National Wealth Fund (NWF)
Rachel Reeves (Chancellor of the Exchequer) has announced the launch of a £7.3bn National Wealth Fund (NWF) aimed at drawing in substantial private sector investments in major UK infrastructure projects. The newly elected government seeks to attract return on investment of approximately £3 for every £1 of taxpayer money from private funds, focusing on developments such as ports, gigafactories, hydrogen, and steel projects.
Objective
The NWF will be established to act as a “concierge service” for investors and businesses, simplifying the investment process in the UK. The UK Infrastructure Bank, led by former HSBC chief executive John Flint, will manage these investments, with support from a revamped British Business Bank.
Behind the Scenes
Reeves announced the initiative after meeting with City leaders who form the specialised taskforce spearheading the project. Taskforce members include Amanda Blanc, CEO of Aviva; Paul Thwaite, CEO of NatWest; CS Venkatakrishnan, CEO of Barclays; and former Bank of England governor Mark Carney.
Fund Distribution
The new government has been developing the NWF for several months, with the taskforce appointed in March 2024 to specify the fund’s delivery, a key manifesto pledge. The NWF will focus on deploying £1.8bn to ports, £1.5bn to gigafactories, £2.5bn to clean steel, £1bn to carbon capture, and £500m to green hydrogen.
Reeves highlighted the UK’s favourable position for attracting investment amid political uncertainties in other major Western economies. She emphasised that the UK now offers a stable government with a clear plan, which stands out compared to other countries.
Incorporation into Law
The NWF is to be formally established within UK law, becoming a permanent institution central to the country’s long-term growth and prosperity. The head of the NWF is yet to be appointed, with details to be announced before the international investment summit later this year.
In related news, Business and Trade Secretary Jonathan Reynolds hosted a call with over 170 business and trade leaders, outlining his priorities: implementing an industrial strategy, supporting small businesses, resetting trade relations, and making work pay. Reynolds assured business leaders of a cross-government focus on connectivity and the grid, crucial for decarbonisation efforts. The Department for Energy Security and Net Zero will be key in delivering this agenda.
Sources :
Rachel Reeves launches £7.3bn national wealth fund | Economics | The Guardian
What a national wealth fund is and why Chancellor Rachel Reeves has launched one in the UK | Business News | Sky News
UK announces £7bn boost for new National Wealth Fund – The Banker
