Last week, the Chancellor, Rachel Reeves, confirmed that she will legislate to create a backstop power to mandate large pension funds to back British assets by instructing investment in domestic infrastructure, clean energy and fast-growing businesses.
Commenting, Richard Fuller MP said:
I warned about this during the general election and I repeated my concerns just a couple of weeks ago, that this Labour Government are coming after your pensions by mandating that large pension funds, at least in part, will be forced to invest in UK assets.
You may say 'so what?', surely it's a good thing to invest in British businesses, but the implications of this move could be disastrous for your pension pots and is a massive overreach by the government.
Pension funds' number one objective has to be to maximise the return on monies invested in order to provide the best possible income in retirement. Those investment decisions should be made solely on the basis of which assets will deliver the best returns. This government has repeatedly shown itself to be captured by ideology over pragmatism, and it is deeply concerning that pension funds may be conscripted into pet projects such as Great British Energy, which will most likely under-perform compared to other investment opportunities and therefore reduce the final value of pensions that people receive.
Let's be clear that it is entirely wrong for ANY government to seize this kind of control over pension fund investments. Furthermore, having consistently shown an astonishing lack of commercial acumen in almost every decision they've taken, this Labour cabinet would probably be the least trusted group of individuals I would ever consider capable of making such choices.
You can see Richard's previous thoughts on this issue here:
