UK Infrastructure Bank risks becoming a ‘plaything’ of Treasury under so-called Henry VIII powers, peers warn
To prevent the UK Infrastructure Bank becoming a “plaything” of the Treasury, new safeguards are needed, according to concerned peers.
Concerns have been raised at Westminster over proposals that would allow the Exchequer to change the body’s activities set down in legislation – so-called Henry VIII powers.
Provisions would also allow the Treasury to amend what is defined by infrastructure.
A number of peers have called for these measures to be stripped out of the UK Infrastructure Bank Bill, amid worries over the operational independence of the institution from central Government.
At the same time there were demands for increased safeguards by requiring parliamentary approval of the strategic priorities of the bank and any changes made to them.
The House of Lords has been scrutinising the legislation, which will put the bank, currently operating on an interim basis, on a legal footing.
The Leeds-based body, which was set up to invest in infrastructure projects using both public and private cash, was created to replace the European Investment Bank (EIB) following Brexit.
Criticising the proposed powers for the Treasury in the Bill, Liberal Democrat peer Lord Sharkey said: “They attempt to give the executive power to make policy before they have decided what that policy is.”
Independent crossbencher Lord Vaux of Harrowden argued the provisions gave the Treasury too much power “to change things at will”.
He said: “You can’t have meaningful operational independence if the mandate within which the bank works can be changed without scrutiny and without safeguards.
“Something as fundamental as the basic objectives should only be changed following proper full scrutiny using primary legislation.”
Liberal Democrat Baroness Kramer said: “The bank on the face of the Bill is given activities and objectives in primary legislation, but that primary legislation can be changed wholly by statutory instruments.
“That’s the point of a Henry VIII power, which is primary legislation overturned by secondary legislation.”
She added: “At this point in time it is very hard to see that this bank is in any way different from the plaything of the Treasury.”
Referring to the changes sought by critics, Tory frontbencher Viscount Younger of Leckie said: “I believe that the intended purpose of this is to protect the operational independence of the bank and prevent the Treasury from changing the bank’s focus in the future.
“There may, however, be instances whereby we need to update the definition of infrastructure or the bank’s functions to ensure the bank can continue to fulfil its objectives as a long-lasting institution.”
He argued the legislation also allowed for parliamentary scrutiny of the bank’s strategic priorities.