UK faces infrastucture funding hole post Brexit

The Lords EU Financial Affairs sub-committee has called on the Tories to give taxpayers a “better account” of why it has not claimed any of this money.

Under the May Withdrawal Agreement, the UK will receive the g3.5bn (£3bn) of capital it has paid into the EIB.

However, the UK will not receive any share of the profits that the EIB has accumulated, nor any interest or dividends, which the committee says could amount to g7.6bn (£6.6bn).

The Lords report questions why the Government has not claimed any share of the money.

Baroness Falkner of Margravine, chairwoman of the committee, said the Government must “come clean about why it has not claimed any share of the EIB’s g7.6bn of profits”.

Separately, the report argues that the UK should consider creating a state-backed infrastructure bank after Brexit to replace lost EIB funding.

Since joining the EU in 1973, the UK’s infrastructure has been the beneficiary of more than g118bn (£103bn) of lending from the EIB.

This includes money for Crossrail, London’s “Super Sewer”, the expansion of Manchester’s tram network and Scotland’s Beatrice offshore windfarm.

In the last decade alone, the EIB has pumped g50bn (£43.5bn) into the British economy, and in 2015 accounted for a third of total funding of UK infrastructure projects with £5.6bn across 40 different schemes. However, the country will lose access to the EIB after Brexit.

“The UK’s infrastructure, and the industries that depend on infrastructure spending, will be hurt if the Government does not quickly find a way of plugging the funding gap that will be created if access to the EIB is lost after Brexit,” Baroness Falkner added.

“We’re calling on the Government to give serious and swift consideration to the creation of a UK infrastructure bank.

There has already been a “marked decline” in funding from the EIB since the referendum and triggering of Article 50, which has fallen 87% since 2016.