Pension Investments

Baroness Altmann Excerpts

Tuesday 23rd January 2024 Lords Chamber

Asked by

[Baroness Altmann]

To ask His Majesty’s Government whether they plan to encourage UK pension investors to increase support for (1) long-term UK growth, and (2) UK financial markets.

[The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)]

My Lords, the Government are delivering a series of measures to reform pension fund investment, strengthen the UK’s competitive position as a leading financial centre and support long-term UK growth, building on the Chancellor’s Mansion House package of reforms. These measures include an industry-led compact whereby 11 of our largest defined contribution schemes have committed to the objective of allocating at least 5% of their default funds to unlisted equities by 2030.

[Baroness Altmann (Con)]

I thank my noble friend for her Answer. However, the Mansion House reforms focus only on unlisted companies and do not require the investing of a penny in the UK itself. Will my noble friend agree to meet with me and like-minded peers, who are concerned that there are ready-made portfolios in UK-listed investment companies, trusts and REITs that are already investing in wind farms, solar farms, sustainable energy projects and other infrastructure that could be used for pension investments to support UK growth and revive confidence in UK markets? Does she agree that the current problems with charges disclosure have driven pension funds to invest in overseas infrastructure rather than our own and we urgently need to address that, either through a statutory instrument or my Private Member’s Bill?

[Baroness Vere of Norbiton (Con)]

I should be delighted to meet with my noble friend to discuss these matters further. The UK has a world-leading investment trust sector representing over £250 billion of assets and is highly aligned with the Government’s priority to promote long-term productive investment. She will know that at the Autumn Statement, the Government published draft legislation to replace the packaged retail and insurance-based investment products, or PRIIPs, regulations. We also announced that we will bring forward the repeal of the relevant provisions of the Markets in Financial Instruments Directive. This will enable the FCA to put in place more proportionate cost disclosures.