Former pensions minister points out flaws in new UK investment strategy
Labourʼs new pension investment plan faces real-world obstacles despite good intentions. Ex-minister **Guy Opperman** explains why forcing pension funds into UK markets might not work as planned
The recent budget speech showed strange logic: talking bout growth 300+ times while making it harder for businesses to grow. Rachel Reeves tried to fix this with her new pension-fund plan but theres a big problem - nobody likes being told what to do with their money
The plan builds on earlier work (including mine as pensions minister) and the mansion house deal from last summer that wanted 5% of pension money in UK stocks by 2030. Now Reeves wants more; shes pushing local pension funds to join together like they do in Canada and Australia: this could save money but its not that simple
- Water companies lost pension investors lots of money
- Nuclear power needs government-backed bonds
- Transport projects face too many legal fights
- Housing costs are way too high
The government needs to make these investments look good to pension funds; right now its the opposite. Take water companies - pension funds wont touch them for years (the Universities pension fund really wishes it hadnt invested in Thames Water) Even worse weʼve got two different groups trying to control one industry which doesnt make sense
Infrastructure projects are super-hard to profit from; just look at Steve Reeds approach to water companies - its scaring away the exact investors we need. The whole thing needs a re-think: one regulator not two would be a start but theres lots more to fix before this plan can work
