To stimulate investment and modernize the British economy, the UK government, led by Prime Minister Keir Starmer and Chancellor of the Exchequer Rachel Reeves, launched the National Wealth Fund.
The initiative is designed to spearhead the government's investment strategy to attract significant private capital to expand industries and accelerate economic growth. The fund is also planned to address the challenges of achieving net-zero emissions.
On Monday, Reeves unveiled plans to boost housing construction and remove barriers to new infrastructure development. Following this, the government announced the immediate allocation of 7.3 billion pounds ($9.35 billion) of public funding through the UK Infrastructure Bank to boost investment. The aim is to use this value to attract three times as much private capital for investments in sectors such as ports, hydrogen, automotive and steel.
British Business Bank will be integrated into the New Wealth Fund, which will be linked to the Government's investment agenda. The UK aims to achieve an annual increase of between £50 billion and £60 billion in investment to achieve its net zero targets.
Labor won a decisive victory under Starmer in last week's parliamentary election. Starmer has actively sought to change the traditional image of the party and has engaged private investors to support this change. Since the Brexit vote in 2016, business investment in the UK has been low and many parts of the country continue to lag behind London in terms of productivity.
Details on the management and operational strategy of the National Wealth Fund will be developed in the coming months, with the government considering expert advice. Ryan-Marie Thomas, CEO of the Green Finance Institute and one of the advisors, stressed the importance of a coherent investment framework for investors. Thomas highlighted that creating an umbrella organization would reduce the complexity and fragmentation of the current investor landscape.
The London School of Economics has previously pointed to the potential for overlap between the functions of the National Wealth Fund and the functions of existing state investment systems. In addition to the National Wealth Fund, Labor plans to establish Great British Energy, a new state-owned energy company.
To stabilize the position of the National Wealth Fund, the government will introduce new legislation to incorporate the fund into law, ensuring its continued existence as a financial institution. The Treasury has confirmed that the measures will be taken to strengthen the role of finance in the UK's investment strategy.
Reuters contributed to this article.
This message is translated with the help of artificial intelligence. For more information, see our Terms of Use.
“Reader. Infuriatingly humble travel enthusiast. Extreme food scholar. Writer. Communicator.”
