Businesses left to pick up the tab for Employment Rights Bill
6 November 2024
The Labour Government’s recent announcement of the National Wealth Fund has generated considerable excitement within the business community.
With £7.3 billion secured from the UK Infrastructure Bank, this initiative promises significant benefits for small and medium-sized enterprises (SMEs).
Infusion of capital
The National Wealth Fund will immediately increase the capital available to SMEs.
Chancellor Rachel Reeves and Business Secretary Jonathan Reynolds are leading the integration of the UK Infrastructure Bank and the British Business Bank.
This merger is set to unlock private sector investment and stimulate growth, making loans and investments more accessible to SMEs.
This is particularly crucial for start-ups and high-growth companies that often face challenges in securing funding.
Economic stability
The National Wealth Fund aims to stabilise the economy by investing in key infrastructure projects and green industries.
A stable economy reduces the risk of economic shocks and creates a more favourable environment for long-term planning and investment for SMEs.
Infrastructure enhancement
Infrastructure improvements are essential for SME growth. The £7.3 billion allocated through the UK Infrastructure Bank will focus on enhancing transportation networks, digital infrastructure, and energy supply.
Improved infrastructure lowers operational costs and boosts efficiency, directly benefiting SMEs.
Reformed British Business Bank support
The National Wealth Fund will bring reforms to the British Business Bank, enabling it to mobilise institutional capital more effectively.
This is particularly advantageous for SMEs, improving access to finance and supporting growth initiatives.
The British Business Bank’s track record as the UK’s largest venture capital investor underscores its capability to support SMEs in their expansion efforts.
Expert taskforce guidance
An expert taskforce, chaired by Dr Rhian-Mari Thomas of the Green Finance Institute and including notable figures such as former Bank of England governor Mark Carney and Barclays CEO CS Venkatakrishnan, will guide the fund’s strategy.
Their combined expertise ensures that investments are strategic and impactful, instilling confidence in SMEs that their interests are being effectively managed.
Localised support
The fund will work closely with local partners, including mayors, to tailor finance and investment offers to meet local needs.
This approach ensures that SMEs across the country benefit from the fund, regardless of location.
By addressing regional disparities and focusing on local growth, the National Wealth Fund creates a more inclusive and supportive business environment for SMEs.
Proven track record and future potential
The UK Infrastructure Bank has committed £3.3 billion and leveraged nearly £11 billion in private investment since its inception.
Similarly, the British Business Bank has facilitated £12.4 billion in finance, supporting over 23,000 UK businesses and creating over 39,000 jobs in 2023 alone.
The Government plans to introduce the National Wealth Fund through new legislation when parliamentary time allows, solidifying its role in driving long-term growth and prosperity for the country and significantly benefiting SMEs.
Further details about the fund and its implementation will be revealed later in the year.
For more information on how the National Wealth Fund can specifically benefit your business, contact us today.
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