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Parliament’s headed into recess and we’ve just given MPs some summer reading to get stuck into John: our briefing on the National Wealth Fund.
Later this year, the National Wealth Fund Bill should be presented to parliament, and we want MPs to be fired up and ready to table amendments to make sure it’s laser-focused on boosting homegrown clean, green energy and creating good jobs across the country.
Before we get into that though, let me introduce myself. I’m Ellie McLaughlin, Senior Policy and Advocacy Manager here at Positive Money. I focus on how the government and the Bank of England can work better together to finance the green transition - and the National Wealth Fund (NWF) has a key role to play.
But first off - what is it? You might remember hearing from us about this time last year, back when the NWF was first announced by the new government, as we explained some of the basics in a blog and video. |
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Essentially, it’s a public financial institution that exists to invest money given to it by the government, in line with its strategic objectives, that are also set by the government.
In March, we found out more about what these objectives look like: supporting regional and local economic growth, and tackling climate change. [1] But what’s still up for grabs is exactly how it will do this. |
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Since the very first announcement, we’ve been working behind the scenes with coalition partners including Greenpeace, the New Economics Foundation, and Green Alliance to analyse developments, and set out our vision of what the NWF should be to make it as effective as possible. This has taken many many hours of online meetings, emails, and documents with lots of edits! On such a technical topic like this one, having so many experts come together is invaluable.
In April, we submitted our evidence to the NWF Treasury Select Committee Inquiry laying out how we think the government can maximise the NWF’s success. Using our expertise to provide evidence and policy recommendations to parliamentary committees like this is a common strategy for us. In fact, we often end up being cited in their final published reports - which is exactly what happened with the Cash Acceptance inquiry back in May! [2]
Our coalition allies submitted evidence too, with many of them echoing recommendations we’ve been leading on. For example, our suggestion to give the NWF the ability to raise its own funds through issuing bonds (you can read more on that in our previous briefing paper). We’ll be keenly awaiting the Committee’s final report.
The NWF’s exact investment strategy is still up for grabs and a positive sign we’ve seen recently is the NWF being given direction to be proactive in investing in projects that we urgently need, countering a pervasive myth in economics that public investment ‘crowds out’ private investment. [3] But there’s still work to be done to ensure that the NWF invests in not just the riskiest new technologies like Carbon Capture, but tried and tested ways to boost green energy and help bring down bills. [4]
For example, the story that hit the headlines a few months ago of the Hornsea offshore windfarm in Yorkshire, that got scrapped in part because of the cost of finance - the NWF should be able to help get projects like this off the ground. [5]
The NWF is already operating, but the Bill needs to go through Parliament to cement its mandate and legal objectives. It’s a big opportunity to make sure it’s really focused on the green energy transition and delivering real impact for people across the UK, because we certainly don’t want a repeat of the Private Finance Initiative (PFI) scandals of the ‘90s.
To help ensure this, we’re pushing for more democratic governance of the NWF, with roles for energy workers and local leaders so their voices can be heard. Germany’s equivalent institution, Kreditanstalt für Wiederaufbau, includes union leaders and regional representatives on its board - we should have the same. [6]
So that’s why we sent our briefing to MPs ahead of the summer break, so they and their staff team have all the details when the NWF Bill arrives in parliament. If there’s opportunities to email your MP about this Bill, we’ll make sure to let you know.
The NWF has really gone under the radar compared to other government announcements, but it’s so important, John, because it could be a truly public financial institution designed to deliver for people and the planet. That’s why it’s one of our advocacy team's top priorities.
Thanks so much for your support,
Ellie McLaughlin, Senior Policy and Advocacy Manager, Positive Money |
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P.S. We hoped you liked this deep dive into some of our policy work! Let us know your thoughts by replying to this email.
[1] HM Treasury: Statement of Strategic Priorities to the National Wealth Fund [2] UK Parliament: Acceptance of Cash House of Commons Committee report Positive Money: Why we need to keep cash alive [3] Project Syndicate: The Crowding-Out Myth [4] Inside Track: Lack of finance is holding back existing, as well as new, green technology [5] BBC News: Blow to clean energy drive as major windfarm ditched |
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