Labour MPs have raised concerns about the potential cost of the Government’s plan to get UK pension funds investing in infrastructure projects.
In his autumn statement, Chancellor George Osborne said an agreement with two pensions funds is set to unlock £20bn of private investment for public infrastructure projects.
Speaking after the statement, public accounts committee chair and Labour MP Margaret Hodge said the proposal sounds similar to private finance initiatives, a funding model slammed in a report by her committee which scrutinises Government spending. She said: “Pension funds will only invest in public projects if it is a good deal for them. As with PFI, any sweetener the Chancellor offers to the private sector will be at the expense of the taxpayer.”
Osborne said: “What we are seeking to do is get the pension funds together in a private sector vehicle where they can cooperate and invest in British infrastructure.”
Labour Shadow pensions minister Gregg McClymont says: “The Government is trying to portray this as a done deal but pension funds want certainty before they will invest.”