Is the government adopting my pension proposals?
No, they\’re really not.
There is a remarkable similarity between what I wrote on pension investment there (and in the Green New Deal) and in what is being proposed.
No, actually there isn\’t.
There\’s a good reason for this too: Vince Cable\’s SpAd is an economist whose view of you is almost as sulphurous as mine is.
So here\’s the difference between the two proposals.
The Murphmeister proposal was that pension funds should, at risk of losing their tax breaks, be forced into investing in infrastructure projects or \”new business\”.
The problem with this proposal was as I pointed out at the time. There\’s no mechanism by which pension funds can make a profit, a return, out of said infrastructure investments. Nor from the social gains (like lower CO2 emissions) touted in the Green New Deal.
As I then went on to point out, what is needed is a structuring of a method by which investors (not just pension funds by any means) could in fact profit from making these possibly desirable investments. Once you have done that, say, by allowing those who build a road to charge a toll on it, then you\’ll find that investors (not just pension funds by any means, MacQuarie Bank has been big in this for years) will be happy to invest in these possibly desirable investments.
So, what has Vince and his SpAd thought up?
No, they haven\’t gone the Murphmeister route to forcing pension funds to invest in loss makers at risk of losing their tax breaks. They\’ve instead suggested changing the rules so that those who invest in such projects can charge for the output of such projects through, say, charging a toll on a road they\’ve built, thus making investors happy to invest in such possibly desirable projects.
I could go on and point out that Vince\’s SpAd does read this blog: in fact I know absolutely that he read my critique of the Murphmeister pension investment proposals. And agreed with it. It would be possible to thus claim that the current proposals are actually the Worstall proposals rather than the Murphy ones: but that would be far too much personal aggrandisement for me. For the reason that the problem with the Murphy proposals was blindingly obvious, obvious to even a politician, similarly, the Worstall proposals were blindingly obvious, even to a politician.
For if you want people to invest in something you\’ve got to give them a way to make money out of that investment. Exactly what Cable\’s proposals do. You know, carrot rather than stick.