Back in 2003 Colin Hines, Alan Simpson (then a Labour MP) and I wrote a paper called People's Pensions. Published by the New Economics Foundtion, it argued that pensions should be invested in UK infrastructure projects and that this was possible if UK local authorities, universities, hospitals and others issued bonds for this purpose, with returns being under-written by the government. We predicted nothing less than a savings revolution.
Roll on thirteen years and this was in the Sunday Telegraph this weekend:
Radical pension reforms are being prepared by the Government to help millions of savers get better returns, The Sunday Telegraph has learnt.
Ministers across Whitehall are working on schemes to get pension funds investing in building projects ahead of the Chancellor’s Autumn Statement.
Energy projects such as nuclear power stations, railway schemes including HS2 and new broadband roll-outs are most likely to benefit.
It is seen as a “win-win” because savers would get a good return on investments in difficult circumstances while funding a new infrastructure drive announced by Philip Hammond, the Chancellor.
As the Telegraph also noted:
A government source said: “If you’ve got a long-term infrastructure need why wouldn’t we be looking to put sensible money into that?
“Pension funds need to invest their money, they don’t want it sitting in cash or government bonds. If you can put it into something that can get them a decent return, that is far better.”
One idea being considered is to give regional mayors powers to create “city bonds”, raising up to £1 billion that would be underwritten by the Treasury.
It's just a shame it's taken thirteen years - or a third of many people's working lifetime - for this very obviously desirable option to win favour.
This is how to do it.