WALES could soon have its own multi-billion pound ‘Welsh Wealth Fund’ to invest in infrastructure and drive economic growth after the UK Government looks set to change it position on pension scheme investments.
Earlier this year Plaid Cymru MP Jonathan Edwards warned that a UK Government proposal to pool pension scheme investments into “wealth funds” with at least £25billion in assets would risk the funds of Welsh employers and employees being invested outside of Wales.
Wales’ councils are understood to have assets worth £12-13billion – a substantial figure in itself but almost half of the figure outlined by Chancellor last year.
Mr Edwards said he feared the £25billion threshold would result in “Welsh funds being pooled with an English region”. As the policy does not apply to Scotland or Northern Ireland, Mr Edwards said there was a “clear case for making sure that Welsh assets are combined into Welsh pools so that we are able to invest in infrastructure that will develop the Welsh economy.”
Since first raising his concerns the Carmarthen East and Dinefwr MP has tabled a parliamentary motion and challenged Treasury Ministers in the House of Commons to look again at the proposals for Wales.
The UK Government’s Minister for Local Government, Marcus Jones MP, has now given his consent for Welsh pension administering authorities to develop proposals for a Wales-only wealth fund.
Mr Edwards welcomed the change in policy branding it “a tremendous opportunity to make up for the years of chronic under-investment in Wales’ public infrastructure.”
Plaid Cymru MP Jonathan Edwards said:”As I have said in Parliament, Plaid Cymru has no opposition in principle to the creation of these wealth funds, indeed we first proposed something similar many years ago. Our innovative ‘Build for Wales’ policy in 2011 was partly aimed at creating a vehicle to draw down private investment for Welsh infrastructure development.
“We have always, however, been concerned that the assets built up by Welsh employees and employers would be pooled into a larger England and Wales fund which would see subsequent investments inevitably diverted outside of Wales.
“We are delighted that the Westminster Government has now conceded there is a case for a Walesonly fund.
“Welsh pension fund assets are worth more than £12 billion. Using just a fraction of this money could be a tremendous opportunity to make up for the years of chronic under-investment in Wales’ public infrastructure.
“It is imperative now, as details of the Welsh Wealth Fund are finalised before the July deadline, that the fund is set up with a clear mandate to invest in Welsh infrastructure in order to boost the Welsh economy. If utilised properly this could be a major shot in the arm for our economy.”