Reeves hands herself ‘dangerous' powers to control pension pots

Rachel Reeves has granted herself 'dangerous' new powers to direct where millions of savers' pension cash is spent.
The Government's Pensions Bill includes sweeping provisions that will allow the Chancellor to force pension funds to invest in private equity, debt and land in an attempt to boost the UK economy.
Details of the new legislation were published on Thursday.
The Government has insisted that savers' interests will always be put first, with mandating powers only serving as a backstop to ensure investment in British assets.
However, Sir Steve Webb, a former pensions minister, said: 'Legislating to allow governments to tell pension schemes how to invest is a very dangerous precedent.
'Whilst ministers offer assurances that this is just a backstop power that they hope not to use, the precedent has been set. This Government or a future government could use a power of this sort to promote their own political agendas, potentially to the detriment of pension savers.'
Sir Steve, who is now a partner at Lane, Clark and Peacock (LCP), said the law left the door open to sweeping changes that could destabilise the market.
The former Liberal Democrat MP said the powers could be used by a future Reform government to instruct funds to abandon 'woke' investments, including net zero, for example.
Sir Steve said: 'We already have trustees whose job is to make sure that the member interest is protected, based on expert advice over things like investment strategy, and these decisions should be beyond the reach of politicians – of whatever party'.
'Very bad precedent'
A so-called sunset clause in the Bill means the power to mandate investment expires at the end of 2035. However, Sir Steve pointed out that this still left the door open for a new government to instruct pension funds to invest in a whole range of assets.
While a separate clause suggests a review of the powers 'must be conducted before the end of the period of five years beginning with the day on which the regulations come into force', Sir Steve said this would still be well into the next Parliament.
'As long as the sunset clause hasn't set, as it were, it is a power sitting there on day one. So a new government could come in, it doesn't need to consult, it doesn't need to draft legislation, and it doesn't need to spend nine months getting it through parliament. It's there and ready to run,' he said.
The Bill, published on Thursday, hands the Government powers to 'prescribe' investments in 'private equity', 'private debt', 'venture capital' and 'interests in land', which it continues to say are just 'examples' of asset classes.
The Government can also instruct whether those investments 'link an asset to economic activity in the United Kingdom' or even more directly are 'located in the United Kingdom'.
Richard Tice, the deputy leader of Reform, has repeatedly said he will scrap 'net stupid zero' policies if the party forms the next government. Sir Steve said the party could use the Pensions Bill to partly reshape the investment landscape in the UK.
He said: 'The Government has just given themselves powers to tell pension schemes how to invest. And these powers appear to run for at least five years from the passing of the Bill. So Nigel Farage may get to use them, right?
'So just imagine we have a Reform government that's not big on woke. And they say: oh we've got an act of parliament that already allows us to tell pension schemes they can't invest in net zero.
'The Government giving itself power to tell schemes how to invest, is just a very, very bad precedent.'

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

The Independent

23 minutes ago

• The Independent

Ministers ‘abusing' anti-terror laws against Palestine activists

Former Scottish first minister Humza Yousaf has said the Government is 'abusing' anti-terror laws against pro- Palestine activists as tens of thousands of protesters marched in London. A protest organised by groups under the Palestine Coalition banner marched to Whitehall from Russell Square in central London on Saturday afternoon. Organisers estimated that 350,000 people attended the protest, with those marching waving Palestinian flags and chanting 'free, free Palestine' and 'stop bombing Iran'. Many protesters chanted 'shame on you' as they walked past dozens of counter-protesters, organised by pro-Israeli group Stop The Hate, near Waterloo Bridge. The Metropolitan Police said a person was arrested after a bottle was thrown towards the counter-protesters. They added that 'a group appeared on Waterloo Bridge trying to block traffic' following the protest, with officers intervening to clear the road. The demonstrations come after reports on Friday that the Home Secretary will ban Palestine Action after the group vandalised two aircraft at RAF Brize Norton. Yvette Cooper has decided to proscribe the group, making it a criminal offence to belong to or support Palestine Action, after footage posted online showed two people inside the RAF base, with one appearing to spray paint into an aircraft's jet engine. Addressing crowds at the national march for Palestine in Whitehall, former SNP leader Mr Yousaf said: 'While we stand a stone's throw from Downing Street, let's make it clear to the Prime Minister: You try to intimidate us with your anti-terror laws by abusing them, but you'll never silence us as we speak out against the genocide that you're supporting. 'We're not the terrorists – the ones that are literally killing children, they are the terrorists.' A pro-Palestine protester said it was 'absolutely horrendous' that the Government is preparing to ban Palestine Action. Artist Hannah Woodhouse, 61, told the PA news agency: 'The Government, since yesterday, have said they're also going to start to try to proscribe peace activists who are trying to take action against the genocide – so Palestine Action are now being targeted by our Government, which is absolutely horrendous.' Ms Woodhouse, who is from London, added: 'Counter-terrorism measures, it seems, are being used against non-violent peace protesters. 'The peace activists are trying to do the Government's job, which is to disarm Israel. The duty of any government right now is to disarm a genocidal state.' Musician Paloma Faith told pro-Palestine campaigners that she would not 'stick to music and stay away from politics'. Speaking to crowds at the march, the songwriter, 43, added: 'Those who facilitate these crimes against humanity need to be made accountable, not those of us who are compassionate and humane enough to stand against it.' Former Labour leader Jeremy Corbyn told protesters that politicians were seeking to 'turn people who protest against the invasion of Iran or the occupation of Palestine into terrorists'. Some protesters were carrying Iran flags, with others hoisting signs – distributed by the Islamic Human Rights Commission – that read 'choose the right side of history' alongside a photo of Iranian Supreme Leader Ayatollah Ali Khamenei. Human rights group Liberty said banning Palestine Action 'would be a huge step change in how counter-terror laws are applied'. Sam Grant, its external affairs director, said in a statement: 'Targeting a protest group with terrorism powers in this way is a shocking escalation of the Government's crackdown on protest and we urge the Home Secretary to rethink. 'It's clear the actions of Palestine Action don't meet the Government's own proportionality test to be proscribed as a terrorist group, but the consequences for the group's supporters if ministers go ahead would be heavy – with things like wearing their logo carrying prison sentences. 'This move needs to be viewed in light of the sustained crackdowns on protest we have seen from successive governments over recent years, and the worrying fact that there are more and more non-violent protesters spending years in prison.' The Palestine Coalition is comprised of a number of different groups, including the Palestine Solidarity Campaign and Stop The War.

Telegraph

an hour ago

• Telegraph

Labour must put energy security ahead of net zero ideology

British Government ministers appear to enjoy nothing quite so much as interfering with complex systems they don't entirely understand. Research commissioned by the Department for Energy Security and Net Zero has highlighted one set of clearly unintended consequences that could soon come about as a result of Energy Secretary Ed Miliband's fanatical pursuit of his 2050 target. Interactions between high temperatures, solar panels, heat pumps and the transmission network may result in a greater likelihood of 'electricity shortfalls and loadshedding', a polite euphemism for controlled blackouts. The driving mechanisms are straightforward: heat pumps, soon to be mandatory in newbuilds, and highly incentivised in older properties, offer cooling capabilities that are likely to increase electricity demand during hot periods. At the same time, Britain's distributed renewables grid will be more exposed to degradation of performance due to these same high temperatures as solar panel efficiency falls and transmission networks are pushed to their limit as carrying capacities fall, increasing 'the likelihood of widespread blackouts'. It is a fascinating combination of incentives and outcomes, particularly for a department with 'energy security' in its title. It is also an excellent illustration of why we should be deeply sceptical of government schemes that seek to remake society on a grand scale: the choices to push certain approaches has created this pathway to instability. It is far from the only way in which net zero puts energy security at risk. There are the dark, windless winter days where neither solar nor wind provide significant inputs into Britain's grid, potentially leaving us reliant on backup power sources – an additional source of capital costs – or on interconnectors to European countries, which may also find their generating capacity limited. At the other end of the spectrum, a report into Spain's April blackouts has highlighted that particularly sunny days may drive prices negative, causing producers to switch off in a cascading failure. Britain does at least seem to have learnt this lesson ahead of time, taking steps to prevent a similar incident here. As the UK report has highlighted, however, it would be foolish to assume perfect foresight of future risks. It is surely time the Government put energy security ahead of net zero ideology.

The Sun

an hour ago

• The Sun

Parliament serves food off German-made plates – sparking huge patriotism row and calls for Palace to 'buy British'

THE UK Parliament is serving food off German plates - sparking a huge patriotism row. Furious MPs slammed the "outrageous" practice and called on the Palace of Westminster to put country first and 'buy British". The members dining room in the House of Commons is used by MPs and is one of the grandest restaurants in the building. Its elaborate menu boasts that "wherever possible we use British produce'. But it serves its grub on plain white plates and saucers which are made by Villeroy and Boch - a German firm founded in 1748. Gareth Snell, Labour MP for Stoke-on-Trent Central - known as 'The Potteries because of its proud ceramics industry - slammed the practice. He told The Sun on Sunday: "Britain has the best ceramics in the world - but our own parliament is serving food off German plates. 'This is outrageous and it is unpatriotic. 'Parliament should support businesses in areas like mine and buy British crockery.' 2 Britain's once booming potteries industry has been hammered by sky high energy costs. Many firms have shed jobs and some have closed. Mr Snell is launching a Buy British potteries campaign - and is urging the parliamentary authorities to lead by example and only use UK-made plates. Robert Flello, CEO of Ceramics UK, said: 'Why is the UK House of Commons using German cups and saucers and plates in the dining room used by MPs? 'It is outrageous. They need to be told to buy British. There is no excuse. 'Our potteries produce the best quality crockery. 'Buying British goods is a matter of national pride and will also help an industry struggling because our energy costs are going through the roof. 'If you go to any other country - France or Italy say - I bet their state institutions are using crockery made in their own country.' Parliament has lots of different restaurants and cafes serving food off a wide range of crockery bought from suppliers from around the world. While it uses some crockery made in the UK, it does not have a policy to only buy British. A House of Commons spokesman said:'We source a wide range of crockery from firms within the UK, as well as from those based elsewhere. All purchasing is in line with relevant legislation for public bodies, which prioritises value for money."