The government is setting up a new national wealth fund to pull together key financial institutions in order to increase economic growth and private investment in the country. This will support new industries, create jobs, and fight climate change by enabling investments in green energy and other priority sectors.

The UK government has announced a new plan to create a National Wealth Fund that draws together vital institutions to deliver economic growth through unleashing private investment. That means capital investment in the industries of tomorrow and new technologies, according to plans published today by Chancellor Rachel Reeves and Business Secretary Jonathan Reynolds.

Reeves met the National Wealth Fund Taskforce at 11 Downing Street, joined by Ed Miliband, Secretary for Energy Security and Net Zero. Leadership of the taskforce is by the Green Finance Institute, and members include former Bank of England Governor Mark Carney and the CEO of Aviva, Amanda Blanc.

A new fund, the National Wealth Fund, will reset how operations are reconstituted by bringing together the UK Infrastructure Bank and the British Business Bank to unleash billions of pounds of private investment, generating returns for the taxpayer. In addition, £7.3 billion is being allocated to the UK Infrastructure Bank to invest immediately in priority sectors, on top of current funds.

Reforms will also be made to the British Business Bank to harness its investment pipeline and its track record as the biggest venture capital investor in the UK. Changes that will unlock billions for UK green and growth industries, providing impetus to its sustainable development and economic prosperity.

Rachel Reeves said urgent action had to be taken to enhance the economy and to attract investment. She added: “We need to go further and faster to rebuild Britain and make every part of our country better off.” Reeves reiterated that such action would be in the best turn for laying a strong ground for long-term economic growth.

The secretary of State for Energy Security and Net Zero, Ed Miliband, added that this National Wealth Fund would therefore provide impetus to job creation in the clean energy industries and increase energy independence to fight climate change. “We’re acting immediately, wasting no time, and working in lock-step with industry to unleash private investment and grow our economy,” said Miliband.

Dr. Rhian-Mari Thomas, chair of the taskforce, outlined how the fund would encourage global investment by providing private investors with the confidence to fund technologies and infrastructure that drive growth. Mark Carney also heralded the move, saying smart public investment can spur economic growth and pull in private capital into key areas such as heavy industry and manufacturing.

The initiative was warmley welcomed by industry leaders, including Aviva CEO Amanda Blanc and Barclays CEO C.S. Venkatakrishnan. They told him that if the vision enshrined in this fund were to be delivered, government and business must work together at every level. This plethora of opportunities presented by this fund could unleash significant private investment if it is structured properly.

The detailed plans for implementation will be decided by the government with the contribution of the industry and public finance institutions. Further details would be shared before the international investment summit later this year. Institutions involved would in the meantime continue their work in financing businesses and infrastructure across the UK.

The National Wealth Fund should lie at the heart of the government’s industrial strategy, which drives transformative investment to deliver jobs and support economic growth. New legislation will be brought forward to put the fund on a permanent footing as part of the UK’s economic landscape.

Also, in terms of regional needs and how to catalyze growth across the country, the fund shall work in conjunction with local partners, including mayors. Only recently has the Prime Minister met the Deputy Prime Minister to discuss with regional mayors how the fund can support local economies and unlock growth.

Three years since its establishment, the UK Infrastructure Bank has raised £3.3 billion in commitments and unlocked nearly £11 billion in private investment. Likewise, the British Business Bank has maintained more than 23,000 businesses and created over 39,000 jobs through better access to finance.

It is this very success that the National Wealth Fund is seeking to continue, engendering a collaborative environment between the public and private sectors to drive sustainable economic growth across the UK. Industry leaders hail the potential of this fund to turn the UK into a green and growth industries leader, securing prosperity for all its regions in the long term.