National Wealth Fund (United Kingdom)

Last updated
National Wealth Fund
FormerlyUK Infrastructure Bank (2020-2024)
Company type Sovereign Wealth Fund
IndustryFinancial services
FoundedJune 2021
Headquarters Leeds, England, UK
Area served
 United Kingdom
Key people
AUM £27.8 billion (October 2024)
Owner Government of the United Kingdom
Website uknwf.org.uk

The National Wealth Fund (NWF), formerly the UK Infrastructure Bank, is the sovereign wealth fund of the United Kingdom. The fund is publicly owned with its sole shareholder being the Treasury Solicitor in the capacity of HM Treasury. The goal of the fund is to invest alongside the private sector in projects within the United Kingdom. The bank has a total capitalisation of £27.8 billion. The fund is a "strategic" sovereign wealth fund, targeting non-financial objectives such as development goals. [1] However, the fund's classification as a sovereign wealth fund is contentious. [2] [3] [4] [5]

Contents

History

2020–2024: UK Infrastructure Bank

Chancellor Rishi Sunak visits the UK Infrastructure Bank in Leeds. Rishi Sunak UK Infrastructure Bank Opening.jpg
Chancellor Rishi Sunak visits the UK Infrastructure Bank in Leeds.
The UK Infrastructure Bank logo UK Infrastructure Bank logo.svg
The UK Infrastructure Bank logo

Following the United Kingdom's decision to leave the European Union, access to financing from the European Investment Bank (EIB) was expected to be lost. In July 2018, the National Infrastructure Commission, recommended that if access to EIB financing was lost, “a new, operationally independent, UK infrastructure finance institution should be established by 2021.” [6]

Under the premiership of Boris Johnson, infrastructure emerged as a central focus of government policy. According to Anthony Seldon, “Johnson’s vision to transform Britain’s infrastructure was one of his animating spirits.” [7] An infrastructure bank would become part of the government's levelling-up policy. [8] The government also saw the bank as a way to enhance the quality of infrastructure projects undertaken by local government, and was intended increase the scrutiny of their investment proposals. [6] Additionally, the bank was intended to help with the government's legal obligation to reach net-zero carbon by 2050. [9] [10]

In November 2020, Chancellor Rishi Sunak presented a spending review to parliament. The review specified the creation of a new national infrastructure bank in the north of England. The bank would invest in infrastructure alongside private investment. [11] [12] The bank would be given two strategic objectives. Firstly, to help tackle climate change. Secondly, to support economic growth. [6]

Four months later, Chancellor Rishi Sunak presented the March 2021 budget to Parliament. The budget included further plans for the bank. The bank would be headquartered in Leeds, to support local growth and to help close the north–south divide. The new UK Infrastructure Bank was given initial capital amounting to £12bn, and was able to offer up to £10bn of government guarantees, with its final capacity being £22bn. [13] [14] In June 2021, the Leeds headquarters were opened, and in September, John Flint was appointed to be the first CEO. [8] [15]

In May 2022, the UK Infrastructure Bank Act was introduced to parliament. The bill intended to address concerns that the bank could be later sold off, like the Green Investment Group. [16] The UK Infrastructure Bank Act stipulates that the bank must publicly publish annual reports, and present them to parliament. [17] The UK Infrastructure Bank Act received royal assent in 2023. [17] [18] In January of that year, a Public Accounts Committee released a report analysing the bank's performance after its first 18 months in operation. The report concluded that while the UK Infrastructure Bank had made initial progress in deploying capital and piloting advisory functions, it faced significant challenges in recruitment, governance, and operational independence. [19] [20]

2024: National Wealth Fund

The National Wealth Fund Taskforce convenes. National Wealth Fund Task Force.png
The National Wealth Fund Taskforce convenes.

In September 2022, during a Labour Party conference, Shadow Chancellor Rachel Reeves introduced plans for a National Wealth Fund. [21] [22] The "National Wealth Fund Taskforce" was created to provide recommendations for the funds development. [23]

Ahead of the July 2024 election, the Labour Party had pledged to launch a National Wealth Fund as part of their election manifesto. [24] [25] After winning the election, Chancellor Rachel Reeves announced plans to align the UK Infrastructure Bank and the British Business Bank under a new National Wealth Fund. The new fund would receive £7.3bn in funding. [26] Shortly after, the National Wealth Fund Taskforce published their recommendations. One of the main recommendations was that the fund should be based inside an existing institution, such as the UK Infrastructure Bank. [23]

In October 2024, the UK Infrastructure Bank became the National Wealth Fund. The mandate of the fund was expanded beyond infrastructure to include a wider industrial strategy. [27] [28] The fund was advised to work 'in close partnership' with the British Business Bank. The fund received a scaled back cash injection of £5.8bn. This was £1.5bn less than the £7.3bn initially planned. [29]

See also

Related Research Articles

A spending review, or occasionally a comprehensive spending review, is a governmental process in the United Kingdom carried out by HM Treasury to set firm expenditure limits and, through public service agreements, define the key improvements that the public can expect from these resources.

Mubadala Investment Company PJSC, or simply Mubadala, is a state-owned global investment firm that acts as one of the sovereign wealth funds of the government of Abu Dhabi. The company was established in 2017 when then-named Mubadala Development Company and the International Petroleum Investment Company (IPIC) merged. Headquartered in Abu Dhabi, Mubadala also has offices in London, Rio de Janeiro, New York, San Francisco and Beijing.

<span class="mw-page-title-main">Rachel Reeves</span> British politician (born 1979)

Rachel Jane Reeves is a British politician who has served as Chancellor of the Exchequer since July 2024. A member of the Labour Party, she has been Member of Parliament (MP) for Leeds West and Pudsey, formerly Leeds West, since 2010. She previously held various shadow ministerial and shadow cabinet portfolios between 2010 and 2015 and from 2020 to 2024.

<span class="mw-page-title-main">Mohamed Mansour (businessman)</span> Egyptian businessperson and former politician (born 1948)

Sir Mohamed Mansour is an Egyptian-born British billionaire businessman and former politician. He is the chairman of the Mansour Group, a US$6 billion conglomerate. In October 2024, Forbes estimated his wealth at $3.3 billion. He served as the minister of transportation in Egypt between 2005 and 2009.

<span class="mw-page-title-main">Rishi Sunak</span> Prime Minister of the United Kingdom from 2022 to 2024

Rishi Sunak is a British politician who served as Prime Minister of the United Kingdom from 2022 to 2024. He was Leader of the Conservative Party from October 2022 to November 2024. Following his defeat to Keir Starmer’s Labour Party in the 2024 general election, he became Leader of the Opposition, serving in this role from July to November 2024. The first British Asian to hold those offices, he previously held two Cabinet positions under Boris Johnson, latterly as Chancellor of the Exchequer from 2020 to 2022. Sunak has been Member of Parliament (MP) for Richmond and Northallerton, previously Richmond (Yorks), since 2015. Following the stepping down of Boris Johnson in 2023 and Theresa May in 2024, combined with the loss of Liz Truss's seat, Sunak is the only former Prime Minister still remaining in the House of Commons.

The Mais Lecture has been hosted since 1978, on a mostly annual basis, by Bayes Business School, part of City, University of London.

<span class="mw-page-title-main">March 2021 United Kingdom budget</span>

The March 2021 United Kingdom budget, officially known as Protecting the Jobs and Livelihoods of the British People was a budget delivered by Rishi Sunak, the Chancellor of the Exchequer in March 2021. It was expected to be delivered in autumn 2020, but was postponed because of the COVID-19 pandemic. It succeeds the budget held in March 2020, and the summer statement and Winter Economy Plan held in summer and autumn 2020, respectively. The budget is the second under Boris Johnson's government, also the second to be delivered by Sunak and the second since Britain's withdrawal from the European Union. The budget was the first for government expenditure in the United Kingdom to exceed £1 trillion.

<span class="mw-page-title-main">Chancellorship of Rishi Sunak</span> Rishi Sunaks tenure at HM Treasury (2020–2022)

Rishi Sunak served as Chancellor of the Exchequer of the United Kingdom from his appointment on 13 February 2020 to his resignation on 5 July 2022. His tenure was dominated by the COVID-19 pandemic in the United Kingdom, with Sunak becoming a prominent figure in the government's response to the pandemic, giving economic support to struggling businesses through various schemes. He was also involved in the government's response to the cost of living crisis, UK energy supply crisis, and global energy crisis.

<span class="mw-page-title-main">October 2021 United Kingdom budget</span>

The October 2021 United Kingdom budget, officially known as the Autumn Budget and Spending Review 2021. A Stronger Economy for the British People, was a budget statement made by Chancellor of the Exchequer Rishi Sunak on 27 October 2021. It was the third and final consecutive budget delivered by Sunak before his resignation in July 2022.

<span class="mw-page-title-main">Akshata Murty</span> Indian businesswoman (born 1980)

Akshata Narayana Murty is an Indian heiress, businesswoman, fashion designer, and venture capitalist. She is the wife of former prime minister of the United Kingdom Rishi Sunak and the daughter of N. R. Narayana Murthy, a founder of the Indian multinational IT company Infosys, and Sudha Murty. She holds a 0.93 percent stake in Infosys, along with shares in several other British businesses.

<span class="mw-page-title-main">Premiership of Rishi Sunak</span> Period of Government of the United Kingdom from 2022 to 2024

Rishi Sunak's tenure as Prime Minister of the United Kingdom began on 25 October 2022 when he accepted an invitation from King Charles III to form a government, succeeding Liz Truss, and ended on 5 July 2024 upon his resignation. He is the first British Asian and the first Hindu to hold the office. Sunak's premiership was dominated by the Russian invasion of Ukraine, the Israel-Hamas war, the cost-of-living crisis, and the Rwanda asylum plan. As prime minister, Sunak also served simultaneously as First Lord of the Treasury, Minister for the Civil Service, and Minister for the Union.

<span class="mw-page-title-main">November 2022 United Kingdom autumn statement</span>

The November 2022 United Kingdom autumn statement was delivered to the House of Commons on 17 November 2022 by Chancellor of the Exchequer Jeremy Hunt, after being delayed by three weeks from its original scheduled date of 31 October. The budget addressed the ongoing cost of living crisis, and saw the announcement of a five-year package of tax increases and spending cuts designed to steer the UK through recession. An economic forecast published on the same day by the Office for Budget Responsibility (OBR) stated the UK had entered a recession after experiencing two quarters of a shrinking economy, and predicted the UK's economy would shrink during 2023. A reduction in households' disposable income was also forecast.

Sir Laurence Henry Philip Magnus, 3rd Baronet, CBE is a British executive who has worked as a financier in the City of London, and was appointed as the UK Prime Minister's Independent Adviser on Ministers' Interests in December 2022.

Eleanor Shawcross, Baroness Wolfson of Aspley Guise, is a British political advisor, who previously served as the Director of the Number 10 Policy Unit under Prime Minister Rishi Sunak.

The Advanced British Standard was a proposed replacement for the system of A-levels and T-levels in England. It was aimed at 16 to 19 year olds, and it accompanied a plan to increase the level of English and Maths taught to this age group.

<span class="mw-page-title-main">November 2023 United Kingdom autumn statement</span>

The November 2023 United Kingdom autumn statement was outlined to the House of Commons on 22 November 2023 by Chancellor of the Exchequer Jeremy Hunt. The statement, Hunt's second as Chancellor, came at a time when the governing Conservative Party was trailing in the opinion polls, with the Labour Party experiencing a double-digit lead, and was his last autumn statement before the next general election.

<span class="mw-page-title-main">Chancellorship of Jeremy Hunt</span> Jeremy Hunts tenure at HM Treasury (2022–2024)

Jeremy Hunt served as Chancellor of the Exchequer of the United Kingdom from his appointment on 14 October 2022 to his resignation on 5 July 2024, during the premierships of Liz Truss and Rishi Sunak.

<span class="mw-page-title-main">Chancellorship of Rachel Reeves</span> Rachel Reeves tenure at HM Treasury (2024–present)

Rachel Reeves became Chancellor of the Exchequer on 5 July 2024, upon her appointment by Prime Minister Keir Starmer, following Labour's victory in the 2024 general election. She succeeded Conservative chancellor Jeremy Hunt, and became the first woman to hold the office of Chancellor in its 708-year history.

<span class="mw-page-title-main">October 2024 United Kingdom budget</span>

The October 2024 United Kingdom budget was delivered to the House of Commons by Rachel Reeves, the Chancellor of the Exchequer, on 30 October 2024. She is the inaugural female to present a UK Budget, marking the Labour Party's first Budget in over 14 years. It covered Labour's fiscal plans, with a focus on investment, healthcare, education, childcare, sustainable energy, transport, and workers' rights enrichment.

References

  1. ↑ Nangle, Toby (2024-09-10). "Britain is building a new sovereign wealth fund — what can it learn from the others?". Financial Times. Retrieved 2024-10-27.
  2. ↑ "Does Britain need a National Wealth Fund?". The Economist . 2024-07-14. Archived from the original on 2024-07-14. Retrieved 2024-10-27.
  3. ↑ Worstall, Tim (2024-07-10). "Why the National Wealth Fund won't pay off". CapX. Retrieved 2024-10-27.
  4. ↑ Pratley, Nils (2024-06-19). "Advice to Rachel Reeves: rename the national wealth fund". The Guardian. ISSN   0261-3077 . Retrieved 2024-10-27.
  5. ↑ Lim, Guanie; Li, Chen; Aweke, Wellington N. K. (2024-09-01). "The UK's New Sovereign Wealth Fund: Some Preliminary Observations". GRIPS Discussion Papers.
  6. 1 2 3 "The Creation of the UK Infrastructure Bank - NAO report". National Audit Office (NAO). 2022-07-01. Retrieved 2024-10-28.
  7. ↑ Seldon, Anthony (2023). Johnson at 10 (1st ed.). United Kingdom: Atlantic Books (published 2023-05-04). p. 110. ISBN   978-1838958022.
  8. 1 2 "Former HSBC boss John Flint to run new UK infrastructure bank". www.ft.com. Archived from the original on 2021-09-01. Retrieved 2024-10-27.
  9. ↑ Harvey, Fiona (2021-03-05). "New infrastructure bank won't help UK reach net zero, says Labour". The Guardian. ISSN   0261-3077 . Retrieved 2024-10-27.
  10. ↑ Nelson, Eshe (2023-08-10). "In Global Race to Offer Green Subsidies, U.K. Prefers Slow and Steady". The New York Times . Archived from the original on 2023-10-31.
  11. ↑ Ambrose, Jillian (2020-11-25). "Rishi Sunak sets out £100bn investment in infrastructure". The Guardian. ISSN   0261-3077 . Retrieved 2024-10-27.
  12. ↑ Ashcroft, Michael (2023-09-19). All to Play For: The Advance of Rishi Sunak (1st ed.). Biteback Publishing. p. 223. ISBN   978-1785907968.
  13. ↑ "Budget 2021: UK Infrastructure Bank to be based in Leeds". BBC News. 2021-03-03. Retrieved 2024-10-27.
  14. ↑ "UK's first infrastructure bank to boost climate goal investment". www.ft.com. Archived from the original on 2022-04-07. Retrieved 2024-10-28.
  15. ↑ "Leeds' new UK Infrastructure Bank opened by chancellor". BBC News. 2021-06-17. Retrieved 2024-10-27.
  16. ↑ Plimmer, Gill. "UK Infrastructure Bank criticised for investing in third party funds". www.ft.com. Archived from the original on 2022-06-23. Retrieved 2024-10-28.
  17. 1 2 "UK Infrastructure Bank Act 2023".
  18. ↑ "The UK Infrastructure Bank Act 2023 has been passed by Parliament". JD Supra. Retrieved 2024-10-28.
  19. ↑ Plimmer, Gill (2023-01-25). "UK infrastructure bank criticised for misdirecting project funding". www.ft.com. Archived from the original on 2023-09-25. Retrieved 2024-10-28.
  20. ↑ "The Creation of the UK Infrastructure Bank". 2023-01-25.
  21. ↑ "Labour conference: Rachel Reeves pledges to spend top rate tax on more nurses". BBC News. 2022-09-26. Retrieved 2024-10-28.
  22. ↑ Saber, Ali (2024-01-09). "Sovereign wealth funds in a post-pandemic landscape: a UK perspective". University of Sussex: 225 – via ResearchGate.
  23. 1 2 "A closer look at the government's £7.3bn national wealth fund". www.ftadviser.com. Retrieved 2024-10-27.
  24. ↑ Makortoff, Kalyeena (2024-07-09). "What is the national wealth fund and what will it invest in?". The Guardian. ISSN   0261-3077 . Retrieved 2024-10-27.
  25. ↑ Starmer, Keir (2024-06-22). "Economic growth is the only solution to Britain's problems – and we will deliver it". The Telegraph. ISSN   0307-1235 . Retrieved 2024-10-28.
  26. ↑ "New £7bn National Wealth Fund to start green investment 'immediately'". www.ft.com. 2024-07-09. Archived from the original on 2024-07-10. Retrieved 2024-10-28.
  27. ↑ Nolsøe, Eir; Price, Chris; Wallace, Tim; Jasper, Christopher (2024-10-14). "Chancellor shrinks public funding pot for Britain's new National Wealth Fund". The Telegraph. ISSN   0307-1235 . Retrieved 2024-10-27.
  28. ↑ "Reeves pledges end of instability as she announces new National Wealth Fund". The Independent. 2024-10-14. Retrieved 2024-10-27.
  29. ↑ "Rachel Reeves cuts National Wealth Fund budget despite UK investment drive". www.ft.com. Archived from the original on 2024-10-14. Retrieved 2024-10-27.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.