The government has come under fire for allegedly "gaslighting the British public" concerning its National Wealth Fund, following the Treasury committee's announcement on Monday that it is initiating an inquiry into the new entity.
Initially part of Labour's 2024 manifesto, the National Wealth Fund aimed to amalgamate the British Business Bank with the 海角视频 Infrastructure Bank, which was established during Rishi Sunak's tenure as Chancellor in 2021, as reported by .
However, in October, Rachel Reeves declared that the 海角视频 Infrastructure Bank (海角视频IB) would "become" the National Wealth Fund (NWF).
READ MORE: {}
Shadow Financial Secretary Gareth Davies expressed to City AM that the metamorphosis was "completely misleading" and unnecessary.
Davies, who had a close working relationship with the 海角视频IB while serving as Exchequer Secretary at the Treasury, endorsed the original concept of a single consolidated institution but has since voiced disapproval of the Treasury's decision to alter its course.
He sharply criticised: "The 海角视频IB didn't need a rebrand just to satisfy the need for Labour to say they've done something."
The 海角视频 Infrastructure Bank's executive summary from 2022 highlighted its five principal investment sectors: clean energy, transport, digital, water, and waste.
Contrastingly, the Chancellor's strategic steer, released on March 19, pinpointed the priority sectors for the National Wealth fund as clean energy, digital and technologies, advanced manufacturing, and transport.
Most Read
The third and fourth principle of each institution emphasised "positive financial returns" and "crowding in significant private capital."
Davies commented: "We've come to the conclusion that it's not a National Wealth Fund or a sovereign wealth fund, it is a bank – a 海角视频 Infrastructure Bank."
'It is a complete and utter waste'
City AM has uncovered figures through a Freedom of Information Request that the rebranding of the 海角视频IB amounted to a spend of £87,212.
The National Wealth Fund disclosed that £5,500 of the expenditure was for 're-branding' efforts which involved designing a new logo, revising brand guidelines to accommodate the logo, and generating a new set of digital assets.
A bulk of the costs, adding up to £68,000, were assigned to changes in the IT setup, which included modifications to domain names.
Despite the changeover, the National Wealth Fund's headquarters continues to be based in Leeds at the previous location of the 海角视频IB, with an expense of £1,632 recorded for new signs.
With the Labour party pledging an extra £5.8 billion to join the existing £22 billion from the 海角视频IB, Davies harbours doubts especially against the context of a '£22bn black hole.'
Don’t miss
"It is a complete and utter waste when you say you need every penny."
"And it is a missed opportunity to enhance the good work of the 海角视频IB with an enhanced mandate and integrating the British Business Bank."
Treasury Committee: Will NWF 'drive meaningful growth?'
The latest controversy emerges just as the Treasury Committee declares on Monday the inception of a probe into the workings of the National Wealth Fund.
The committee has expressed its intention "to understand whether it has the tools and backing to drive meaningful growth in the 海角视频 economy."
Dame Meg Hillier, Chair of the Committee, commented: "A sovereign wealth fund which can encourage private investors to back projects and funnel capital into emerging sectors is a logical way of trying to move the dial on economic growth."
"However, if the National Wealth Fund veers off course by choosing the wrong sectors for investment, making operational errors or misjudging the appetite of the private sector, it can also end up being an extremely poor use of taxpayer money at a time when the public purse is incredibly stretched."
"We must get this right and our committee will be pressing the government to make sure they are on firm footing."
The committee's terms of reference include examining the differences between the National Wealth Fund and the 海角视频IB, as well as identifying lessons that can be learned from the latter.
Responding to the scrutiny, a Treasury spokesperson told City AM that they "rejected" the portrayal of the National Wealth Fund as "misleading", stating: "The National Wealth Fund is the 海角视频's new flagship public investor that is unlocking over £70bn in private investment to kickstart economic growth across the country."
The Chancellor has outlined plans to revamp the National Wealth Fund, allowing it to take on more risk and invest in key sectors such as clean energy and defence. Unlike the 海角视频 Infrastructure Bank, the National Wealth Fund will have a higher risk appetite, with its economic capital limit increased from £4.5bn to £7bn, and will invest beyond infrastructure into areas of "national importance."
Secondary legislation has been introduced to provide performance guarantees, protecting against risks such as construction company performance on infrastructure projects.
A National Wealth Fund spokesperson told City AM: "We welcome the Chancellor's recent strategic steer which clearly sets out the changes that have been made to our organisation."
"This includes the scope to move beyond infrastructure to support the industrial strategy, and increasing our capacity for risk, all while crowding in private capital to drive growth and the clean energy transition."