The Financial industry is lobbying Pension funds for more control. In a call for the UK fiscal rule relaxation to take more control over the way pensions are managed.
Investors which manage £1.7tn of assets have urged UK chancellor Rachel Reeves to revamp Britain’s fiscal rules to unlock billions of pounds of more funding for infrastructure projects.
The current definition means government is ‘actively discouraged’ from spending on infrastructure.
The group of pension investors called on Reeves to redefine the key debt measure in her Budget rules. In essence this will allow funds to allocate to a lot more projects within the UK which come under the category of an infrastructure projects.
Financial industry is lobbying Pension funds
They said the UK’s “public sector net debt” measure should be changed to recognise the financial value of assets created by government spending on infrastructure and green energy projects.
The move would give an incentive to the government to spend more on infrastructure, and potentially unlock billions in extra future spending from pension groups, which prefer investing alongside states to reduce their risk.
“The UK state is actively discouraged by its own debt rules from co-investing with pension funds . . . in infrastructure projects,” said Gregg McClymont, executive director at IFM, whose UK investments include Manchester Airport Group and Anglian Water.
The UK’s current public sector net debt measure does not account for the value of assets the government invests in.
The implications are that this will bolster the balance sheet and allow them to diversify their portfolio towards projects which pay more in the long term.