UK Chancellor Rachel Reeves has launched a National Wealth Fund with £7.3 billion of state funding to attract private investments for boosting economic growth in the UK. The taskforce, led by prominent figures, will focus on key industries like green steel and industrial decarbonization.
While this initiative by the new Labour Government includes an allocation of £7.3 billion ($9.1 billion) in state funding, the goal is to attract approximately three times this amount in private investments, primarily from pension funds, to finance the fund.
The Chancellor convened a nine-member National Wealth Fund Taskforce at No. 11 Downing Street, which includes prominent figures such as former Bank of England governor Mark Carney, Barclays CEO CS Venkatakrishnan, and Aviva CEO Amanda Blanc. The taskforce’s focus will be on five key industries: green steel, green hydrogen, industrial decarbonization, gigafactories, and ports.
Reeves emphasized the urgency of driving economic growth, stating the need to “go further and faster” to reconstruct the UK’s economic foundations. The investments will be managed by the UK Infrastructure Bank, in collaboration with the British Business Bank, with reforms planned for the latter.
Rhian-Mari Thomas, CEO of the Green Finance Institute, who chaired the taskforce, expressed optimism about the initiative’s potential to catalyze initial public investment and attract greater private investment over time. Mark Carney highlighted the government’s strategy to use public investments to kick-start economic growth and invite private capital into vital sectors.
Energy Security and Net Zero Secretary Ed Miliband said: “Our Mission to make Britain a clean energy superpower is about investing in Britain. Our National Wealth Fund will help create thousands of jobs in the clean energy industries of the future to boost our energy independence and tackle climate change.”
The Labour Government’s broader aim is to use this national wealth fund to support high-growth and green industries, thereby enhancing infrastructure and economic sustainability across the country. The project seeks up to £57 billion in private investment by 2030 to fully achieve its objectives.
Dr Rhian-Mari Thomas, Chair of the Taskforce and CEO of the Green Finance Institute, commented: “The Taskforce recommendations set out how a combination of catalytic capital, deployed in partnership with a government delivering policy certainty, can make the UK the destination of choice for global investment. The National Wealth Fund will reshape the way we approach public, private risk-sharing, providing private investors with the confidence needed to fund the technologies and infrastructure needed to drive growth and create new jobs across the UK.”
While £7.3bn is a large amount of money, it is dwarfed by the sovereign wealth funds of many other countries. For example, Norway’s Government Pension Fund Global has amassed $1,058.05 billion while the China Investment Corporation has $941.40 billion.
