Britain’s finance minister Rachel Reeves said she would “catalyze” billions of pounds of investment into growth sectors, such as gigafactories, green hydrogen and carbon capture, through a new wealth fund and partnerships with pension funds.
Reeves said the National Wealth Fund (NWF), based on the existing UK Infrastructure Bank, would work with industry partners, including mayors, to deploy up to 27.8 billion pounds ($36.2 billion) of capital.
The NWF, headquartered in Leeds, northern England, will have a broader mandate than just infrastructure, and will test “blended finance solutions” with private capital to allow government departments to take on additional risk, she said.
Reeves also announced a new partnership that could boost pension fund investment in UK companies.
The Labour Party, which came to power in July, promised in its manifesto to create a fund to spark growth and invest in clean energy projects, with a target to attract three pounds of private investment for every pound of public investment.
The announcements came as Reeves drew Britain’s International Investment Summit to a close.
“The decisions which lie ahead of us will not always be easy. But by taking the right choices to grow our economy and drive investment we will create good jobs and new opportunities across every part of the country,” Reeves said, adding the tax system would support wealth creation.
Pension funds will be able to invest alongside the British Business Bank, an institution that provided 3.5 billion pounds of capital to more than 23,000 businesses last year, the government said.
Louis Taylor, the bank’s chief executive, said the bank “will encourage more UK pension fund investment into the UK’s fastest growing, most innovative companies.”
Politicians and investors have sought routes to encourage more pension fund investment into Britain’s domestic market.
