Bailey warns Reeves over pensions shake-up as Chancellor pushes funds to back British assets
Andrew Bailey yesterday warned it is not 'appropriate' for ministers to dictate where the industry invests savings.
The Chancellor has confirmed she will create a 'backstop' power to force large pension funds to back British assets if they refuse to do so voluntarily.
Reeves wants a larger proportion of savings invested in UK businesses and infrastructure to boost economic growth.
But funds say they have a duty to invest in the best interests of savers and Bailey has now joined a chorus of industry leaders who have warned against such a move.
Charlie Nunn, the chief executive of Lloyds Banking Group, this week compared it to 'capital control' policies in communist China.
And Aviva chief executive Amanda Blanc has said it is like using 'a sledgehammer to crack a nut'.
Bailey said: 'We've had a low level of pension fund investment in the economy and I think structural changes to the industry are helpful.
'However, I do not support mandating, I don't think that's appropriate.' He said reform was needed but stressed the changes should be 'natural'.
It comes after 17 providers, including Aviva and Legal and General, agreed to invest 10 per cent of their funds in private assets – with 5 per cent in the UK – by 2030.
The Government said the move would 'unlock billions for major infrastructure, clean energy and exciting start-ups'.
Tax hikes crush confidence
Business confidence has been crushed by 'sky-high tax' levels and trade war concerns, according to a report.
The ICAEW accountancy body said its business confidence monitor has fallen to its lowest level since late 2022, after the Chancellor's £25billion national insurance hike and amid fears of further tax rises in the autumn.
ICAEW chief executive Alan Vallance said: 'This is another stark reminder of the perilous situation facing businesses.
Unless the Chancellor spares business from additional tax hikes in the Budget, economic prosperity will remain a pipe dream.'
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South Wales Guardian
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It's great to be here, I love standing on the soil of Scotland, Trump says
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