A senior economic adviser to the Labour Party has called for the nationalisation of the UK’s pensions system, suggesting a new national investment bank should manage the public’s savings rather than private asset managers.
Speaking with Wealth Manager sister title New Model Adviser®, Ann Pettifor, an economist and fellow of the New Economics Foundation think-tank, said people’s pensions are at ‘grave risk’ by being managed by the likes of and a publicly owned body should manage them instead.
‘The savings we generate over a lifetime should not be managed by the market,’ she said. ‘Instead they should be managed by a publicly interested body, not a privately interested body; a national investment bank for example.
‘The fact is we are at grave risk, because we don’t know what BlackRock is doing with our pensions out there and it could all blow up and go badly wrong. It is all in [exchange-traded funds] and wherever it is and we don’t know what is happening.
‘I think because they are our savings, we have some leverage here and we could deny them [private asset managers] the access to all our lovely money.’
Pettifor, an author of several books on economics, wrote of a looming debt crisis before the financial crash of 2008, in her 2006 book, The Coming First World Debt Crisis. In 2015 she joined Labour’s Economic Advisory Committee.
She was speaking yesterday at The World Transformed conference, a sister event to the Labour Party Conference in Liverpool.
Pettifor told a fringe event she thinks the UK will ‘probably’ get a new Labour-led [Jeremy] Corbyn government after the next financial crisis, which will see try and deal with a ‘massive mess’.
When asked by New Model Adviser® after her speech, Pettifor said the next financial crisis is likely to be a result of a combination of high corporate debt, the US Federal Reserve raising interest rates and unwinding quantitative easing.
‘For me, one of the threats is corporate debt because I think that has got very high. As Jerome Powell [chairman of the Federal Reserve] starts raising interest rates, any high level of debt will cause a problem.
‘For me the next crisis will come when the Fed does what it is doing now by raising interest rates and to contract its balance sheet by shedding assets. That is already causing turmoil in the world; it is causing turmoil in the periphery and it is going to move to the core because the global system is so integrated.’