Labour’s National Wealth Fund hounded with calls for clarity
Labour’s National Wealth Fund (NWF) faced renewed pressure on Wednesday as the Treasury Committee kicked off its inquiry into the new body.
The NWF’s ability to boost economic growth across the country was the subject of questions posed by MPs to investment industry leaders.
Its status as a “wealth fund” came under fire against comparisons of international funds, such as Norway’s.
Conservative grandee Harriet Baldwin said it was “a misnomer to convince the British public this is an actual wealth fund.”
The UK’s NWF, which was set up by Chancellor Rachel Reeves in 2024, has £7.1bn in proposed funding and aims at crowding investment with a three to one ratio of private to public money.
Comparatively, the Saudi Arabian model of a national wealth fund has over $700bn assets under management.
Joe Dharampal-Hornby, head of public affairs and communications at UK Sustainable Investment and Finance Association, said the NWF would need to “work out what role it plays” in an ecosystem alongside the British Business Bank and GB Energy.
He added “there is still a fair amount of uncertainty” about the “exact role” the NWF would play in the landscape of other institutions.
Chris Cummings, chief executive of the Investment Association, said the investment industry would “welcome further clarity”.
Metrics need to be ‘really clear’
The panel of industry leaders also named different avenues for how the success of the national wealth fund will be measured.
Cummings said there was a “number of metrics” including “capacity building in the market place.”
But, Signe Norberg, head of external affairs at Aldersgate Group, said “socioeconomic benefits that come alongside investments” and “local jobs” created would be a determining factor.
Cummings later emphasised the metrics needed to be “really clear” and “establish a hierarchy” in order to generate success.
The National Wealth Fund was originally a fixture of Labour’s 2024 manifesto aiming to consolidate the British Business Bank and UKIB which launched under Rishi Sunak’s Chancellorship in 2021.
But in October 2024 Reeves announced the (UKIB) would “become” the National Wealth Fund (NWF).
City AM revealed earlier this year the rebrand cost £87,212.
Chancellor Rachel Reeves’ strategic steer on the NWF in March bears distinct similarities to the UKIB’s executive summary in 2022, each outlining clean energy, transport and digital as target areas of investment.
Shadow Financial Secretary Gareth Davies accused the government of “gaslighting the British public” over what the National Wealth Fund actually is.
“The UKIB didn’t need a rebrand just to satisfy the need for Labour to say they’ve done something,” he told City AM in March.