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European Investment Bank freezes public building loans due to Brexit

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RIBA voices concern after European Investment Bank (EIB) stops making new long-term loans to the UK following the government’s triggering of Article 50 

According to The Times, the world’s biggest public lender has ‘effectively imposed a moratorium’ on new long-term loans to the UK, which means that the government faces a multibillion pound shortfall in funding for new hospitals, social housing and schools. 

The newspaper reported that only three British projects have had funding signed off since Article 50 was invoked in March, and no projects have been invested in since June. The EIB funded £6.9 billion of public schemes in the UK last year.

The UK has a 16 per cent shareholding in the bank. It is an EU organisation, so Britain will pull out in 2019 if its continued membership cannot be agreed.

In June, the chancellor Philip Hammond said that he wanted to ensure EIB funding continues for the remainder of Britain’s time in the EU. 

‘I want that access to EIB funding to continue while we are members of the EU on equal terms, so I am engaged with EIB and will provide the assurances it needs to sustain the flow of EIB and European Investment Fund funding to UK businesses and projects,’ said Hammond. 

’And to ensure that finance continues to be available after Brexit, alongside these discussions with the EIB I can also announce I am expanding the support available to capital funding in the UK.’

RIBA President Jane Duncan said that the construction industry will be greatly concerned at the possibility of funding from the EIB being cut off. 

’The UK needs continued access to funding from the EIB, at the very least until the UK withdraws from its membership from the EU,’ she said. ’The news that this is not taking place will be very concerning for many across the construction sector. Access to finance is central to ensuring that the UK can build the transport systems, homes, hospitals and schools that communities across the country really need.’

She added: ‘The RIBA has also been clear that the UK government needs to step up and provide long-term confidence critical to ensuring that Britain can continue building. The UK government should take the opportunity to set out a long-term plan for investment and funding in housing, infrastructure and other key sectors that will ensure finance remains available after we leave the EU.’ 

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