Rachel Reeves hopes to raise £22 billion from private sector
Precise details of Labour's policy plans are hard to come by, but one thing is clear: “The sovereign wealth fund will be a critical tool in our arsenal for delivering economic growth,” said shadow chancellor Rachel Reeves.
Reeves has pledged to create a British sovereign wealth fund if Labor wins power, using it to “create good jobs and spreading productivity to all parts of the country.”
There is just one rather big problem: where will the money come from?
It is difficult not to be swayed by the all-consuming power and scale of sovereign wealth funds.
Worldwide, 175 such funds manage almost $12 trillion (£9.4 trillion). It is generally a way of investing countries' oil wealth, ensuring that countries will remain rich even if fossil fuel revenues dry up.The Norwegian fund is the world's largest, worth about $1.3 trillion. This defense budget is supported by the country's North Sea industry: Oslo earned the equivalent of £72.5 billion from oil in 2023.
The sovereign wealth fund has helped keep the country's public finances healthy. Apart from the pandemic year of 2020, Norway has consistently posted budget surpluses ranging from 4% to 26% of GDP every year this century.
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