Or rather, one of Ritchie\’s schemes meets reality I should say.
For some years now (under the banner \”Finance For The Future\”, another one of his little limited companies) he\’s been banging on that pensions should be invested in infrastructure.
So, lo and behold, local authority pension funds can now invest more in infrastructure:
Eric Pickles, the Communities Secretary, will unveil proposals today to let councils invest a third of their pension funds on infrastructure projects.
It follows criticism from Lord Heseltine that the Treasury is not making enough use of pension funds to help the construction industry and create jobs.
Hurrah! The Murph wins! Ain\’t that great?
Hmm, what\’s that?
But unions have warned against investing members’ pension savings into “dodgy projects” that can offer poor returns. Several of the private finance initiatives cost tens of millions of pounds more than expected.
Eh, the unions are against it?
More than 80 pension funds operate in England and they are allowed to invest up to 15 per cent of their funds in infrastructure
You mean they\’re already allowed to do it?
although the percentage actually invested is much lower.
But they don\’t do it? Why?
However, pension experts said that only £600 million to £1 billion from the private sector had been identified following concern by pension trustees that the projects were too risky. The early phases of construction often exceed estimates and the timetable usually falls behind, adding to the cost.
You mean that they\’re not safe investments then, not suitable for pension fund investment?
So what the hell has Ritchie been banging on about for all these years then?
LA pension funds can already invest as he urges they must be allowed to but they don\’t because it\’s a great way to lose money. So how does that make, as Ritchie insists it does, infrastructure investment by pension funds a good safe way to earn money?