Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what assessment he has made of the potential for UK pension funds to invest in public infrastructure projects.

Institutional investors, including pension funds, are a promising source of investment in UK infrastructure. Institutional investors are particularly relevant for infrastructure as they are looking for longer term investments to match defined liabilities that are realised when claims are made for pension or insurance purposes.

The government is encouraging greater involvement of institutional investors in UK infrastructure. The Pensions Infrastructure Platform (PIP) was announced in 2011 to help make infrastructure investment more accessible to pension funds. Earlier this year, 7 pension funds agreed to invest £100 million each. In February 2014 the PIP launched its first equity fund with a cap of £500 million, of which £250 million was committed, and has made a number of investments. The government also set up the Insurers’ Infrastructure Investment Forum to give members of the Association of British Insurers (ABI) a direct communication link to government, exploring ways to maximise opportunities for insurance fund managers to invest in UK infrastructure. In December 2013, six insurers – Aviva, Friends Life, Legal & General, Prudential, Scottish Widows and Standard Life – said they will work alongside partners with the aim of delivering £25 billion of investment in UK infrastructure in the next five years.