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In a speech to some of the worlds biggest businesses and investors, Rachel Reeves revealed that restoring fiscal stability will be at the centre of her first Budgeton 30 October. She made the case that it is the only way to ensure government and business can invest with confidence.
The Chancellor went on to set out how two new bodies will drive long-term investment in Britain as the government works hand in hand with business to create new high skilled jobs right across the UK, helping make people better off.
Chancellor of the Exchequer Rachel Reeves, MP said:
When we said we would end instability, make growth our national mission and enter a true partnership with business we meant it.
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. That is the Britain we are building.
The first announcement from the Chancellor was that from today the UK Infrastructure Bank will operate as the National Wealth Fund (NWF), with its headquarters in Leeds.
The National Wealth Fundwill catalyse tens of billions of pounds of private investment into in the UKs clean energy and growth industries, including green hydrogen, carbon capture and gigafactories.
Building on UKIBs leadership and expertise, the NWF will go further, able to make investments that maximise the mobilisation of private investment. This will include the ability to trial new blended finance solutions with government departments that take on additional risk to facilitate higher impact in individual deals and performance guarantees.
The National Wealth Fund will have a total of 27.8 billion and will work with key industry partners, including mayors, to support delivery of their investment plans.
The Government will also bring forward legislation to give the NWF a broader mandate than just infrastructure, ensuring it is a permanent part of governments investment offer.
John Flint, CEO, at the National Wealth Fund said:
It is a huge privilege to be entrusted with the responsibility of leading the National Wealth Fund. Building on the strong foundations we have laid as UKIB, we will hit the ground running, using sector insight and investment expertise that the market knows and trusts to unlock billions of pounds of private finance for projects across the UK.
With additional capital to deploy against a bigger mandate, we stand ready to help the market invest with confidence, in support of the Governments growth ambitions.
Alongside this the Chancellor, together withSecretary of State for Business and Trade Jonathan Reynolds,announced a new British Growth Partnership as part of the British Business Bank (BBB).
The BBB already supports the UKs fastest growing, most innovative companiesdeploying 3.5bn to support over 23,000 businesses last year.
The British Growth Partnership will allow it to do more by creating a new way for the British Business Bank and institutional investors to invest in innovative companies together.
Leveraging the British Business Banks market expertise, these long-term investments will be made independently of government on a fully commercial basis. In the coming months, the British Business Bank will seek to raise hundreds of millions of pounds of investment for this fund, with the aim of making investments by the end of 2025.
Additionally, the government will implement a set of reforms to the British Business Banks financial framework that will increase its impact and increase its ability to respond flexibly to the market, including by putting the British Business Banks 7.9bn set of commercial programmes on a permanent footing.
Louis Taylor, CEO, British Business Bank said:
Todays announcement is a strong endorsement of the British Business Banks 10-year track record, market access and capabilities. By establishing the British Growth Partnership, the Bank will encourage more UK pension fund investment into the UKs fastest growing, most innovative companies.
In addition, reforms to the Banks financial framework, putting our 7.9bn commercial programmes on a permanent footing, means we can flexibly re-invest our investment returns over the long term to increase growth and prosperity across the UK.
Todays measures follow the Government announcingmore than 24 billion of private investment for pioneering energy projectsand thousands of jobs in the green industries secured ahead of International Investment Summit.
This adds to the announcement last week that up to 500 UK manufacturing jobs are set to be supported as bus operator Go Ahead confirms a major 500 million investment to decarbonise its fleet. This includes creating a new dedicated manufacturing line and partnership with Northern Ireland-based UK bus manufacturer Wrightbus.
And it also builds on the Government confirming funding to launch the UKs first carbon capture sites in Teesside and Merseyside. Two new carbon capture and CCUS enabled hydrogen projects will create 4,000 new jobs, in a boost for the economy and British industry, helping remove over 8.5 million tonnes of carbon emissions each year the equivalent of taking around 4 million cars off the road.
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Dame Julia Hoggett, CEO, London Stock Exchange Plc said:
It is critically important for the growth of the UK economy that home grown companies are able to access the investment they need to grow, scale and stay in the UK.
Access to meaningful UK capital at the scaling phase has been a long-recognised challenge and so we are delighted that British Growth Partnership is being established to help address this problem. This will also facilitate more investment by UK pension schemes into scaling UK companies, providing greater returns for their savers and giving UK investors a greater stake in the UK economy.
Sir Nicholas Lyons, Group Chair, Phoenix said:
The UK needs scale and skills to convert our brilliant science and technology start-ups and university spinouts into the successful and sustainable companies of tomorrow. British Growth Partnership willcomplement the private sector DC pension industrys undertakings under the Mansion House Compact to expedite this,directing investment to deliver the best returns for our pension savers.
Professor Sir John Bell, President, Ellison Institute of Technology said:
Making sure the best innovative British companies can access the capital they need to scale and stay in the UK is critical for the future of the economy. The Chancellors announcement today of the new British Growth Partnership, in addition to confirming 7.9bn of permanent capital for the British Business Bank, are both very welcome and significant steps forward in solving this problem
Sir Jonathan Symonds CBE, Non-Executive Chair, GSK said:
This is a welcome step; encouraging institutional investment into the UKs high-growth-potential companies can provide a real boost to the economy and generate better returns for individuals pension investments
Brent Hoberman, Chairman and Co-Founder, Founders Forum Group, Founders Factory, firstminute capital said:
Its great to see the new government taking concrete steps to amplify the Mansion House reforms. This new British Growth Partnership should help UK startups access further scale up capital to create more world leaders.
Saul Klein, Co-founder, Phoenix Court and Member of the Council for Science and Technology said:
The UK has more than 750 venture backed companiesgeneratingmore than $25m in revenue - this is more than France, Germany, Sweden and the Netherlands combined. These companies have created over 200,000 new jobs and continue to grow butthe UK still has $35bn less scaleup capital to support these companies than the United States Bay Area alone.
The governments continued support for the British Business Bank and its focus on addressing this scale up opportunity will be very much welcomed by these 750 companies as well as the cohorts coming behind them.
Peter Harrison, Group Chief Executive, Schroders plc said:
These are further helpful initiatives in creating an environment where risk capital can flow into strategically important industries. Every step is welcome in supporting future economic growth.
Edward Braham, Chairman, M&G said:
We welcome the creation of the British Growth Partnership which should unlock much needed investment into the UKs high growth innovative businesses.
The combination of private and public sector partnerships, underpinned by long term patient capital, is essential to create the conditions for sustainable growth.
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