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Categories:Pensions,Politics

Treasury plans £10bn council pension raid

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Chancellor George Osborne is planning to raid local authority pension funds to help finance UK infrastructure projects, according to The Times.

In his autumn statement, Osborne (pictured) said the Government planned to spend an additional £30bn on infrastructure in the next 10 years, with £20bn expected to be raised from private sector pension funds. The remaining £10bn will come from extra Government spending.

However, The Times says Treasury sources now say at least £10bn of the the £20bn will come from local government pensions.

In November, the National Association of Pension Funds and the Pension Protection Fund signed a memorandum of understanding with the Government to help pension funds invest more in infrastructure.

ABI director general Otto Thoreson wants the Government to create a new class of infrastructure bonds to facilitate investment from insurers and pension funds.

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Readers' comments (20)

  • So, on the basis that as much as 25% of the council tax we have to pay are gobbled up on pensions, our bills on this front will be going up still further. Great.

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  • Now for the Tsunami! Does the Chancellor know what he is doing?Gordon Brown(god bless his soul,if he has one) is a great example of how 'not' to do such crazy things.When will these people learn?These are the so called 'leaders' ,and crackpot ideas are their only way of thinking as most of them have never had a proper job or had to live in the real world.

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  • As said above do these men never learn? This a ridiculous idea, is Osborne so bereft of ideas?

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  • Politicians never learn. They don't want to waste time thinking about the unintended consequences as GB shows...

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  • At first I thought that this could be a potential disaster in the making then after some thought I realised that it could actually be far worse.

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  • "ABI director general Otto Thoreson wants the Government to create a new class of infrastructure bonds to facilitate investment from insurers and pension funds".

    Two key words might just be "bonds" & "investment" which may indicate that the "raid" that's being contemplated is not quite the same thing as Gordon's straightforward snaffling.

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  • Devoid of ideas and a back bone, Osbourne ( I believe the mexciana spanish translation is chihuahua), is simply following orders from institutions who at this time and for some time to come should be keeping their collective heads down. I'll go for an increase in council tax of 25% as long as the personal allowance is raised to £12,000 and the tax rate upto £50k is 10% and 20% thereafter and corporation tax is reduced to 5%, local business rates are halfed nation wide. Then VAT is dropped to 6%, fuel duty reduced by 56% and employers no longer contribute national insurance payments for their employees. This might mean cancelling our neverending engagement in Afghanistan, or all our other pomp and prestige moments around the globe, but I think its a fair trade off!

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  • What might be called' the madness of (king) George!!

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  • 'you cannot be serious'
    'i cannot believe it'
    'Just like that'
    All well know sayings that can be used to describe the latest bit of lunacy from our Leaders!
    A prize for the original source of each?

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  • Most of these responses appear irrational, perhaps inflamed by the 'raid' headline.

    My reading of the press coverage is that the Government is encouraging pension funds to invest existing assets in infrastructure projects. At most this is a direction for investment not a 'raid', and no reason why tax would rise as a consequence, unless there is something I've missed?

    Business Secretary Vince Cable says that the government "would offer long-term investors assurances and clarity about a "steady return" on their money" - what's wrong with that?

    Pension fund trustees and administrators have a legal duty to invest their assets responsibly, so any infrastructure offering will have to meet normal criteria for investment, won't it?

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