate change and regional economic growth across the whole of the UK.

The bank's sole objectives are to help tackle climate change and to support regional and local economic growth. It will seek to achieve these objectives, working in five key sectors, namely clean energy, transport, digital, waste and water. The Welsh Government supports the principle of establishing the new bank. As the bank has tackling climate change as one of its central objectives, it will provide an additional source of funding to help public and private borrowers tackle the climate and nature emergencies. As ever, the Welsh Government would seek to use the cheapest form of finance to fund investment in public infrastructure, but, as a new public lender, the bank should not be overlooked where it has the potential to offer value for money.

The Bill primarily seeks to put the bank on a statutory footing. Although the bank will operate at arm's length from the UK Government, the Bill prescribes a small number of functions to the UK Government, such as the power to appoint directors to the board and, where necessary, to change the bank's aims and objectives.

When initially tabled in the UK Parliament last May, the Bill, which requires the consent of the Senedd, provided no role for the Welsh Government or the Senedd. This caused me and the Counsel General a great deal of concern. There were three specific clauses that troubled us where powers were reserved to the UK Government and which therefore failed to respect the devolution settlement. 

At this point, I would like to thank the diligent work of the Finance Committee, the Climate Change, Environment, and Infrastructure Committee and the Legislation, Justice and Constitution Committee. The three committee reports produced highlighted many of the same concerns that I had with the Bill, but also in additional areas, which helped shape our negotiations with the UK Government.

I and my officials have had constructive discussions with the UK Government throughout the course of the Bill's journey through Parliament, and I'm pleased to say that we have achieved concessions in all three areas that we were concerned with. Within two of the clauses, namely the objectives and activities at clause 2, and also strategic priorities and plans at clause 3, we have obtained a statutory obligation on the UK Government to consult with Welsh Ministers before they exercise powers, such as modifying the objectives of the bank or setting new strategic priorities for the bank. I would like to assure Senedd Members that, whenever the Welsh Government receives a consultation from HM Treasury, I will ensure that we liaise with the Senedd to ensure that I receive the views of Members before responding to any such consultation.

As a further concession, at clause 7, concerning the appointment of directors, we have ensured that at least one director will be appointed with responsibility for liaison and to ensure the interests of the Welsh Government are represented at board level in the bank. It's worth noting that this is far more influence than we ever had with the European Investment Bank.

Overall, I believe that the current draft of the Bill, which has been agreed thanks to the constructive efforts of all parties, including Members of the Senedd, and particularly our committees, does represent a practicable compromise. Diolch yn fawr.

I call on the Chair of the Climate Change, Environment and Infrastructure Committee, Llyr Gruffydd.

Thank you very much, Dirprwy Lywydd. The committee, as you know, has considered all three memoranda for the Bill and has published two reports. The most recent was laid yesterday, and I'm sure that Members have had an opportunity, at short notice, to have a look at that. 

Before turning to the provisions that are of particular relevance to the committee's remit, and to the matter of consent, I'd like to say a few words about the scrutiny process. This will be familiar to a number of you, because the points I raise won't be new to Members, but it doesn't make them any less important in any way.

Memorandum No. 1 and memorandum No. 2, laid last summer, outline the Welsh Government's concerns regarding the Bill, and these are concerns shared by the committee, of course. At the time, the Minister provided assurances that she was discussing amendments to address those concerns, so we deferred a decision on the matter of consent.

Memorandum No. 3, referred to us shortly before the Christmas recess, provides details of the amendments negotiated between the Governments and subsequently agreed to. According to the Welsh Government, these amendments, as we have just heard, represent a reasonable comprise, so it's now asking the Senedd to give consent to the Bill. The fact that the amendments were made at such a late stage in the Bill's passage, of course, means two things: first of all, that the time available for us to report on the memorandum was limited, and, secondly, that the time available for Members then to consider our findings was also limited before being asked to form a view on consent. 

In addition to this, it's fair to say there is no hope of further amendments being made to the Bill to address our outstanding concerns as a committee—those concerns remain, of course. I'll come to these in just a moment, but, once again, this demonstrates, does it not, the inadequacy of the LCM process.

So, I’ll move on to the provisions of particular interest to us as a committee. One of the bank’s two statutory objectives is to help to tackle climate change. Now, we, of course, know that, if Wales is to become a net-zero nation by 2050, significant infrastructure investment from both the public and private sectors will be needed. The bank could potentially play an important role in scaling up and accelerating that investment. Given this, we support the creation of the bank in principle.

The bank’s objectives are laudable, but there is a glaring omission, namely tackling the nature emergency. Given the dangerous decline in nature, and with the ink barely dry on the UN biodiversity agreement arising from COP15, it’s therefore deeply disappointing the UK Government ruled out the inclusion of a nature objective specifically. The Minister has provided assurance that the Bill, as drafted, will enable investment in nature-based solutions and biodiversity. Encouraging though this may be, of course, it doesn’t equate to a statutory nature objective.  

In terms of our other outstanding concerns regarding the Bill, in earlier memoranda, the Minister said she was calling for the Bill to be amended

‘to enable the Senedd and the Welsh Ministers to take their appropriate role within [the bank’s] Governance structures to ensure proper democratic accountability.’

She said that the amendments would

‘provide the Welsh Government and the Senedd with roles equivalent to those of their UK counterparts.'

Now, we’ve had a taste from the Minister of some of the amendments that she was calling for in opening the debate, but, before that, of course, the Minister was previously unwilling to share details of the amendments she was calling for with Senedd committees. This was on the basis that inter-governmental negotiations were ongoing. Now, there we go; that again raises a question about our role as a Senedd in the context of this process.

Now, of course, there has to be consultation, as I understand it, with the Welsh Ministers before UK Ministers can exercise powers in relation to the bank’s objectives and activities, and strategic priorities and plans. Well, this, certainly, isn’t an equivalent role, such as we were seeking. And what of the Senedd’s role? Quite simply, the Bill doesn’t provide a role for the Senedd. Let’s be clear about what that then means—it means the UK Parliament, rather than Senedd Cymru, will scrutinise how powers in areas of devolved competence are being used, and they will be the ones who will oversee the bank’s effectiveness as far as it relates to Wales.

So, having considered the Bill, as amended, we still have concerns about the limited role of the Welsh Ministers in terms of the bank’s governance structures, and the lack, of course, of a role provided for the Senedd. So, Dirprwy Lywydd, with this in mind, the committee is not in a position to recommend that the Senedd gives consent to the Bill.

May I change hat now? Because I understand that I’ll only have one opportunity to contribute, may I speak as spokesperson for Plaid Cymru in one sentence? Yes. Just to say, of course, that, as usual, Plaid Cymru will be voting against consent, but a number of the concerns relating to what I’ve said in my other role in this debate are valid in that regard too. Thank you.

I call on the Chair of the Legislation, Justice and Constitution Committee, Huw Irranca-Davies.

Thank you very much, Dirprwy Lywydd. We have produced two reports covering the three consent memoranda that have been laid by the Minister on this Bill—the first was completed last October, and the second was laid yesterday afternoon. Neither of our reports contain many conclusions or recommendations, so my comments in this debate will be very brief.

Llywydd, for those keeping count, our report on memorandum No. 3 was our fortieth report on legislative consent memoranda in this sixth Senedd.

We’re very busy.

So, with your invitation, Dirprwy Lywydd, I will speak in the two other debates on legislative consent motions for two other Bills this afternoon, at risk of boring everybody here within the Siambr, but such is the extent to which the UK Government is proposing and indeed the UK Parliament is passing legislation now on devolved matters.

Now, I make this point because conclusions 2 and 3 in our first report highlighted our concerns that, despite pre-introduction inter-governmental working on the Bill, which lasted several months, the Bill was indeed introduced to the UK Parliament in a state that meant the Welsh Government, when it laid its legislative consent memorandum before the Senedd, could not recommend that the Senedd give its consent to the Bill. And we noted our disappointment at that time that this demonstrated clear failures in inter-governmental working, and we're not laying that at the foot of the Minister here, but it's a clear breakdown there. 

In our second report, on memorandum No. 3, we acknowledge that progress does appear to have been made in the machinery of inter-governmental relations, to the effect that the Minister has secured some concessions and is now recommending that the Senedd gives its consent to the Bill, so that's welcome. Recommendation 1 in our first report asked for clarity on why instances of failures in inter-governmental working, as originally shown in relation to this Bill, had not been escalated to higher levels in the inter-governmental structures, including by using the reformed formal dispute resolution procedures.

Now, we've noted the Minister’s response that, in her view,

'there has been constructive dialogue with HM Treasury' and, in quotes,

'it has not been necessary to escalate matters.'

However, it does remain unclear to us what would need to happen, or indeed not happen, before Welsh Government would seek to use a formal dispute resolution process—not just within this LCM and this Bill, but in others—for which it advocated in order to resolve serious disagreements with the UK Government. Now, perhaps we'll only learn this in hindsight when the dispute resolution process has been used in anger, and when prior discussions have not resolved disagreements at earlier stages. But we would still welcome, if we could have it, further explanation of when a formal dispute resolution process may indeed be triggered. 

Recommendation 2 in our first report asked the Minister to clarify what she meant when she said to us that the Welsh Government continued to, in quotes,

'advocate that the Senedd and Welsh Government all exercise equivalent powers to those of our UK counterparts.'

So, we were a little bit disappointed with the response from the Minister when she told us that she couldn't give specific details about the exact nature of the amendments that may be introduced, and that her 

'officials have been clear that issues of constitutional concern must be addressed in a manner that is satisfactory to me'— the Minister—

'and ultimately to the Senedd.'

However, this doesn't address adequately in detail the request made in our recommendation. So, I wonder, Minister, if you can reflect on this point in your closing remarks, expanding on what you meant by that statement,

'advocate that the Senedd and Welsh Government all exercise equivalent powers to those of our UK counterparts', because you piqued our curiosity and then left us dangling and expecting more. Diolch yn fawr iawn. 

I call on the Minister to reply. 

Diolch. I'm very grateful to colleagues for their comments in the debate this afternoon, and I should respond to some of the committee's recommendations on the floor of the Senedd, because I know it was the first recommendation of the Climate Change, Environment, and Infrastructure Committee that I respond to their recommendations 2 and 3 during this debate this afternoon. So, I'm pleased to do that, and I know that the committee was keen that I clarify whether the bank could act a lender to devolved public authorities other than local authorities, based on the new definition of public authorities, and also whether and how the ability of devolved public authorities to borrow from the UK Infrastructure Bank could impact on funding arrangements for those bodies. 

So, just to confirm that we do welcome the fact that the definition of public authorities has been broadened to make it clear that the bank can lend to a wider range of devolved public authorities, rather than simply local authorities. The appropriateness of borrowing to specific public authorities and any impact on their funding arrangements would have to be considered on a case-by-case basis, but I'm more than happy to provide committee with more detail as we get into the use of the bank, and to liaise with public authorities to test their experience of dealing with the bank. And I will say that our Welsh Government officials are in very, very frequent contact with bank—as, in fact, is the Development Bank of Wales—to establish those good relationships. 

And then, in terms of those concessions that we were trying to negotiate, they were around those three specific clauses that I've described this afternoon. In terms of a role for Welsh Ministers when clauses 2 and 3 might look to be amended, those relate, of course, to the strategic priorities and plans, and the objectives and activities of the bank. But then, also that point about directors: so, we would have originally, I think, wanted to have been able to appoint ourselves a director onto that board. We weren't able to get to that point with the UK Government, but I think that what we did negotiate, which was that there would be a specific member of the board responsible for liaison and whose role it is to represent the views of the Welsh Government on that board, I think, is an important concession that we were able to achieve in terms of that particular concern that we had.

In terms of the length of time that it took to get us to this point, I think that we do have to recognise that there were delays in reaching a compromise position, but they were more of a product of the numerous changes in Treasury Ministers at Westminster, specifically over the summer, rather than any particular disagreement that we had on some of these issues that we were trying to resolve. So, I think that what we have been able to negotiate will certainly be an improvement on the initial situation, and I think that we are at a point now where we are able to recommend consent, because our key concerns have been addressed in a way that we think is pragmatic and does allow us today to recommend consent.

The proposal is to agree the motion. Does any Member object? [Objection.] Yes, there is objection, therefore I'll defer voting under this item until voting time.

Voting deferred until voting time.

Minister, are you in a position to continue with item 8?

I am, with apologies for the earlier confusion.