The UK has £6tn of investment capital, why is it unable to allocate it effectively? The investment systems think-tank, New Capital Consensus (NCC), invited me to an invite-only panel discussion titled “how to revive investment flows – what happens next.”
Taking place at Chatham House, a panel of parliamentarians examined the future of the UK investment system in light of the newly carried Pension Schemes Act – asking what else the Government can do to revive investment flows and stimulate sustainable growth in the UK.
The panel featured four leading voices on financial services from the House of Commons; former City Minister and current Treasury Committee member the Rt Hon John Glen MP, Treasury Committee member John Grady MP, SNP Work and Pensions spokesperson Kirsty Blackman MP, and Lib Dem Business spokesperson Sarah Olney MP. The event was chaired by the economist and former treasury minister Kitty Ussher.
There was consensus between these politicians behind the idea of productive growth though the better investment of pensions money but there was little conversation about how this would be achieved. There was an assumption that Torsten Bell’s Pension Scheme Act would take pensions towards effective investment but there was no one in the room (except me) asking how.
An academic idea is great but it must be picked up by employers, unions and most of all the savers whose money it is hoped with be invested more effectively.
No obvious consensus (yet)
It does not seem obvious to me, that people are as one on this. Nest recently run a survey of its users who confirmed they were for effective investment. Meanwhile Jo Cumbo found one member of staff at her employer that quite the opposite was the case.
Jo is not the voice of one, she speaks to many people and many are unclear about what they should be investing in. I bumped into her in the street after her recent sessions with her staff.
We compared notes. I do not think that there is a new “capital consensus” about the pension funds that people are a part of, or pots that people actually own.
People are genuinely confused about what their responsibilities are. This was obvious in the Chatham House event (which surprisingly wasn’t under the Chatham House rule).
There were a number of ideas bounced between the panel and a small but academic audience. It was agreed that our £6tr should be doing more for Britain but I found no one in the room who knew very much about how.
John Glen and the right wing wanted to get people like those Jo Cumbo was speaking to, to engage and elect to have their money invested in their personal pots. Others spoke vaguely about funded DB schemes. Nobody spoke much about what the Pension Schemes Act was doing and frankly I was not surprised. It is confusing for a range of workplace and personal pensions to be talked about.
I was brought in , I suppose , as contrarian to the general view that the ordinary pension saver is an investor. I am with Jo Cumbo that the ordinary person knows very little about the intricacies of pensions and has yet to be convinced that Government interference in the amount they retire on, is anything but taxation by the back door.
There is not a New Capital Consensus at all. While I believe and talk most ardently of the advantages of patient capital investing in our country to make Britain a good place to retire in, I don’t see myself as one with most people I speak to who aren’t in pensions. They are confused and have no access to the debate that was going on in Chatham House yesterday lunchtime or the conversations that FT staff are able to have with their GPP provider offering them a workplace pension.
Ashok Gupta has written down the argument for New Capital Consensus. You can read the report from this link.
Ashok Gupta – here is your challenge
