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EU bank to lend Britain £1b to build more social housing

[LONDON] The European Union's investment arm is to lend Britain £1 billion (S$1.89 billion) to help build more social housing, it said on Monday, its largest ever support for such programmes within Europe.

The European Investment Bank denied an accusation by campaigners wanting Britons to vote to leave the EU in the national referendum in June that it was seeking to influence the vote, although it has stepped up both its lending to Britain and the volume of announcements publicising those loans over the past year.

The EIB, which lent a record £5.6 billion for investment in 40 projects in Britain last year, said the timing of the announcement was not linked to the referendum and that it took months for decisions to be made.

In the first four months of 2016 the EIB has agreed new loans worth nearly £4 billion in Britain, accounting for much of what it expects to approve for the whole year. A spokesman said the EIB's total lending in Britain in 2016 was likely to be about the same as last year's record £5.6 billion.

"It seems like some in Luxembourg think they can buy the referendum with a couple of cosmetic loans," said a spokesman for Vote Leave, the official referendum campaign group wanting Britain to quit the EU.

"If we vote 'leave' we could decide ourselves which projects it is best to offer lending to."

The EIB spokesman added that an increase in the volume of media statements on British loans reflected a drive for more openness towards the British public.

A review by Reuters found that since the turn of this year the EIB has issued 12 media statements on British loans, as many as in all of 2014.

It has issued seven statements on new loans in Spain this year, six on France, four on Italy and just two on Germany. In all of 2015, the EIB issued 18 statements on British loans.

The new loan is aimed at helping housing associations build homes across the country and comes on top of the £4.2 billion the EIB has already advanced for social housing and urban renewal in Britain since 1998, the latest statement said.

A lack of affordable homes has been a top political issue in Britain, with the shortage forcing many people particularly in London and the southeast to rent for longer or buy homes further away from urban centres.

REUTERS