Chancellor tells National Wealth Fund to back ‘higher risk’ projects

Rachel Reeves has told the National Wealth Fund to take on higher risk projects as part of the Government’s efforts to improve economic growth.

The Chancellor said she hopes the wealth fund, which was set up last year, will unlock £70 billion in private investment in the UK.

It comes after the Government called on regulators to cut red tape in recent months, suggesting that bureaucracy and caution has affected growth prospects.

As part of a new strategic steer, the Chancellor has called on the investment vehicle to consider “higher risk” opportunities in the hope it will drive faster growth.

Ms Reeves has previously indicated that the UK economy will need faster growth in order to help support long-term Government spending plans.

On Wednesday, the Chancellor confirmed that the fund’s economic capital limit will be increased from £4.5 billion to £7 billion, allowing it absorb greater risk and back more projects which could struggle to access private finance.

The fund is set to promote more direct investment into industries linked to the defence sector, after the Government confirmed plans to grow defence spending earlier this year.

Ms Reeves said: “My number one mission is kickstarting economic growth through our Plan for Change to make Great Britain a stronger, more resilient country and put more money into the pockets of working people.

“I am determined to go further and faster to get our economy growing.

“By directing tens of billions of pounds into the UK’s industrial strengths, we’ll deliver the high-skilled, high-paid jobs of the future in every corner of the country.”

The current boss of the fund, John Flint, has confirmed he will step down this summer, with a recruitment process now launched for his successor.