UK to ‘align’ Business Bank, UKIB under Wealth Fund

UK finance minister Rachel Reeves

UK finance minister Rachel Reeves and UK business secretary Jonathan Reynolds have instructed their officials to begin work to “align” public finance institutions the UK Infrastructure Bank and the British Business Bank under a new UK National Wealth Fund “that will invest in the new industries of the future.”

The move came as Reeves and Ed Miliband, UK Secretary of State for the Department for Energy Security, convened a meeting of the National Wealth Fund Taskforce at 11 Downing Street to kick start this work.

Chaired by the Green Finance Institute, the Taskforce includes former Bank of England Governor Mark Carney, Barclays CEO C.S. Venkatakrishnan, Aviva CEO Amanda Blanc and large institutional investors.

Under the UK’s plans, the National Wealth Fund will bring together key institutions and a “compelling” proposition for investors.

The UK government said £7.3 billion of additional funding will be allocated through the UK Infrastructure Bank (UKIB) so investments can start being made immediately, focusing on further priority sectors and catalysing private investment at an even greater scale. This funding is in addition to existing UKIB funding.

The UK government said reforms will be made to the British Business Bank, which is overseen by the UK Department for Business and Trade, “to ensure it can mobilise the UK’s deep pools of institutional capital by harnessing its pipeline of investments and track record as the UK’s largest investor in venture capital.”

Since it was established three years ago, the UK Infrastructure Bank has committed £3.3 billion and unlocked nearly £11 billion in private investment.

The British Business Bank, which supports SMEs to grow by improving their access to finance, has unlocked £12.4 billion of finance, and in 2023 alone funded over 23,000 UK businesses supporting the creation of over 39,000 jobs.

Reeves said: “I have previously committed to establishing a National Wealth Fund. I am now going further by bringing together key institutions.

“We need to go further and faster if we are to fix the foundations of our economy to rebuild Britain and make every part of our country better off.

“That is why in less than a week we are establishing a new National Wealth Fund and bringing together the key institutions that will help unlock investment in new and growing industries.”

Miliband said: “Our Mission to make Britain a clean energy superpower is about investing in Britain. Our National Wealth Fund will help create thousands of jobs in the clean energy industries of the future to boost our energy independence and tackle climate change.

“We’re acting immediately, wasting no time and working in lock-step with industry to unleash private investment and grow our economy.”

Dr Rhian-Mari Thomas, Chair of the Taskforce and CEO of the Green Finance Institute, said:  “The Taskforce recommendations set out how a combination of catalytic capital, deployed in partnership with a government delivering policy certainty, can make the UK the destination of choice for global investment.

“The National Wealth Fund will reshape the way we approach public, private risk-sharing, providing private investors with the confidence needed to fund the technologies and infrastructure needed to drive growth and create new jobs across the UK.”

Carney said: “This new government has rightly identified infrastructure investment as a core enabler of building high value, low carbon, competitive industries.

“The smart use of public investment via the National Wealth Fund can kick start economic growth and crowd in private capital to vital sectors including ports, heavy industry and manufacturing.”

NatWest Group CEO Paul Thwaite said: “The National Wealth Fund has the potential to accelerate the transition and address some of the fundamental barriers that have existed to date.

“As the UK’s leading bank for business, we will continue to support the government in the development of the National Wealth Fund, and ensure it delivers on its objectives to drive the green economy whilst also supporting communities, businesses and industry across the regions and nations of the UK.”

Barclays CEO Venkatakrishnan said: “The recommendations of the National Wealth Fund Taskforce, of which I have been a member, set out some important ways in which this can be done.

“In particular, I welcome the ambition to review and potentially simplify the existing economic development institutions, with the aim of making it easier for our corporate and business clients to access the partnership finance that is often needed to get infrastructure and other net zero projects off the ground.”


Len Shackleton, Fellow at the Institute of Economic Affairs, the right-wing, free market think tank: “I wish this new initiative well, but the NWF needs to be realistic about what government can do.

“Investment is important, but it needs to be sensible and analysis of potential returns needs to be hardnosed. Facile objectives – like becoming a ‘clean energy superpower’, whatever that fantasy means – should be ditched.

“We need to boost not just the quantity but also the quality of investment. 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. Sometimes, pension funds and other private investors who paid too much attention to the government of the day also lost out.

“The government is promising ‘policy certainty’. But this is nothing new, with many past governments forced to backpedal due to unforeseen events.

“When, long ago, a previous Labour administration set up the National Enterprise Board, it was justified as promoting advanced technology in profitable firms. But the wind changed, and with rising unemployment, 95% of government funds went into attempts to revive lame ducks.

“The government should always remember that it isn’t just cautious investors who hold new projects back. The mass of regulations and prohibitions, plus an increasingly unfavourable corporate tax regime, inhibit much potential investment spending.

“The government will need to attack these issues as well. But that’s inch-by-inch hand-to-hand fighting, not just making grand declarations and sticking new signs on government offices.”

Louise Hellem, CBI Chief Economist: “The green economy is one of the UK’s highest-growth sectors and one the Government is right to prioritise. Businesses are ready to play their part in realising green growth that drives investment and new jobs across the country – and is essential to meeting our 2050 net zero commitment.

“The investment required will not come from the public or private sector alone. Investors and industry support the Task Force’s recommendations for a green catalytic fund that derisks low carbon investments and see it as a vehicle that will crowd-in private finance to deliver decarbonisation infrastructure.

“Having a flexible investment mandate, aligned to net zero policy and wider industrial strategy, will give investors confidence that the fund provides long-term support targeted at addressing market failures. Offering a range of financial instruments, delivering via existing institutions and coordinating with other investment vehicles will also help industry to access appropriate support at speed.

“Businesses want clarity about how the National Wealth Fund will operate alongside a newly introduced GB Energy and are keen to work with the Task Force to ensure that its implementation delivers on our shared objective for UK green growth.”