Written evidence submitted by Vertical Aerospace

Executive Summary
 

Vertical Aerospace supports the establishment of the National Wealth Fund (NWF) as a critical step in scaling the UK’s most innovative and strategically significant industries. For sectors like advanced aerospace, where development is capital-intensive and timelines are long, the NWF can play a unique role in unlocking growth, crowding in private capital, and ensuring strategic technologies and jobs are retained in the UK.

This submission addresses the Committee’s questions relating to the Fund’s potential to mobilise private investment, stimulate economic growth, support capital-intensive sectors, and the importance of flexible financial mechanisms and risk tolerance.

To succeed, the Fund must be flexible, commercially credible, and willing to take calculated risk. We welcome the Committee’s inquiry and offer reflections on how the Fund can meet its objectives – mobilising private investment, stimulating economic growth, and supporting capital-intensive innovation.

1. Introduction

Vertical Aerospace is a UK-headquartered advanced aerospace and clean technology company developing electric vertical take-off and landing (eVTOL) aircraft. We are pioneering zero-emission flight technologies and building sovereign capabilities in advanced battery development and aerospace manufacturing.

As a British innovator in a high growth, capital-intensive sector, we welcome the strategic intent the Chancellor has outlined behind the National Wealth Fund. The UK has a rare opportunity to secure a global leadership role in next generation technologies involved in the development of eVTOLs. The NWF, with its new focus on scale up support and capital-intensive innovation, can be a powerful lever to turn domestic innovation into long-term industrial strength.

We submit this response to support the development of a bold and effective NWF designed to unlock private investment at scale and help anchor industrial capability in the UK and exploit the value of technologies developed here. 

2. The role the National Wealth Fund should play

The UK is globally respected for its research and innovation base but has consistently struggled to translate R&D success into domestic industrial growth. That is, we have a strong track record in this country of developing promising technology, but an absence of available scale-up and risk capital. This leads to that technology, and the associated benefits, being progressed and harnessed elsewhere. The UK Infrastructure Bank was unable to support many such projects because of unduly constrained investment criteria; the NWF represents a clear opportunity to correct that.

The NWF can address this challenge through three key roles:

• Signalling government backing: public co-investment and financial support is a powerful signal to international investors that the UK is committed to long-term industrial capability and leadership. 
• Acting as a co-investor: the NWF should adopt a minority investor model, helping to crowd in private capital by validating high quality investment opportunities without distorting markets.
• Targeting capital-intensive scale-ups: deep tech companies often face the greatest financing challenges during scale-up. Calculated, risk-tolerant public investment is both essential at this stage, and economically rational for the UK.

There is now an opportunity to send a clear message about the UK’s willingness to nurture home-grown innovation through a more sophisticated and flexible risk and reward investment approach.

Principles for success

To achieve its ambition, the NWF must be designed to reflect the realities of UK industrial innovation; and deliver a mindset shift in the approach to evaluating risk. The following principles are critical:

• Flexible financial instruments: the NWF should deploy a range of financing tools – equity, debt and structured finance – depending on company maturity, capital needs and investment risk profile.
• Realistic risk-tolerance: hardware-intensive companies face significant pre-revenue costs. The NWF should be prepared to share in this risk (and the commensurate benefit) particularly where private finance is challenging to secure. Later-stage, lower-risk enterprises already have access to commercial capital and should not be the focus of state-sponsored mechanisms like the NWF. 
• Crowding in private capital: by acting as a confident co-investor, the NWF can partner with the businesses it supports to unlock substantially larger pools of private capital through its validation credentials. This should be central to its design.
• Long-term investment horizons: deep tech companies including aerospace require patient capital. The NWF should be equipped to support longer timelines of return to help mobilise private capital.

Vertical Aerospace as an illustrative case

Vertical Aerospace represents a clear example of the kind of challenge the Fund could help address – a high-growth, capital-intensive British business in a sector of long-term strategic value.

We are preparing to invest in advanced aircraft and battery manufacturing facilities in the UK, creating high-skilled jobs, anchoring supply chains and delivering dual-use technologies with both commercial and defence applications.

Our work directly supports the UK’s climate commitments and offers a platform for long-term industrial leadership. Realising the opportunity fully in the UK requires a bold and strategic investment partner, to ensure talent, technology and broader economic benefits do not migrate.

Conclusion

The National Wealth Fund is a welcome step in re-tooling the UK’s approach to industrial growth and innovation. With the right strategic focus and delivery model, it has the potential to catalyse the next generation of British industrial champions.

We welcome the direction of travel set by the Chancellor and hope the Committee’s work will help shape a Fund that is capable of backing strategic growth opportunities – and converting UK innovation into UK industrial leadership.

April 2025