Slowly but surely Labour’s creeping back to People’s QE. It could deliver a pension revolution at the same time

Posted on

The Guardian has noted today that:

Labour is to begin courting regional mayors and councils over its plans for £250bn of transport and infrastructure spending, promising to prioritise projects that boost productivity and help the rest of the country catch up with London.

Speaking to the Guardian, Peter Dowd, the shadow chief secretary to the Treasury, said the party would open a series of consultations with local leaders over the coming months on its proposals to help close the regional divide.

One of the first policy proposals I ever wrote was for 'People's Pensions' based on local authority bonds. With Colin Hines and Alan Simpson, then an MP and close associate of John McDonnell and Jeremy Corbyn I argued that we needed to:

create an entirely new investment framework, completely free of the stock market, to provide a secure and safe place in which an individual or company pension scheme can invest to provide for a pension in retirement.

This was possible, we argued, if:

People’s Pension [were] backed by People’s Pension Funds. These entirely new funds [would] be created to provide a way in which pension contributions can be invested in the building of new public infrastructure projects such as:

• schools and universities

• hospitals and other health facilities

• transport systems (including railways, trams and bus networks)

• social housing

• sustainable energy systems

And to organise these investments:

A People’s Pension Fund [would] be specifically linked to a:

1. government department

2. local authority

3. other statutory authority e.g. an NHS Trust or an education authority

4. charity or other public not for profit body undertaking public work e.g. housing trusts

This organisation will be called the “sponsor” of the People’s Pension Fund. The People’s Pension Fund will raise the money needed to build the infrastructure projects that these bodies need in order for them to undertake their work.

This would mean that a person wishing to make a pension contribution in this safe and secure way would, we suggested:

be able to choose between investments in the type of services they think desirable and/or in the area/region of their choice.

Quite specifically we argued that:

The possibility of People’s Pension Funds being promoted for separate localities or regions would be strongly encouraged, especially for health, housing and education services. Local People’s Pension Funds would increase the identification between the person saving and the asset they had helped fund, and so promote the ideas of:

1. common ownership

2. localisation

3. ethical investment

4. sustainable local communities

5. provision of a resource base that people might need now and in their retirement (such as hospital facilities) from the savings they have made during their working life.

Roll on a few years and People's QE developed this idea with the backing that state underwriting of these bonds was possible, without (I would contend) any chance of EU objection.

The ideas all exist. Labour just has to sell them.

And this would be so vastly more useful than the absurd NEST pension scheme that now forces people to waste their savings for their future in the stock exchange for no net gain to society at large but at massive profit to the City.

We still need a pension revolution: I would still argue that this is the way to do it, simply by linking four good ideas (local authority and other bonds to end the curse of PFI, pension reform, localisation and PQE) together.