Does Britain need a National Wealth Fund?
Labour’s new investment vehicle isn’t quite what it says on the tin
On July 9th Britain’s new chancellor, Rachel Reeves, confirmed plans to set up a £7.3bn ($9.4m) National Wealth Fund (NWF). The details, including its personnel, risk tolerance and degree of independence, are yet to be ironed out. But in its outlines, the plan brings to mind the old cliché about the Holy Roman Empire—that it was none of those three things.
Despite its name, the NWF is not intended to be a sovereign-wealth fund, an open-ended pot of government-run investments along the lines of Singapore’s GIC or Australia’s Future Fund. Instead, Ms Reeves wants the NWF to be a development-bank-cum-investment-concierge. Focused narrowly on a handful of favoured green industries like steel, hydrogen and batteries, it will aim to “crowd in” three times as much private capital by biting off the riskiest chunk of projects. That vision makes it closer in spirit to the UK Infrastructure Bank (UKIB), a Boris Johnson-era green lending venture.
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