Toxic pensions row at heart of Labour WhatsApp scandal threatens to undermine Reeves' growth plan

A battle to control Britain’s biggest local authority pension fund is at the heart of the WhatsApp messaging scandal that has rocked Labour, the Mail can reveal. The pensions tussle threatens to undermine Rachel Reeves’s growth plans. Health minister Andrew Gwynne was sacked and MP Oliver Ryan suspended for sharing a series of ‘vile’ sexist and racist comments in their notorious ‘Trigger Me Timbers’ messaging group that mocked colleagues and voters.

Labour also suspended 11 councillors from Tameside and Stockport councils in Greater Manchester over their involvement in the group. The messages were made public by The Mail on Sunday earlier this month in a major embarrassment for Labour. Now the Mail can reveal the simmering row between the Chancellor and other Labour councillors over pensions at the centre of the furore. Reeves wants to force 86 local authority pension schemes in England and Wales to pool their £400billion of assets and invest in the Government’s pet projects to boost economic growth.

Growth plan: Chancellor Rachel Reeves wants to force 86 local authority pension schemes in England and Wales to pool their £400bn of assets and invest in the Government’s pet projects. But her plans are vehemently opposed by the Greater Manchester Pension Fund (GMPF) whose £30billion pot is managed by Tameside Council. And some observers believe the WhatsApp scandal may be a sign of just how toxic the row has become – with vocal supporters of the Chancellor’s plan among those suspended.

The GMPF makes up almost half of the £61bn Northern LGPS pension fund that also includes the retirement pots of councils in West Yorkshire and Merseyside. Critics of Reeves’s plans fear they will force them to back riskier investments, which, if they turned sour, could. lead to lower returns for pensioners and higher bills for council taxpayers. ‘We invest 40 per cent in Britain but if we went higher, we would be increasing the risk to members,’ said a source at Tameside, which administers the pension fund on behalf of Greater Manchester’s ten local authorities.

‘These are workers’ pensions – people like cleaners who are only receiving £5,000 a year. If there is a surplus, the fund should look at improving the benefit to the thousands of people paying in.’. Among those opposed to the Chancellor’s plans are Ged Cooney, a former Labour leader of Tameside council and ex-chairman of the GMPF. He was ousted as Tameside council leader last October, along with his £187,000-a-year chief executive Sandra Stewart, following a damning report into children’s services amid claims of a ‘toxic’ and ‘bullying’ culture.

In a remarkable intervention to a council matter, Stewart’s resignation was welcomed by Gwynne and two other local MPs – Deputy Prime Minister Angela Rayner and Business Secretary Jonathan Reynolds. The trio said they had ‘made clear a change of corporate leadership was required’,adding that Tameside now had ‘the opportunity to move forward’. But insiders say the real reason the pair were purged by the Labour Party’s ruling National Executive Committee was because of their opposition to Reeves’s pension plans.

Tory Tameside councillor Liam Billington said: ‘Part of the reason for removing Cooney and Stewart is because they stand in the way of the pension fund being transferred to government control.’. Cooney has been suspended by Labour for, he claims, blowing the whistle on the WhatsApp group. He says he told party officials on numerous occasions about the ‘vile’ messages but nothing was done until the expose by The Mail on Sunday.

Chat: Health minister Andrew Gwynne (right) was sacked and MP Oliver Ryan (left) suspended for sharing a series of ‘vile’ sexist and racist comments. Intriguingly, among those suspended after their WhatsApp messages were made public are supporters of Reeves’s plan to pool the local authority pension schemes, including Brenda Warrington, an ally of Gwynne and a former Tameside Council leader who previously chaired the GMPF.

It means both opponents and supporters of the shake-up have seen their careers upended. Local authorities pay nearly £7bn a year into their staff’s ‘gold-plated’ pensions based on their final salary, with £1 in £4 raised in council tax going into the retirement plans of 6.6m scheme members. The huge sum, equivalent to a penny on income tax, is far more generous than the amount most private sector employers pay into their workers’ pension pots.

The Chancellor is pushing pension funds to back major infrastructure projects in a bid to boost anaemic growth that has flatlined since Labour took power last summer. Earmarked projects include a third runway at Heathrow and creating an Oxford and Cambridge transport and housing ‘arc’ linking the universities. But opponents say most of these projects are in the south of England and well-run schemes like GMPF’s, which has a healthy surplus, could end up subsidising financially weaker town hall funds.