A common complaint about the way Britain handled its North Sea oil wealth is that it didn’t use the profits to create a ‘sovereign wealth fund’ – basically a state-run investment vehicle.
The Conservatives seem to be intent on ensuring that we don’t pass up the chance with the next energy revolution: shale gas. The manifesto is very supportive of this new energy source, particularly highlighting its potential to help with “rebalancing our economy”.
These funds, dubbed ‘Future Britain Funds’, will be used to make what the state deems strategic investments to support the economy over the long term. Here’s the full extract:
“People have long talked about the need to create UK sovereign wealth funds. We will now make this a central part of our long-term plan for Britain. We will create a number of such funds, known as Future Britain funds, which will hold in trust the investments of the British people, backing British infrastructure and the British economy. We anticipate early funds being created out of revenues from shale gas extraction, dormant assets, and the receipts of sale of some public assets. We will encourage pension funds with an interest in joining Future Britain funds to do so.”
Nor are FBFs the only new funds available: they’ll be joined by ‘University investment funds’, which will focus on increasing research and development capacity, and the National Productivity Investment Fund, which will pump £23 billion into trying to boost Britain’s low productivity.
Whether or not the managers of these funds will actually get the returns the manifesto anticipates is, of course, another question.