Anthony Hilton: Byrne’s right on pension funds – bigger is better

To Birmingham for an interesting speech from Liam Byrne – he who as a member of the Labour Government Treasury team famously left the note after the 2010 election warning the incoming Chancellor there was no money left.

Mr Byrne's thesis was that we have far too many small pension schemes and rules should be introduced to force them to merge into larger, more efficient units.

In this he is surely correct. In small schemes, costs and charges eat up the bulk of the investment returns which mean members get lower pensions than they should. The country also suffers.

In Canada, the Netherlands and elsewhere, huge pension funds finance big, long-term housing and infrastructure projects which deliver huge, economic benefit.

Here, most pension funds are too small to take such big risks so they miss out on the big returns, the country does not get the infrastructure and the pensioners get short changed.