UK Sovereign Wealth Fund
This debate pack has been prepared ahead of the debate on a UK Sovereign Wealth Fund to be held in Westminster Hall on Wednesday 14 December at 9.30am. The subject for debate has been chosen by John Penrose MP.
There is some disagreement about what defines a sovereign wealth fund, but generally:
- they are investment funds that are directly owned by a sovereign government
- they invest in a range of domestic and international assets seeking returns on their investment
- they are typically funded from government budget surpluses, often arising from significant exports of commodities such as oil
Over 30 countries have sovereign wealth funds, many are based on receipts from oil and gas. Norway has the largest fund with assets of $885 billion.
The UK government doesn’t have a sovereign wealth fund and the Government currently has no plans to introduce one; its focus is on reducing the deficit and decreasing government debt.
The sponsor of this debate, John Penrose MP, has published a report proposing that the UK establishes a sovereign wealth fund once the UK government reaches a budget surplus. Contributions to the fund would come from an element of income tax, and over the long term it would fund liabilities in the UK’s pensions and benefits system.
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