Wales’ Finance Secretary, Mark Drakeford, has called for the establishment of a sovereign wealth fund funded by profits from the Crown Estate, arguing it would allow the Welsh people to benefit directly from offshore wind projects in the Celtic Sea.
Speaking at a fringe event during the Labour Party conference, Mr Drakeford acknowledged that the proposal is not official Labour policy. However, he insisted the UK government, which rejected devolution of the Crown Estate in February, should “come to the table” to discuss the idea.
A sovereign wealth fund is a state-owned investment vehicle used by governments to manage revenue, often derived from natural resources or other public assets. Mr Drakeford said Wales’ natural wealth had historically been exploited, citing the coal industry as an example, and added that the country still grapples with the consequences. “The profits have all been siphoned off elsewhere,” he said.
He argued that the renewable energy sector is critical to Wales’ future, but steps must be taken to ensure local communities also see tangible benefits. “These things belong to us and this time, unlike the coal industry of the past, we must make sure that it is Welsh people who see the benefit,” he said.
Mr Drakeford suggested that a sovereign wealth fund could be financed by taking a small portion of revenue from each unit of energy generated by Crown Estate projects and reinvesting it into Wales.
Around the world, sovereign wealth funds are widely used. Norway’s fund, built from oil and gas revenues, is invested internationally and serves as a long-term savings plan, with profits benefiting Norwegian citizens. Saudi Arabia’s sovereign wealth fund made headlines in 2021 with its purchase of Newcastle United FC.
Wales’ First Minister, Eluned Morgan, also renewed calls for the devolution of the Crown Estate in her speech at the Labour Conference—a policy not currently supported by UK Labour. Mr Drakeford stressed that, while he supports devolution, it would not necessarily be required to create a Welsh sovereign wealth fund. “There is some middle ground here, what we need is for the UK government to come to the table to have those conversations,” he said.
Plaid Cymru unveiled plans last year to establish a similar fund from Crown Estate profits, but Mr Drakeford dismissed the idea that he was adopting their proposal. “Ideas don’t belong to any particular party, do they? If this is a good idea and if this is the right idea for Wales, I’m very keen to have that debate and then to see the right way to make it happen,” he said.
The fringe event, where Mr Drakeford spoke, focused on how taking assets into public ownership could help win back support from Reform UK, which advocates 50% public ownership of critical national infrastructure, including rail, energy, and water.
Meanwhile, Chancellor Rachel Reeves is expected to outline new rules prioritising British-built ships and domestically forged steel as part of her vision for a renewed economy in her conference speech on Monday.
