Labour to ensure pension funds invest more in UK firms

Financial services are one of Britain's greatest success stories, according to Labour's election manifesto, published on Thursday

Britain's Labour Party, tipped in the polls to win a general election on July 4, said on Thursday that if it won power it would ensure that pension funds invested more in UK firms.

Cash-strapped Britain has little choice but to rely on private funds to pay for renewing infrastructure and cutting carbon emissions.

The party has long sought to reassure the City there would be a continuation of the post-Brexit financial reforms set out by the current Conservative government to boost the sector's global competitiveness.

Financial services are one of Britain's greatest success stories, according to Labour's election manifesto, published on Thursday.

It said that Labour would support innovation and growth in the sector, through, ensuring a pro-innovation regulatory framework.

A Labour government would set up a National Wealth Fund capitalised with £7.3 billion ($9.32 billion) over the course of the next parliament by targeting three pounds of private investment to every one pound of public investment.

Nicholas Lyons, chair of insurer Phoenix told Reuters in a recent interview that the national wealth fund idea was positive, showing that Labour was "interested in doing something very long term".

The current government backed the "Mansion House Compact", led by Lyons when he was Mayor of the City of London, whereby pension providers like Aviva, Legal & General and Phoenix voluntarily committed to investing 5% of their assets in British growth firms by 2030, as London faces competition from New York and EU financial centres for listings.

Labour stopped short of saying it would mandate pension fund investments.

We will adopt reforms to make sure that workplace pension schemes take advantage of consolidation and scale, to deliver better returns for UK savers and greater productive investment for UK PLC, it added.

It said: We will also undertake a review of the pensions landscape to consider what further steps are required to improve pension outcomes and increase investment in UK markets.