TENS OF BILLIONS of pounds in workers’ savings could be invested in infrastructure projects under new proposals announced yesterday by communities minister Eric Pickles.
Businesses and the pensions industry welcomed the move, arguing that freeing up the funds’ investment opportunities should boost the economy in the long run.
Current rules limit the amount the local government pension funds can invest in infrastructure projects to 15 per cent of their £150bn in assets.
The new proposal would see the ceiling lifted to 30 per cent.
“Unlocking Town Hall pension pots so they can be used to invest in vital infrastructure projects is a common sense decision that will help this country complete on a global scale and get Britain building,” said Pickles.
“By lifting the restrictions controlling local pension investments councils could pump a further £22bn directly into job creating infrastructure projects that will boost our economy.”
The Confederation of British Industry welcomed the plans.
“Infrastructure projects should be a natural fit for these funds, which have very long time-horizons and are looking for a healthy investment return,” said director Rhian Kelly.
“But we cannot afford to rest on our laurels. More must be done to ensure we deliver a pipeline of investable projects and ensure projects of national economic significance are given support.”