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UK business secretary pressures pension funds to invest in Britain
Business secretary Peter Kyle said he could use new legal powers only as a backstop, with mandates not available until 2028.
UK Business Secretary Peter Kyle told UK pension funds to increase investment in British companies, arguing that major asset managers should treat backing the domestic economy as a patriotic duty, the Guardian Economics reported.
Kyle said he was frustrated by the level of investment in British assets after years of government initiatives, adding he was “fed up” with being asked to adjust regulations to boost UK investment when reforms did not lead to more capital flowing into the economy.
Speaking on the sidelines of an event at Lloyds Banking Group headquarters in London, Kyle said mandating investment was not ideal, but he would use it if needed because he is “in a rush,” while also warning against pushing for further regulatory changes that would not produce results.
The report said successive UK governments have sought higher UK pension fund allocations, including a Mansion House accord last year targeting up to £50bn in voluntary releases with at least half earmarked for British assets. It also noted legislation that would allow a backstop power to mandate investment but cannot be used before 2028, with the powers set to disappear if not used by 2032 and by 2035 if they are not.
The Guardian Economics reported that pension providers already allocate funds to UK assets, while the bill faced City lobbying and Tory opposition and was ultimately watered down, leaving ministers with limited timing for any potential mandate.