{"id":26760,"date":"2014-11-20T09:03:09","date_gmt":"2014-11-20T09:03:09","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=26760"},"modified":"2014-11-20T09:41:37","modified_gmt":"2014-11-20T09:41:37","slug":"make-pension-funds-work-for-the-uk","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2014\/11\/20\/make-pension-funds-work-for-the-uk\/","title":{"rendered":"Make pension funds work for the UK"},"content":{"rendered":"

The FT ran a story a day or so ago with the headline<\/a>:<\/p>\n

PM accused of overlooking potential UK pension fund investment<\/p><\/blockquote>\n

To give a taste it began:<\/p>\n

\n

David Cameron is overlooking billions of potential investment held by British savers while asking foreign governments to put money into UK infrastructure , according to a major pension fund.<\/p>\n

Sir Merrick Cockell, London Pensions Fund Authority deputy chairman, has urged the prime minister to help local government schemes spend money on major building projects.<\/p>\n<\/blockquote>\n

Why's this important? Because, as the article notes, despite the chronic need for for \u00a0infrastructure investment in the UK \u00a0and the fact that \u00a0local authority pension funds have \u00a3178bn of funds under management they have invested just \u00a3330 million into \u00a0UK infrastructure projects, and all of this into second-hand PFI schemes, \u00a0which in effect means that they have not created a single new asset or job as a consequence.<\/p>\n

This is absurd, and I am pleased Sir Merrick Cockell\u00a0thinks so. Perhaps he should read the pamphlet I co-authored for NEF more than a decade ago now, called 'People's Pensions<\/a>', or the more recent 'Making Pensions Work<\/a>' in which I said (referring to the plan for auto-enrolment pensions, \u00a0but with the observation much more widely applicable):<\/span><\/p>\n

Lastly we recommend that if enforced saving is to be required by the government then that\u00a0government has a duty to ensure that the funds so saved are invested for the common good.\u00a0Pension fund performance over the last decade has a been a history of almost perpetual loss making\u00a0despite the enormous subsidies that pension fund tax relief has provided to the City of London and\u00a0stock markets, all of which they have frittered away. Investment in local authority bonds for local\u00a0regeneration, or in bonds or shares issued by a new Green Investment Bank and in hypothecated\u00a0bonds e.g. to provide alternative funding to replace the inefficiently expensive Private Finance\u00a0Initiative for funding public sector infrastructure projects would have prevented those losses \u2014\u00a0because all of these would have paid positive returns to pension fund investors. It is for exactly this\u00a0reason that we recommend that such assets be the basis for any new state pension fund in the\u00a0future.<\/p><\/blockquote>\n

I stand by that observation and believe that pension funds could unlock massive potential in the UK economy.\u00a0Instead George Osborne wants them to be frittered away.\u00a0Isn't it obvious which is the wiser choice?<\/p>\n

-------<\/p>\n

Please note that I am still not back to normal for work purposes as I am recovering from an operation to have my gall bladder removed. I am blogging occasionally but comment moderation may take a while. I'm definitely recovering and hope to be back to normal within a week or so.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The FT ran a story a day or so ago with the headline: PM accused of overlooking potential UK pension fund investment To give a
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35,29,1],"tags":[],"class_list":["post-26760","post","type-post","status-publish","format-standard","hentry","category-economics","category-pensions","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/26760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=26760"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/26760\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=26760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=26760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=26760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}