The Office for Budget Responsibility (OBR) has said that government plans for a new national infrastructure bank will have no impact on growth.

The public body said that the bank is 147 times smaller than Germany’s, with the scale of operations at around 0.1 per cent of GDP a year.

Labour said that the government’s £12 billion funding allocation over five years “falls far short of the £20 billion recommended by the National Infrastructure Commission.”

It has also called for the government to “build up the bank’s balance sheet” to the level of other countries.

The opposition party added that the government should ensure the new bank has a “water-tight net zero mandate.”

“Far from transformative investment in infrastructure, the Government’s new bank won’t even plug the hole left by the European Investment Bank and will see us trailing way behind countries like Germany,” said Ed Miliband, Labour’s shadow business secretary.

He added: “The Government’s smoke and mirrors cannot distract from the fact we have been left without the green investment we need. We needed climate leadership from government but we got climate failure.

“In the year of COP26 when we are wildly off track to meet our climate targets, we needed the Chancellor to put a green stimulus at the centre of the Budget.”

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