£500 Billion. Ten Years of Being Ignored. And Now Reform Has Picked It Up.
Made in Britain Labour and the Conservatives didn't want to know. Reform UK, do.
For over a decade Professor John Clancy, former Labour Leader of Birmingham City Council, and Professor Dave Bailey of Birmingham University argued that Britain’s £500 billion Local Government Pension Scheme should be consolidated into a sovereign wealth style fund capable of rebuilding our own regions. They took it to Labour. They took it to the Conservatives. They were politely thanked and firmly ignored. Now Reform UK, through its Deputy Leader and MP Richard Tice, has embraced it as a central economic policy. And that should trouble the traditional parties far more than it troubles Reform’s critics.
There are ideas that burst into politics fully formed.
And there are ideas that sit patiently on the shelf, well researched, carefully argued, repeatedly presented, and repeatedly declined.
This one belongs to the second category.
For years the Professors have been making a simple structural argument.
The UK’s Local Government Pension Scheme holds almost £500 billion in assets.
Nearly one hundred separate funds.
Multiple governance boards.
Layers of consultants.
Layers of external asset managers.
Significant management fees.
No unified strategic direction.
Half a trillion pounds.
Their argument was not ideological theatre. It was economic mechanics.
Consolidate the funds.
Professionalise management.
Reduce fee leakage.
Achieve scale efficiencies.
Create a sovereign wealth style investment vehicle capable of backing British infrastructure, British housing, British industry.
Patient capital.
Disciplined capital.
Long term capital.
They took this to Labour. They took it to the Conservatives. They discussed it across parties.
The response was always courteous.
Very interesting.
Worth exploring.
We will reflect.
And then nothing.
No structural reform. No serious consolidation. No sovereign mandate.
Just drift.
Now, Richard Tice, Deputy Leader of Reform UK and a sitting MP, has publicly embraced the proposal as a major plank of Reform’s economic strategy. A £500 billion sovereign wealth style fund built from better management and consolidation of Local Government Pension assets.
And suddenly what was ignored for a decade is headline policy.
The irony is almost painful.
This is not a Thatcherite free market proposal. It is interventionist. It is structural. It involves the state reshaping capital allocation frameworks.
In older language, it would have been called industrial strategy.
The Labour Party I joined in the 1970s would have recognised it instantly.
And yet it is Reform that has stepped forward and said: we will do this.
Professor Clancy is no longer a member of the Labour Party. Nor, as I understand it, is Professor Bailey. Both have drifted away over the years, disillusioned with the direction modern Labour has taken.
I remain a Labour member.
And I say this plainly: losing minds like Clancy and Bailey is a loss.
Not because they agree with every plank of Reform’s platform. They do not. Nor do I.
But because they represent something Labour once valued, serious economic thinking tied to national development.
What troubles me most is not that Reform has picked up the idea.
It is that Labour did not.
The explanation lies in something deeper than ideology.
It lies in inertia.
Modern Westminster is fluent in buzzwords.
Growth.
Resilience.
Levelling up.
Fairness.
Green transition.
Every speech is salted with them.
But when confronted with structural capital reform on a half trillion pound scale, the energy drains away.
There are always reasons not to proceed.
It is complex.
It is sensitive.
It may unsettle markets.
It requires consultation.
It needs further modelling.
And so the file returns to the drawer.
The Local Government Pension Scheme continues in fragmented form. Almost 100 funds operating semi autonomously. Consultants collecting fees. External managers charging percentage points that compound into billions over time.
Meanwhile, council workers in the West Midlands contribute to pension funds that are frequently invested in global equities, overseas infrastructure, foreign property portfolios.
All legitimate.
All compliant.
But ask the question plainly.
Why are we harvesting capital from the West Midlands and exporting it abroad, while our own housing shortages intensify and our own infrastructure creaks?
Why is British deferred wage capital not playing a clearer role in rebuilding Britain?
Norway did not simply accumulate oil revenues and scatter them aimlessly. It created a sovereign wealth fund with scale and discipline.
Singapore built state backed investment vehicles that shaped national development.
Britain appears paralysed by caution.
The traditional parties seem increasingly content to let civil servants administer decline rather than design renewal.
There is no shortage of intelligence in Westminster.
There is a shortage of conviction.
It is easier to virtue signal about fairness than to restructure capital markets.
It is easier to announce frameworks than to consolidate pension funds.
It is easier to commission reviews than to disturb comfortable advisory ecosystems.
The Conservatives had fourteen years in government and never built a coherent sovereign capital structure.
Labour speaks the language of growth but hesitates at structural reform.
And so an insurgent party steps in.
You can disagree with Reform on many issues. I do on several.
But on this question, they have demonstrated something the traditional parties currently lack.
Nerve.
Half a trillion pounds already exists within the system.
This is not about confiscation.
It is about governance.
Consolidation brings scale.
Scale brings bargaining power.
Bargaining power reduces fees.
Lower fees strengthen pension security.
A sovereign wealth style vehicle, insulated from day to day political interference and run by serious investment professionals, could generate long term returns while backing domestic productive assets.
If designed badly, it could be politicised.
If designed properly, it could be transformative.
The debate should be about design, not dismissal.
Instead, for ten years, dismissal is what it received.
Professor Clancy and Professor Bailey argued from economic conviction, not party tribalism. They believed Britain could manage its capital more intelligently.
Labour once had room for that kind of thinking.
Losing it is not progress.
It is drift.
And when drift becomes the governing philosophy, others will step into the vacuum.
Reform did not invent this idea.
They simply listened.