Our UK pensions should Invest in people, not wars – Neil Duncan-Jordan MP
By Neil Duncan-Jordan MP
It’s important that our movement sees pensions as a force for social good. On Wednesday, MPs will consider the Pension Schemes Bill. I’ve tabled a series of amendments as part of my campaign for Progressive Pensions.
Directing pension funds toward social good is one way our Labour Government can start to rewire the economy so it works for ordinary people. These funds are the deferred wages of millions of workers. That money should be invested in areas such as green technology and social housing — stable, reliable sectors that also help build a better future for the very people who fund them.
Whether this is done through an expanded National Wealth Fund that could direct investment into socially useful projects or some other mechanism – it would clearly boost economic growth. This would be a tremendous step forward not only ensuring solid investments – but providing desperately needed decent homes at affordable rents.
Too often pension funds don’t reflect the sort of world workers actually want to see. The overwhelming majority of people would be appalled to discover their savings are invested in illegal wars — including the genocide in Gaza. Local Government Pension Scheme funds currently hold over £12 billion in companies complicit in Israel’s actions. My proposals would ensure pension funds are not entangled in war crimes or human rights abuses in Gaza or anywhere else.
The local Government Pension Scheme also invests over £16 billion in fossil fuels and 85% of all pension schemes have no credible climate action plan. Clearly the voluntary approach to fossil-fuel divestment has failed. Workers’ wages should not be used to accelerate a climate crisis that hits the global working class hardest. Fundamentally, there is no retirement without a liveable environment.
The call for progressive pensions sits comfortably in the traditions of collective action that underpin the labour movement. A single worker can’t win a better deal from their boss alone – solidarity is what builds power. Individuals – a binman, street sweeper or social worker can’t match the political influence that come with the deep pockets of the wealthiest corporations or billionaires. But when their savings are pooled into pension funds, the toil and sweat of workers can become one of the most powerful forces in the country. These funds should reflect the values and material needs of the workers who sustain them — and to make that possible, pension scheme members need far greater say and control over how their money is used.
That’s why we must guarantee a real voice for trade unions on all future pension boards. Right now, there is no requirement for worker representation on the boards of Local Government Pension Scheme pools. With the government planning to consolidate these into just six pools, this is the ideal moment to enshrine proper worker representation in law. Workers deserve a seat at the table – the government should back this change.
The Pension Schemes Bill provides an almost once in a lifetime opportunity to help the environment and society. The £3 trillion in UK pension funds could be used to address the historic transfer of wealth away from ordinary working people towards the wealthiest individuals and corporations in our society. Since pensions account for 40% of household wealth any serious attempt at reform must reflect how this vast sum – rooted in workers’ contributions over a lifetime, could be put to work improving their lives. The call to use our money and make pensions more progressive is therefore overwhelming.
- Neil Duncan-Jordan is the Labour MP for Poole. You can follow him on Twitter/X, Facebook and Instagram.
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