WORKERS CAPITAL
Campaigners fear Welsh pension fund billions will be controlled from England
Martin Shipton
Campaigners have raised concerns about plans announced by Chancellor Rachel Reeves that could see billions of pounds worth of Welsh pension fund money controlled from England.
Hywel Davies of the organisation Divest Cymru told Nation.Cymru: “I belong to a group that has long campaigned against local government pension funds’ investment in fossil fuels. The group has had some success in lobbying funds to divest from oil and gas, though always in the teeth of opposition from fund managers.
“We have had dialogue with pension trustees, the Wales Pension Partnership [which manages pension investments on behalf of thousands of public sector workers] and elected councillors across Wales. We have questioned the failure of pension funds to follow the mandate set for them by elected councillors and Senedd members.
Rachel Reeves
He added: “Recently we have had a speech from Rachel Reeves at the Mansion House that makes it clear that big changes will be happening to local government pension funds. By 2030 she intends to create eight mega funds. These will have assets of £50bn each on average. No details of the geographical areas covered by these mega funds nor their governance have been discussed, but the proposals have been put out for consultation. Discussion of the issue in the press has been very low key.
“The total amount of Welsh Pension Partnership assets, pooled and non pooled, is £22.5bn, so Wales has less than half the necessary funding. It seems clear therefore that unless some special dispensation is made for our nation status, perhaps alongside funds for Scotland and Northern Ireland, we are at risk of being amalgamated into a combined region.
“I would suggest that now is the time to draw attention to the political and financial consequences for Wales if it does not retain a say over its own pension assets. The benefits to sustainable investment projects could be significant – in the order of £1,5bin at 5% of the total sum.
“We have not been told whether there would be a role for the Senedd in overseeing any Welsh pension, or whether all decisions will be handed to fund managers and the UK Treasury. Will we have the space to assert our own, distinct democratic priorities?
“Could we for example decide that our pensions will no longer be used to invest in oil or gas? I would argue that this issue is a significant test of this government`s respect for the devolution settlement and our ability to manage our own affairs. It is part of a narrative that includes HS2, Levelling Up, the Crown Estate. the Barnett formula etc.
“When asked about it in the Senedd Mark Drakeford`s reply suggested that he was very relaxed about this not being a devolved matter.”
Sensitive
In October Fiance Minister Mark Drakeford told the Senedd in response to comments made by Plaid Cymru MS Heledd Fychan: “To advance the cause of Wales, it is not enough simply to think that a soapbox and a megaphone will always be the right answer. You have to be sensitive to the context you’re in and advance the case where it has the greatest sense of success.
“Nor do I share a nationalist approach to pension funds. I want pension funds to work for the people who contribute to them, and that means there is a very direct interest for Welsh people whose money is in those pension funds to see that money being used for long-term investment here in Wales.
“Does that mean that I wouldn’t be willing for money invested in an English pension fund to be spent here in Wales? Of course it doesn’t. I want that money to be used to the best possible use and if that means that we will co-operate with pension funds on the other side of the border, because it is to Wales’ advantage to do so, then I’ve no difficulty with that at all.”
‘Not devolved’
A Welsh Government spokesperson said: “Workplace pensions are not devolved. Local government pensions authorities in Wales have worked hard to create the Wales pension partnership and the UK Government’s consultation will offer the opportunity for local government pensions authorities to give their views.”
The spokesperson pointed out that the UK Government consultation proposes changes to the existing local government pension scheme asset pools by mandating certain minimum standards deemed necessary for an optimal and consistent model in line with international best practice. This does not require the combination of these existing pools into larger ones.
It also suggests boosting local government pension scheme investment in their localities and regions in the UK as well as strengthening the governance of both local government pension scheme administering authorities and local government pension scheme pools.
No comments:
Post a Comment