9 JULY 2024 | NEWS
The new Chancellor, Rachel Reeves, has announced plans for a £7.3bn National Wealth Fund (NWF) to attract private investment for infrastructure projects. The announcement fulfils a key Manifesto pledge for the Labour Party and forms part of Reeves’ aim to achieve investment-led economic growth.
The NWF, which is to be established within the next week, aims to attract private sector investment for infrastructure and industry, including green energy. Under the plans, the NWF will bring together existing institutions and will incorporate some funding allocated by the previous Government.
Reeves said that establishing the NWF will “bring together key institutions that will help to unlock investment in new and growing industries”.
The new Energy Security and Net Zero Secretary, Ed Miliband, said it “will help create thousands of jobs in the clean energy industries of the future to boost our energy independence and tackle climate change”.
The NWF will bring together the existing UK Infrastructure Bank (UKIB) and British Business Bank. Existing UKIB funding will be utilised, along with £7.3bn of additional funding announced by Reeves.
The announcement is a key pillar of the new Government’s plan to achieve higher rates of economic growth by increasing investment flowing into the country. It puts into action a ‘Securonomics’ strategy that Reeves outlined as Shadow Chancellor, including in the prestigious Mais lecture earlier this year.
‘Securonomics’ combines a more active role for the state with high levels of private investment. This private investment means that, theoretically, the state can become more assertive in the economy without high levels of borrowing.
It is built upon the view that Britain was lacking a clear economic strategy as the world became more uncertain, leaving the country poorly exposed to geopolitical shocks such as the Russian invasion of Ukraine. It relies upon political stability and clear government direction to generate the confidence that would lead to greater investment.
The NWF has been drawn up by a Labour-created taskforce since March, which brought together experts such as former Bank of England Governor Mark Carney and Barclays CEO C. S. Venkatakrishnan.
However, Professor Len Shackleton from the Institute for Economic Affairs warned that the NWF risked wasting public money. He said: “In the past, governments have been far too influenced by fashionable boondoggles – nowadays, anything with ‘green’ in the title should ring warning bells – and have wasted vast amounts of taxpayers’ money.”
He further warned that the Government would also need to “attack” the “mass of regulations and prohibitions, plus an increasingly unfavourable corporate tax regime” as “it isn’t just cautious investors who hold new projects back”, pouring cold water on the Government’s plan to attract investment.
The project is different to a sovereign wealth fund, which would involve the investment of budget surpluses for use by future generations. The NWF aims to attract £3 of private investment for every £1 of taxpayers’ money.
The Government has stated that further details will be announced over the coming weeks, with Parliament due to rise for its summer recess shortly thereafter.
What worries me about this attempt to attract investment is that it will encourage further involvement of companies buying up public assets as happened under grocer’s daughter Thatcher.
The most urgent and essential issue that the UK needs is sorting out the illegal, unhealthy discharge of untreated filthy shit into our rivers and seas. Our country is the one of two or three countries in the world which has privatised water. Bloody MPs from not only the profit motivated Tories but also from other parties turn a blind eye to this discharge of untreated
‘ sewage ‘ a word which many people don’t understand. I prefer to call it shit – a word which everyone understands ! I wonder what Ed Miliband
the former failed leader of the Labour Party now the dubious champion of the environment !
Really believes in !