There is scope for greater investment in infrastructure from careful, long-term investors such as large pension schemes, according to a recent report from the Labour Party.

The report, A New Britain: Renewing Our Democracy and Rebuilding our Economy, stated that the UK Infrastructure Bank, a government-owned company set up in June 2021 with £12bn initial funding, needs to maximise the resources available for investment, suggesting that pension investment may be one way to do.

In addition to this, the report suggested that investment in infrastructure could be attractive to large pensions and insurance companies, as they need stable, long-term assets to support pensions in payment.

The report also argued that the regulatory framework that governs the investments should not discourage it, and government and local leaders should work with the industry to devise the best mechanisms to attract private capital into these long-term projects.

Similarly, the commission argued that the capacity of regional and local bodies to engage with the capital markets, through issuing bonds or in other ways, needs to be developed to attract investment successfully into their area and work effectively with private partners.

Pension investment was not the only suggestion the paper made of the bank’s need to maximise the resources available for investment as it also recommended furthering joint ventures with the European Investment Bank.

It detailed that, while the UK is no longer a member of the EU, there are still European Investment Bank (EIB) projects in the process of completion and there is in its view scope for further cooperation.

Commenting on Labour's report, People's Partnership director of policy, Philip Brown, stated: “Whoever is in power, how pension schemes and insurers invest is going to remain of interest to policymakers.

"Both Labour and the Conservatives are focusing on the role pension schemes and insurers could play in financing UK infrastructure.

"With the regulatory issues for pension schemes nearly resolved, the focus should be on developing projects that work both for pension schemes and the UK state.”

Share Story: