We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Will this also apply to public sector pensions?

“Labour willing to force pension plans to invest in £50bn ‘growth fund’”, reports the Financial Times.

Labour is prepared to force pension funds to invest in a proposed £50bn “future growth fund”, as the party aims to boost the amount of capital available for fast-growing UK companies.

Rachel Reeves, shadow chancellor, said she did not believe Labour would need to mandate retirement schemes to invest in the new fund because of the goodwill in the sector, but added: “Nothing is off the table.”

Speaking to the Financial Times on a three-day visit to the US, she said she also wanted to accelerate the merger of smaller UK pension funds so as to consolidate a fragmented market.

Reeves, who visited the New York Stock Exchange on Monday, said she wanted to change the culture of Britain’s savings industry, unleashing homegrown funds that could persuade UK companies to list in London.

She also wants pension funds to work alongside the state-owned British Business Bank to improve the UK’s “start up, scale up” landscape, with Labour warning that the country is trying to do “capitalism without capital”.

Reeves said: “A lack of confidence in Britain’s economy has led to too many businesses leaving our shores.”

Confidence in the British economy is not likely to be improved by the woman who will probably be the next Chancellor of the Exchequer announcing that she has so little confidence that pension funds will invest in it voluntarily that she thinking about making them do it by force. It would be unfair to call this the Walter Ulbricht strategy. Unlike Comrade Ulbricht, who said “No one has the intention of erecting a wall!”, Ms Reeves has sportingly given pension funds warning of her intentions so they can get out before the wall goes up.

Investments can go down as well as up. The record of the state in “picking winners” is particularly poor. British workers are not going to be happy bunnies if their pensions lose value because a Labour government forced them to put some of their pot into risky start-ups that venture capitalists wouldn’t touch.

13 comments to Will this also apply to public sector pensions?

  • Investments can go down as well as up. The record of the state in “picking winners” is particularly poor. British workers are not going to be happy bunnies if their pensions lose value because a Labour government forced them to put some of their pot into risky start-ups that venture capitalists wouldn’t touch.

    “Wot ‘effin pension?” says the vast majority of the working class population.

  • Fraser Orr

    to accelerate the merger of smaller UK pension funds so as to consolidate a fragmented market.

    Apparently Ms. “I’m SO pro capitalism” Reeves is concerned that consumers might have too much choice.

  • JP Flathead

    Already are lawsuits in the US …. from the public unions! …. to prevent pensions from going this route.
    https://www.wsj.com/articles/new-york-city-workers-lawsuit-pension-fund-investment-climate-politics-bill-de-blasio-ae9ba435?mod=Searchresults_pos1&page=1

  • Paul Marks.

    Many people I know, indeed everyone I know who has a basic understanding of economics, is horrified by the wild spending record of the present government and by the Credit Bubble financial system.

    But as Dante wrote – even Hell has different lawyers, just when you think things can not possibly get any worse, they do get worse.

    The Labour Party is wrong about everything – it would make a bad situation, a terrible situation, worse.

    The Labour Party started off (way back in 1918 – indeed years before) as a CULT – I use the word after due consideration. The words control of the “means of production, distribution and exchange” (Clause Four of the Labour Party Constitution), the insane aim of controlling every factory, every farm, every shop, was not confined to Mr and Mrs Webb (Lord and Lady P.) – it was written on every Labour Party Membership card till a few years ago, any party member who told you that they did not know of it was either a liar or had never bothered to look at their own membership card.

    And vast numbers of British people voted for it – think about that. They voted that way over decades before Mr Blair got rid of Clause 4. Either they did not bother to know what Clause Four was, or (worse) they supported it.

    And getting rid of Clause 4 (replacing it with waffle) has not changed the mentality – however bad the wild spending and regulating of the Conservative Pasty, Labour will, somehow, manage to make things even more Collectivist.

    “But they are nice people – they really believe that making government even bigger and more controlling will make Britain a better place”.

    Perhaps they do – at this stage it does not matter what their motives are, it only matter what they will do.

  • bobby b

    In the US, defined-benefit pensions are pretty much gone, unless you’re a government employee. Everyone else gets defined-contribution accounts.

    So, if the US decides to go this route, all of us private-world people can laugh as the public employee pension funds fail to keep up with payout.

    But only until the fed gov does what it periodically does, and takes tax money from all of us to re-fund those public employee pensions.

    It never really matters which way you’re pointing, so long as you can still be bent over.

  • David Wallace

    Natalie,
    It can’t apply to UK public sector pension funds, because there aren’t any: conveniently for Ms Reeves, public sector pensions – all defined benefit – are paid entirely as they fall due, from current taxes.
    Investments going down as well as up? Ha! Not a problem for the nomenklatura.

  • DiscoveredJoys

    @ Paul Marks

    My concern is that people who want control of the “means of production, distribution and exchange” will suddenly be encouraged by the thought that using AI may make this practically possible. It won’t matter that AI is unreliable (it cannot know everything in advance) or that oversight will be ‘political’ and driven by factional concerns, but that AI will convince (some) people that ‘this time will be different’.

  • Clovis Sangrail

    @David Wallace There are a lot of funded public sector schemes. All local government pension schemes are funded DB.

  • Jim

    “There are a lot of funded public sector schemes. All local government pension schemes are funded DB.”

    If the LG pension fund is in deficit who has to make up the difference? The employer, who is the local authority. Where do they get the money? From the council tax payers of course.

    You could make a LG pension scheme invest all its money in a cucumbers from moonbeams proposition, and the pensions would still get paid, because the taxpayer would be forced to eat the losses and make it all good. The taxpayer (as a collective) never goes broke, unlike any given private sector employer.

  • Fred the Fourth

    Unbelievsble. Wait, actually, totally believable.

    In startup investing, practically the FIRST thing one learns is that you only invest your gambling money, not your nest egg.

    But there are numerous examples in the recent past of governments doing exactly that. Idiots. Or criminals.

  • druid144

    @ DiscoveredJoys.
    My worry is that AI may not be good at controlling the means of production, but that it will be all too efficient at controlling the means of rebellion!

  • Paul Marks.

    DiscovedJoys.

    Yes – “computers will make Central Planning of the economy and society work” is a piece of evil nonsense that has been pushed since before I was born (and I was born not long after “computer” meant “person who computes”).

    There are indeed pet “philosophers” working for the World Economic Forum (and other Corporate State bodies) making exactly this case – “AI means that we can….”

    Interestingly such pet “philosophers” also tend to be determinists – i.e. they do not believe that intelligence (free will) really exists.

    I think that is how they live with themselves – they justify their work to enslave human beings, by telling themselves that human beings (free will moral agents – persons) do-not-really-exist anyway.

    In “On The Water Margin” (at least the Japanese television version) the Bad Guy, at the end, justifies all his murders, and torturing, and all the rest of it, by maintaining “it is all a dream” – i.e. the persons (free will beings) he abused and murdered, did not really exist.

    If they did not really exist – then he has not done anything wrong.

  • Paul Marks.

    My apologies – it was not “On The Water Margin” – it was just called “The Water Margin” (1973).