Bailey provokes Chancellor over pension fund plan - but he does have a point, says ALEX BRUMMER

Daily Mail​

2 days ago

Andrew Bailey and Rachel Reeves may be former Bank of England colleagues. But it does not mean they always sing from the same songsheet.
The Governor has been uneasy for some time about Labour assuming powers to mandate pension funds to invest in riskier assets.
The Pension Schemes Bill, introduced in the House of Commons this week, would give ministers 'backstop' capability.
The Government would assume powers requiring trustees to plough up to 10 per cent of funds into infrastructure, private firms, start-ups and equities.
Governor Bailey acknowledges the case for greater retirement fund investment in Britain but does not support compulsion. One doesn't have to be a free marketeer to recognise Bailey has a point.
Reeves has been impressed by the way that the Australian and Canadian pension fund managers invest beyond domestic shares and infrastructure. They also co- invest in UK assets such as Heathrow.
British pension funds are nowhere to be seen at a time when Labour is seeking to speed up and bolster investment in cleaner energy and transport projects.
Taking reserve powers over the pension funds might, however, cut across the fiduciary duty which state trustees must invest safely and cautiously for pensioners and future retirees.
There must also be a fear of what might happen should a less scrupulous government than that led by Keir Starmer were to grab the reins of power.
A leftie or populist administration might seek to take assets into part-public ownership or only back projects favoured by trades unions or financial backers of the governing party.
The Reeves-Bailey pensions dispute is nothing like the bitter, public assault on chairman Jay Powell and the independent Federal Reserve by Donald Trump in the US. He wants rid of Powell and to see borrowing costs slashed.
Reeves too craves lower UK borrowing costs before growth heads over the horizon. One trusts the Chancellor is conscious enough of the sensitivity of Bank independence not to rock the boat.
Drug therapy
Whatever happened to the Government's life sciences strategy? Britain's pharmaceutical giants are caught in a regulatory pincer movement.
On this side of the Atlantic, differences between science minister Patrick Vallance and the Treasury over rebates to the
Government on drug sales is proving a block to better access by the UK's life science pioneers to innovation in the NHS.
In the US, President Trump is threatening a 200 per cent tariff on imported medicines unless the pharma industry gets its act together.
The White House argues that dependence on foreign drug supplies is a national security threat. Both AstraZeneca and GSK have substantial research and manufacturing capacity in America.
But there is genuine concern that, as overseas-based and listed enterprises, they could be targeted.
Despite the status of Britain's big pharma companies as R&D powerhouses, with an opportunity to make an enormous contribution to growth, they are failing to get the attention they should from the Government.
There is a brief reference to a special status for UK pharma in Britain's outline trade deal with the US. But almost all the efforts of negotiators has been on the UK's steel industry and car makers.
It is not surprising that Pascal Soriot, chief executive of AstraZeneca, is reported to have considered shifting Britain's most highly valued enterprise to the US.
Drug firms were initially encouraged by NHS reforms to make greater use of digital tech to test new treatments and roll them out quickly in Britain.
There is acute pain over the failure of the Government to recognise the critical role of the sector in fuelling productivity and growth.
Comeback kid?
New chairman Philip Jansen's work is cut out if he is to reverse the fortunes of UK marketing powerhouse WPP.
Shares in the group plunged 18.8 per cent after the advertising group scythed its revenue and earnings projections.
Maybe WPP creator Martin Sorrell could come to the rescue with a reverse takeover masterminded by his S4 Capital digital and AI-enabled agency.