The chancellor is to announce plans to unlock capital for high-growth businesses and boost outcomes for pension savers later today.
In his Mansion House speech today (July 10), Jeremy Hunt will outline his ‘three golden rules’ for the economy, building on the Edinburgh Reforms he announced at the end of last year.
“Firstly everything we do we will seek to secure the best possible outcomes for pension savers, with any changes to investment structures putting their needs first and foremost,” Hunt is expected to say.
The second focus will be to prioritise a ‘strong and diversified gilt market’, the chancellor will say.
“It will be an evolutionary not revolutionary change to our pensions market.
“Those who invest in our gilts are helping to fund vital public services and any changes must recognise the vital role they play.”
The third ‘golden rule’ will be that the decisions taken by the government “must always strengthen” and never compromise the UK’s position as a leading financial centre able to fund the country’s public services.
Hunt will also say there can be no sustainable growth for the UK economy without first eliminating the inflation that “deters investment” and erodes consumer confidence.
David Livingstone, chief executive, Emea, Citi Group, said a government plan to reform the pension system to emphasise net returns would be key to the “collective prosperity” of all the country’s pensioners, while also creating a higher growth, more productive and innovative economy.
“Based on Citi’s experience working with investors and pension funds around the world, consolidating funds often increases efficiency and improves access to global, diversified investment opportunities, which would be immensely beneficial to the UK, home to the second-largest pool of long-term capital in the world,” he said.
Chris Cummings, chief executive of the Investment Association, said the chancellor’s comments recognise that investment “must be at the heart” of our economy.
"With the right regulatory framework, pension schemes will be able to invest productively and sustainably, unlocking further investment for innovative growth companies, and improving returns for savers by broadening investment options.
“In tandem with reforms to the listings regime, this will help the UK to become a more globally attractive place for companies to list, invest and do business,” he added.
sally.hickey@ft.com
