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The National Wealth Fund aims to boost investment in clean energy, infrastructure and innovation. However, Shadow Financial Secretary, Gareth Davies warns that only a pro-investment, pro-growth environment will secure Britain’s economic future
Growth is not something policymakers or governments can wish into existence. Nor is growth something that can be achieved without recognising the role and power of private capital investment alongside governments.
We live in a world which in many ways is more challenging than in recent previous decades. Geopolitical tensions and even full-scale war in Europe mean many countries, including our own, are in the process of rearming and increasing investment in defence. Combined with ongoing efforts to reduce our global emissions in the face of climate change, there is also a demand for huge investment into renewable energy production and associated infrastructure to improve our energy security.
“To secure the growth that we all want to see, we need to harness the power of private capital”
This means governments around the world have a phenomenal need for capital. To build the infrastructure, fund the innovation, and ultimately deliver the growth that we need to tackle these challenges, private capital and investment needs to be mobilised at a much greater quantity and at a much quicker pace.
To achieve this, we must promote investment in British entrepreneurs, businesses and infrastructure across all sectors – from transport and defence to renewable energy.
We need to create an environment that is friendly to those wishing to invest. Instead of talking down our country, we should be championing the sectors and industries in which we are truly world-leading – areas such as life sciences; the creative sector; professional, financial and legal services; and now even AI. Private investment into these areas should be welcomed with open arms and the businesses they invest in should be empowered through pro-growth regulation and a pro-growth tax system.
We need to be open to the best and brightest in the world and back those who want to succeed, not pull people down when they do succeed. This means tackling the trend since July 2024 of wealth-creators, investors and innovators being driven out to places such as the US, Dubai or Milan thanks to a toxic cocktail of Labour tax and red tape.
We need to create and maintain institutions which are able to work with and listen to investors. In 2021, the previous government set up the UK Infrastructure Bank (UKIB). While rightly following strict principles of achieving policy aims, delivering a positive financial return and crowding-in private investment, the UKIB had clean energy as one of five priority sectors, recognition that energy infrastructure lies at the heart of any modern economy. In fact, the UKIB has been so successful that Labour embraced our idea, although they rebranded the organisation into the so-called National Wealth Fund. But our ambitions should not stop here.
To secure the growth that we all want to see, we need to harness the power of private capital. So far, the government might talk-the-talk of investment and growth, but they are driving our country into a doomloop of evermore taxation, borrowing and union-designed red tape. Until they realise this and turn off their hostility, many global private investors will simply continue to go elsewhere.