Jon Cruddas on responsible capitalism
Jon Cruddas is the latest Labour MP to wade into the ‘responsible capitalism’ debate.
The Labour MP for Dagenham will suggest to the Commons this afternoon that the government is not going far enough and that pensions funds must be more accountable to the people whose money they invest.
Cruddas is likely to say in an adjournment debate later: “We cannot have responsible capitalism if the capitalists think that the law prohibits them from acting responsibly...
“Making companies more accountable to shareholders will not be enough to tackle 'crony capitalism': shareholders themselves must also become more accountable to the ordinary savers whose capital they invest. Among other things, this means much greater transparency about what is being done with our money...
“This is emphatically not about hijacking pension funds' capital to serve government ends: that is a dangerous road to go down. It is about allowing them the discretion to take a broad and enlightened view of what is in their beneficiaries' interests, rather than prescribing an approach which may ill serve savers in the long run.
"Let us not forget that it was today’s interpretation of the law which saw pension funds pile into triple-A rated shares in banks whose risky activities ultimately decimated pension fund value. If funds had been encouraged to think about the sustainability of those returns, rather than just the share price, their beneficiaries might have been better served in the long-run.”
Next week business secretary Vince Cable will publish the results of his consultation on higher pay.