The Treasury could announce plans for a similar vehicle in next month’s Autumn Statement, according to two people familiar with the matter. Treasury officials have formulated a paper on the topic and are testing the idea with external experts, the people said.
The Canadian fund was launched in 2022 with $15 billion Canadian dollars , with the aim of speeding up investment in the green transformation and encouraging more private funds into emerging technologies. It followed America’s Inflation Reduction Act, which offers financing primarily for green projects.
A smaller fund could still help with seed capital and could attract co-investment from UK pension funds and other private investors, the people said. A more modest commitment may also be more palatable for Chancellor Jeremy Hunt as it could avoid clashes with the right of his party that might want funds to be used to pay for tax cuts ahead of next year’s general election, one of the people said.
The growth fund is one of several ideas being considered by the Treasury as a way to attract more investment in new technology companies while also encouraging UK pension fund to direct larger amounts of savings into higher growth investments.