1.Brexit means that the UK will no longer be a member of the European Investment Bank (EIB). This report considers the role of the EIB in the UK and options for the future relationship after Brexit, as well as domestic replacements such as the creation of a UK infrastructure bank. It begins in Chapter 2 with an overview of the EIB’s structure and activities in the UK, examining the unique features that enable it to play an important role in supporting investment across a range of sectors.
2.Chapter 3 assesses the impact of Brexit on the EIB’s lending to the UK since the referendum. It also examines the return of the UK’s share of the paid-in capital of the EIB and options for any future relationship, given that the Government has yet to specify its preferred model. Chapter 4 moves on to the consequences of losing access to EIB funding and the extent to which this could be replaced by the private sector. It considers both large-scale infrastructure projects and funding targeted at SMEs, the latter of which currently falls within the remit of the British Business Bank.
3.Finally, Chapter 5 reviews recent arguments in favour of establishing a UK infrastructure bank to replace lost funding from the EIB. The chapter also considers possible barriers to doing so, such as EU State aid rules and measurements of public sector debt, as well as considerations relevant to the design of such an institution.
4.The EU Financial Affairs Sub-Committee, whose members are listed in Appendix 1, commenced the inquiry in July 2017. We received a number of written submissions and held oral evidence sessions with seven panels of witnesses during September, October and November 2018. We are grateful to all our witnesses.
5.We make this report to the House for debate.