Labour launches National Wealth Fund to spur immediate investments across the UK

The Labour Government has introduced a new National Wealth Fund (NWF) that will funnel billions of pounds into projects across the UK to boost growth and unlock investment into sectors and solutions across key areas such as food and energy security.

Labour launches National Wealth Fund to spur immediate investments across the UK

The new NWF was unveiled by Chancellor Rachel Reeves, and work is already underway to align the UK Infrastructure Bank and the British Business Bank into its workings.

The NWF, immediately supported by £7.3bn in allocated funding through the UK Infrastructure Bank, aims to deliver transformative investments across every part of the country.

It will be chaired by the Green Finance Institute (GFI) and a supporting Taskforce, set up a few months ago, which includes former Bank of England Governor Mark Carney, Barclays CEO C.S Venkatakrishnan, Aviva CEO Dame Amanda Blanc and large institutional investors.

The Taskforce will commence work on identifying investment priority areas, and has presented its findings to Reeves and Secretary of State for the Department for Energy Security and Net Zero Ed Miliband.

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.

“We’re acting immediately, wasting no time and working in lock-step with industry to unleash private investment and grow our economy.”

Investment gaps

The Conservative Government committed to a legally binding net-zero emissions by 2050 target. However, in recent times, the Government has not only been taken to the High Court over its insufficient climate action and adaptation plans, but it has also been warned that a lack of long-term policy certainty is leading investors to choose other markets for green projects.

Investors have laid out five major policy demands for the Government to ensure the nation achieves its net-zero by 2050 goal. These include the introduction of a centralised long-term net-zero policy plan, a green industrial strategy, a supportive financial regulatory environment, a nature-positive transition and a strategy to enhance national climate adaptation and resilience.

Last year, the Institute for Public Policy Research (IPPR) cautioned that the UK is missing out on economic opportunities arising from the global transition to a net-zero carbon future, primarily due to the absence of a well-defined green industrial strategy.

Further details on how the NWF will contribute to the UK’s long-term investment plans, including an alignment with net-zero will be set out ahead of the government’s international investment Summit later in the year. There are also plans to cement the NWF into statute, creating legally binding parameters for its success.

The NWF will also work with local partners including Mayors to bring together finance and investment opportunities that are unique to regions, in order to spur growth across the country.

Dr Rhian-Mari Thomas, Chair of the Taskforce and CEO of the Green Finance Institute, said: “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 NWF 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.”

The NWF arrives just hours after Reeves, and Foreign Secretary, David Lammy, delivered their first speeches, promising to prioritise Britain’s energy transition as a key part of the nation’s industrial and foreign strategy.

Reeves had previously committed to unlocking £28bn of investment each year; however, the commitment was watered down earlier this year with Reeves placing the blame at the feet of the Tories.

Labour is now targeting £7.3bn for priority green manufacturing sectors, plus three times more private investment in these industries, as part of a forthcoming industrial strategy and a ten-year infrastructure strategy.

Related article: From renewable energy to resources and waste: 10 green policy priorities for the UK’s new Labour Government

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