'Definitely worth doing': National Wealth Fund boss explains £40m Yorkshire relief road loan despite net zero strategy
The chief executive of the National Wealth Fund has staunchly defended the organisation’s investment in the creation of a new relief road in Yorkshire despite it being tasked with helping to deliver the UK’s net zero goals.
The NWF announced last month that it is providing a £40.6m loan to East Riding of Yorkshire Council to support construction of the Howden Relief Road.
The road will connect the A614 Thorpe Road with Station Road and is central to plans to build 1,800 new houses and allow the extension of the existing Howdens kitchen factory, creating hundreds of new jobs. The road, which is due to include a combined cycle and footway on both sides, is already under construction and is expected to open next year.
It is the first time the Leeds-based fund has supported the building of a new road and the organisation said last month the financial backing “aligns strongly with its strategic ambition to accelerate placed-based investment, while also supporting the council in meeting its housing targets”.
But it comes despite the NWF’s strategic remit including “helping to deliver the UK’s net zero target” with one of its three main ambitions being “unlocking growth opportunities on the pathway to clean energy”. The target is described as being “mutually supportive” with the other two central aims of the NWF; “accelerating place-based investment across all four nations of the UK” and “strengthening sovereign and strategic capabilities”.
When asked about how backing the road scheme tallies with clean energy ambitions, Mr Holbourn said: “Every investment that we make we look at the impact.
"We haven't done many road transactions. The limit on our ability is if we've got a project that is mainly aimed at local and regional growth, is that it doesn't do significant harm.
"For the Howden Relief Road, from our side it was a major infrastructure project designed to support longer-term economic development, and importantly, it was unlocking approximately 1,800 new homes, and also helping deliver commercial and community facilities for the area.
"So, on balance, and it's always on balance, we felt that that was a good transaction to do as a result of the impact, but clearly one of the impacts was not necessarily the reduction of carbon in the atmosphere.
"But really importantly, it would be too restrictive if we had to meet every criteria for every investment and we wouldn't get to that balanced portfolio.
"Do I think that you'll be speaking to me in three years' time, and we will have done lots and lots of road transactions? I think that's unlikely, but this was this one we felt was definitely worth doing for the benefit that it has to the community.”
The investment comes amidst the backdrop of growing political questions about the UK’s commitment to reach net zero by 2050. Sir Tony Blair questioned the plan last month and said Labour should “at a minimum… remove those parts of the net-zero agenda which prioritise clean energy over cheaper energy”. Meanwhile Great British Energy chair Juergen Maier, who has subsequently announcing he is standing down from the position, said last month that the phrase ‘net zero’ should be “scrapped” as it has become overly-politicised.
When asked about both sets of comments and where the fund stands on pushing forward on clean energy projects given the growing political questions around them, Mr Holbourn said: “We're fortunate because we are set up by statute and we have a very clear mandate to invest in, broadly speaking, anything involved in infrastructure which helps the UK consume more clean energy and grow.
“We are absolutely behind that ambition, and we have three ambitions. What one is around growth opportunities on the clean energy pathway, one is around regional place-based investment, and one is around sovereign and strategic capability.
"We're fully behind the effort, and the government has set out clear targets that they want to meet, and we are here to help them try and meet those.”
Energy Secretary Ed Miliband recently faced questions in Parliament on why Sir Tony Blair was so critical of his policies, with the former prime minister having recently said that the Government should tear up his net zero targets.
The Energy Secretary responded that Mr Blair has “lots of interesting views”.
He said: “I’m actually old enough to remember when Tony Blair was a great advocate of climate leadership in this country.”