Pension Schemes Bill

(Limited Text - Ministerial Extracts only)

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Consideration of Commons amendments and / or reasons
Monday 20th April 2026

(6 months, 1 week ago)

Lords Chamber
Pension Schemes Act 2026 View all Pension Schemes Act 2026 Debates Read Hansard Text Watch Debate Amendment Paper: HL Bill 187–I Marshalled list for Consideration of Commons Reasons and Amendments - (17 Apr 2026)
Moved by
Baroness Sherlock Portrait Lord Katz
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That this House do not insist on its Amendment 1, to which the Commons have disagreed for their Reason 1A.

1A: Because the Commons consider that it is not necessary to include the asset and location provisions mentioned in the amendment.
Lord Katz Portrait Lord in Waiting/Government Whip (Lord Katz) (Lab)
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My Lords, in moving Motion A, I will also speak to Motions B, B1 and C. The Commons have disagreed with Amendment 1 on the grounds that it could introduce, rather than mitigate, risks that the provision in Clause 2 could be used in unintended ways. Amendment 1 would place an explicit prohibition on regulations made under Clause 2, including any provision requiring investment in particular assets or asset classes, or in particular locations.

I acknowledge the concern that lies behind this amendment, and I wish to reiterate the Government’s position clearly for the benefit of the House. The Government have no intention of using the powers in Clause 2 to require asset pool companies to invest in specific assets, asset classes or locations. The Bill, as drafted, does not provide a legal basis for the Government to tell asset pool companies what investments should be made or where those investments should be located. Indeed, by expressly setting out particular matters that regulations may not address, the amendment risks introducing ambiguity about the scope of the regulatory making power. It could invite the inference that matters not explicitly excluded are in fact permissible; such an approach could therefore weaken the clarity of the legislative framework and increase the risk of misinterpretation or challenge.

I note that, in 2020, the Supreme Court ruled that the powers to make LGPS regulations had to be interpreted in line with Parliament’s intention, which was that LGPS investment decisions should be made in a way consistent with funds’ fiduciary duties. Although the Bill provides for asset pool companies to take investment decisions rather than funds, there is nothing in the Bill that overrides this broader intention, meaning there is nothing in the Bill that allows Government to tell asset pool companies to invest in specific assets, asset classes or locations. For these reasons, the Commons were of the view that Amendment 1 is both unnecessary and potentially counterproductive. The Government agree with that assessment.

Motion B sets out that this House do not insist on its Amendment 5 because the Commons consider that it is not appropriate to impose the publication requirements mentioned in the amendment, and that any additional requirements should be considered after the next report under Section 13 of the Public Service Pensions Act 2013 has been prepared. I thank the noble Viscount, Lord Younger, for his amendment in lieu in Motion B1, the intent of which, I believe, is already substantively met by the Government Actuary’s statutory Section 13 review of the LGPS valuations and the consultation on Regulation 64A, which relates to interim valuations, that MHCLG has already committed to running later this year.

The 2025 LGPS valuation has recently concluded. I am pleased to note that, taken across the whole scheme, the average employer contribution rate reported at the 2025 valuations of the LGPS in England and Wales has reduced by slightly less than 5% of pensionable pay, relative to the equivalent amount quoted for the 2022 valuations. This figure has been confirmed by the GAD’s analysis of the published valuation reports. There is of course variation to this across the country, and I understand the concern with ensuring that valuations are balancing stability for the scheme with value for money for the taxpayer.

As I have referred to both in Committee and on Report, under Section 13 of the Public Service Pension Schemes Act 2013, MHCLG appoints the Government Actuary to undertake a review of the valuation. As part of this review, I have already committed that the department will ask the Government Actuary for a consideration of the issue of prudence. Specifically, the Government Actuary’s Department will look at the levels of prudence inherent in the contribution rates set by funds, to ensure that a balanced view of liabilities is being taken in the context of an open scheme. This will include any prudence margins used within the discount rates, as well as other sources of prudence, such as the stability buffers and stabilisation mechanisms used by funds. While the Government Actuary’s Department does not believe that any of the actuarial firms would characterise their valuation methods as being gilts-based, they recognise that some of the rates used by funds in the 2025 valuation are similar to prevailing gilt yields at the valuation date. Discount rates have therefore been set by reference to the long-term investment horizon and characteristics of the actual assets backing funds’ liabilities, but are then reduced by some funds to gilt-rate levels by the inclusion of prudence and stability margins.

I further commit that the department will ask the Government Actuary to consider the methods being adopted by fund actuaries for managing risk and reflecting the long-term funding objectives of the scheme. It will ask whether there would be benefit to including additional illustrative valuations in valuation reports, and, if so, what they should be based on. It will also ask whether pension funds and their actuaries are engaging effectively with employers on the setting of contribution rates, including whether the information is being provided in a way that is comprehensible to the lay reader. The Government Actuary has already committed to publishing its Section 13 report next spring, an acceleration of previous timetables.

In addition, the department committed to consulting on interim contribution rates later this year. This consultation will consider how and when it might be appropriate for an employer to use this review mechanism, including significant shifts in financial pressures on local authorities and other employers. It will also consider whether there should be a link to the Section 13 review of the valuation.

I trust these points give reassurance that the Government take noble Lords’ concerns seriously and that the Section 13 review will address them. I respectfully ask that the noble Viscount does not press his amendment.

Finally, I turn to Motion C. Amendment 6 seeks to update the current regulation that allows employers to seek an interim review of contributions within the three-yearly cycle of valuations. As I said previously, on the question of access to interim reviews of contribution rates, the department has already committed to consulting on interim contribution rate reviews later this year. This consultation will consider how and when it might be appropriate for an employer to use this review mechanism, including whether there should be a link to the Section 13 review of the valuation, and the relative balance of responsibility between the fund actuary and the administering authority. Any such changes would then be brought forward by the Government in regulations, having followed the proper process and met the statutory requirement to consult.

Noble Lords will be pleased to hear that departmental officials have already made clear to administering authorities that, should they receive requests for an interim review of their valuations, they need to engage with their substance, communicating clearly and transparently the process, and that any review must be in line with the policies set out in the funding strategy statement.

I urge all noble Lords to support Motions A, B and C, and that the amendment in lieu in Motion B1 is not pressed. I beg to move.

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Lord Palmer of Childs Hill Portrait Lord Palmer of Childs Hill (LD)
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My Lords, I thank the Minister for explaining things in great detail from the Government’s perspective.

I will speak to Motion B1, which the Minister said has already been met. The Local Government Pension Scheme already has mechanisms to review and amend employer pension contributions and funding practices; for instance, under Regulation 64A of the Local Government Pension Scheme Regulations 2013. There is even an existing GAD reporting mechanism under the Public Service Pensions Act 2013, which reports on compliance, consistency, solvency and long-term cost efficiency, with such reports having been carried out in 2018, 2019 and 2024. Therefore, we on these Benches think that the Government’s efforts should be focused—as they are, I think—more on implementing the recommendations of those reports, rather than duplicating efforts. We will probably abstain on Motion B1; we recognise its importance but think it is already being met.

Motion C is a government Motion, so I come to Motion D. Amendment 13 would extend the period before a pension pot is classified as dormant, increasing the threshold from one year to three years. We supported this increase earlier in the passage of the Bill, as it would provide greater flexibility for savers such as mothers, those on sabbatical or mature students. Motion D1, from the noble Baroness, Lady Altmann—

Lord Katz Portrait Lord Katz (Lab)
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Motions D and D1 are the opening Motions of the next group.

Lord Palmer of Childs Hill Portrait Lord Palmer of Childs Hill (LD)
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It says “D1” on the Order Paper.

Lord Katz Portrait Lord Katz (Lab)
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It is in the second group.

Lord Palmer of Childs Hill Portrait Lord Palmer of Childs Hill (LD)
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I see. I am sorry. Forgive me, I was going on to the next group.

On Motion B1, we will abstain rather than vote against it, because we think that these things are already in process, if dealt with properly.

Lord Katz Portrait Lord Katz (Lab)
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I am glad that, for once, our debate on the LGPS has been short and sweet. I thank both opposition Front Benches for their engagement on this issue. I am glad that the noble Viscount, Lord Younger, recognised that there has been movement. We understand the importance attached to the nature of the reviews. I hope that what I said has met his need for us to demonstrate that we are taking it seriously, which, of course, we are.

In response to the noble Lord, Lord Palmer, I hope that he will be in a position where his abstinence will not be needed because the noble Viscount will not be testing the opinion of the House, but we shall see. I beg to move.

Motion A agreed.
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Moved by
Baroness Sherlock Portrait Lord Katz
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That this House do not insist on its Amendment 5, to which the Commons have disagreed for their Reason 5A.

5A: Because the Commons consider that it is not appropriate to impose the publication requirements mentioned in the amendment; given that the next report under section 13 of the Public Service Pensions Act 2013 will be prepared in the near future.
Lord Katz Portrait Lord Katz (Lab)
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I have already spoken to Motion B. I beg to move.

Motion B1 (as an amendment to Motion B) not moved.
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Moved by
Baroness Sherlock Portrait Lord Katz
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That this House do not insist on its Amendment 6, to which the Commons have disagreed for their Reason 6A.

6A: Because the Commons consider that it is not necessary to include the interim review provisions mentioned in the amendment; and the Government has committed to carrying out a consultation on this topic.
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Moved by
Baroness Sherlock Portrait Baroness Sherlock
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That this House do not insist on its Amendment 13, to which the Commons have disagreed for their Reason 13A.

13A: Because the Commons consider that it is not appropriate to increase the length of the dormancy period as this would be detrimental to members of pension schemes.
Baroness Sherlock Portrait The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)
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My Lords, I shall speak also to Motions J, J1, K, K1 and L.

As I have previously outlined, we cannot accept Lords Amendment 13 on small pots or Amendment 13B within Motion D1, tabled by the noble Baroness, Lady Altmann, which would extend the dormancy period for automatic consolidation from 12 months to 36 months or 24 months respectively. Extending the threshold would materially lengthen the period for which a pot remained dormant. This would be detrimental both to individual members, who would incur multiple sets of charges for longer, and to the wider scheme membership, which, in effect, subsidises the small deferred pots, which are uneconomic for schemes to administer. We estimate that extending the dormancy period from 12 to 24 months would generate additional industry costs of around £25 million a year, which would most likely simply be passed on to members.

The Government did not invent this scheme. The 12-month timeframe formed part of the proposal that was consulted on in 2023 with stakeholders across the pension industry and consumer representative bodies, and it reflects a supported middle ground. The previous Government concluded that a period of 12 months struck the appropriate balance, allowing eligible pots to be identified for consolidation while seeking to avoid certain situations; for example, where individuals who, for a range of reasons, may have temporarily ceased pension contributions but remain with their existing employer and are likely to return to pension saving. The 12-month figure was not plucked out of thin air; it was a judgment underpinned by consultation and evidence, not speculation. It is supported by a strong set of safeguards, most notably the individual’s right to opt out of consolidation.

Throughout the development of this policy, my department has engaged with a range of stakeholders, including consumer representative bodies. For example, Which? was part of our small pots delivery group, and it welcomed the safeguards that we have put in place, which it agrees are sufficient.

I understand from previous debates that noble Lords, including the noble Baroness, Lady Altmann, have concerns that 12 months might be too short for certain individuals, particularly those who take career breaks, say, for maternity leave or caring responsibilities, and experience fluctuating earnings. But the 12 month dormancy period is triggered only where no contributions have been made for a full year. Periods of paid maternity leave, for example, would see contributions continue, and a pot would become dormant only after 12 months of unpaid leave.

Currently, only pots worth £1,000 or less will be eligible for consolidation. For context, a full-time worker on the national living wage would typically exceed that threshold after nine months of saving. That means that individuals with longer periods of continuous employment are unlikely to have pots that fall into scope. It cannot be a common occurrence that someone who has saved less than £1,000 and then had no contributions for at least 12 months would recommence saving with the same employer once it had entered dormancy. Nevertheless, we recognise that such circumstances could occur. That is why we have built strong safeguards into the policy. Most importantly, every member will receive a transfer notice ahead of any consolidation, giving them a clear opportunity to opt out if they judge that consolidation is not in their best interests.

Finally and crucially, the Bill already requires regulations to set a minimum 12 month period for a pot to be classified as dormant. That threshold could be set at a longer period or extended in future through secondary legislation if the evidence justified such a change.

I think we all agree on the need to consolidate small pots to protect savers and all other members from multiple years of charges on multiple pots eating away at their savings. I hope that the noble Baroness, Lady Altmann, can see that extending the dormancy period would harm the vast majority of members in a known and avoidable way to add further protection for a very small number of hypothetical cases. The best way to protect those cases is through building full and proper safeguards into the policy, which is what this Bill does. After that compelling argument, I hope that she will be willing not to press her amendment, when we come to that point.

Lords Amendment 77 would require the Secretary of State for Work and Pensions to conduct and publish a review of the long-term affordability of public service pension schemes. The Government cannot accept the amendment as it is unnecessary and technically defective. It is unnecessary, as detailed information about the cost of the unfunded public service pension schemes is already publicly available. The OBR undertakes analysis of both the near-term and long-term cost of the schemes, including the Treasury’s central measure of affordability: 50-year projections of pension payments as a proportion of GDP. Contrary to suggestions made in Committee and on Report, the cost of the schemes is forecasted to fall under this measure, from 1.9% to 1.4% of GDP.

On Report, we heard suggestions that savings arising from the Hutton reforms had not and would not materialise. That is simply incorrect. The coalition Government forecasted savings of around £400 billion by 2065 as a result of the substantial reforms made to the schemes in 2014-15, but implementation of the reforms was, in effect, set back because the courts found that the way in which the coalition Government had introduced them was discriminatory on grounds of age. That incurred costs of around £17 billion, but crucially, it will not impact the savings going forward. Those are the key drivers behind the fall in costs over the long-term.

Every four years, detailed actuarial valuations of each of the schemes are undertaken and published. They set out the cost of providing benefits to current staff and the cost of meeting all accrued liabilities. The valuations test the cost of the schemes against the cost control mechanism, introduced by the coalition Government as part of the Hutton reforms, and they provide for benefits to be adjusted if those have deviated from target levels. Pension costs are also set out in the financial accounts for each of the schemes and collectively in the whole of government accounts. This information is produced in accordance with international accounting standards.

The amendment is not necessary because the risks arising from changes to longevity are already managed in the design of the schemes. This came up on Report. The retirement age in the schemes, except those for police, firefighters and the Armed Forces, is the state pension age. In any case, the cost control mechanism would be triggered if costs rose due to longevity improvements that were not managed by changes to state pension age.

The suggestion made on Report was that the fact that some of the public service schemes are operated on a pay-as-you-go basis means that they must be unaffordable, but “unfunded” does not mean “unaffordable”. In general, the Government do not pre-fund future liabilities by holding assets at all. Details of the Government’s policy on whether to hold assets in relation to specific liabilities is set out clearly in Annex 4.16 of Managing Public Money, should anyone want to look it up.

There is clearly an opportunity cost to holding assets in a fund, which are invested with the sole objective of having enough returns to meet future liabilities. Holding funds can create technically allocative inefficiencies across the public sector. The liability can clearly be more efficiently managed in the round with other unfunded liabilities, met out of general taxation as they fall due.

The amendment would not work, because it would require the Secretary of State for Work and Pensions to undertake a review on a matter that does not fall within their responsibilities and for which statutory responsibility sits elsewhere, including with the devolved Administrations.

Comprehensive information is already available, published and regularly updated on the cost of public service pensions. There is demonstrably already transparency on all the points raised by noble Lords during the debates, and the amendment is, in the Government’s view, therefore unnecessary. We will continue to ensure that public service pensions are properly costed, transparently reported and kept under review through existing mechanisms. So, I hope that the noble Baroness will not press her amendment.

I turn to Amendments 78 and 86. These amendments engage Commons financial privilege. The House of Commons has therefore disagreed with the amendment and has not offered any further reason. As noble Lords will know, it is a long-standing convention that this House does not insist on amendments which the other place has rejected on grounds of financial privilege. But I will briefly explain why the Government do not agree with the policy intent. These amendments would not do what I suspect the movers hoped they would, which is to enable the PPF to pay lump sum payments to its members on top of the periodic compensation it provides.

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Viscount Younger of Leckie Portrait Viscount Younger of Leckie (Con)
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My Lords, I thank the noble Baroness, Lady Altmann, my noble friend Lady Neville-Rolfe and the noble Viscount, Lord Thurso, for their Motions in this group. In the interest of brevity, I shall focus my remarks only on Motion J1.

My noble friend Lady Neville-Rolfe is fundamentally asking the important question of whether we are being sufficiently clear about the long-term sustainability and transparency of the system as it currently stands. The central concern is this: unlike funded schemes, these pensions are not backed by accumulated assets. They are paid out of current taxation, and that means that the cost is not contained within a fund but passed forward, year by year, to future taxpayers. As the number of public sector employees grows, and as people live longer, those obligations grow with them.

There is also a question of incentives. Decisions about expanding the public sector workforce or adjusting pay inevitably carry pension implications that stretch decades into the future, yet those costs are often diffuse, uncertain and ultimately borne by the Exchequer. Without a clear and accessible understanding of the long-term consequences, it is difficult, if not impossible, for decision-makers to weigh those trade-offs properly. A review would allow us to bring together the evidence, to test the assumptions and to ensure that policy is being made on the basis of a clear and realistic understanding of the facts.

For those reasons, including the four key reasons outlined by my noble friend, I believe that there is a strong case for the review proposed, and I am very pleased to support this Motion.

Baroness Sherlock Portrait Baroness Sherlock (Lab)
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My Lords, I am grateful to all noble Lords for their questions and comments. I spoke at some length at the start, and I think I answered most of the questions pre-emptively—or tried to—so I will not dwell on them.

On a couple of specifics, and to reassure the noble Baroness, Lady Altmann, and the noble Lord, Lord Palmer, as I stressed, the Bill says a minimum of 12 months simply because we want to be able to respond to any changes. If there is evidence that we need to make it longer, we can; if there is evidence we need to extend it later, we can do so in secondary legislation. It is set up to do that, and I can give her that assurance.

I am not going to get into America. For me, as parallels go, whether we have one or two years’ opt-out and who is the ambassador to the United States are probably slightly separate categories of decisions. Noble Lords will forgive me if I do not go there.

In response to the noble Lord, Lord Vaux, the two policies operate independently but the intention is that dashboards will be available before the small pot consolidation. I reassure the noble Lord, with the small pots he has scattered around, that he will be written to and given the opportunity to opt out, so that they will not be consolidated without his knowledge or against his will. I hope he will look out for that in due course and can then make appropriate decisions.

The noble Baroness, Lady Neville-Rolfe, asked about the presentation of information. The Treasury is exploring options to present pension liabilities on a constant basis. It is important to be clear that any such presentation would be supplementary. It would not affect the underlying liability, as the noble Baroness knows well, or the way they are presented in financial statements, but it would help to add an extra level of clarity to those who are reading them. I think I have made all the arguments around affordability and the nature of them.

I have one final word for the noble Viscount, Lord Younger, who feels there is no way for decision-makers to make appropriate judgments about the affordability of pension schemes without a review such as this. I think he should have more confidence. The coalition Government, of which his party was the leading member, reformed almost all the public service pension schemes and created a new system, and that is what we now have. A lot of work was done then and is being done now. The measures of affordability that I have described are such that the schemes have that corrective factor straight in them. The fact that the information is out there and published will, I hope, be enough. I therefore urge noble Lords not to press their Motions.

Baroness Altmann Portrait Baroness Altmann (Non-Afl)
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My Lords, I thank all noble Lords who have spoken. As I said, I will not press Motion D1 to a Division. I beg leave to withdraw the Motion.

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Moved by
Baroness Sherlock Portrait Baroness Sherlock
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That this House do not insist on its Amendments 15 to 24, 27, 30 to 34, 36, 38 to 42, 83 and 88, and do agree with the Commons in their Amendments 88A to 88C to the words restored to the Bill by the Commons disagreement to Lords Amendments 15 to 24, 27, 30 to 34, 36, 38 to 42, 83 and 88.

88A: Clause 40, page 46, line 16, at end insert—
“(5A) Regulations under subsection (4) must secure that a description of asset is prescribed under that subsection in respect of each example mentioned in subsection (5)(a) to (d).”
88C: Clause 40, page 46, leave out lines 31 and 32
Baroness Sherlock Portrait Baroness Sherlock (Lab)
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My Lords, in moving Motion E, that this House do not insist on its Amendments 15 to 24, 27, 30 to 34, 36, 38 to 42, 83 and 88 and do agree with the Commons in its Amendments 88A to 88C, I will speak also to Motions F, F1, G, G1 and H.

Motion E deals with Amendment 15 and those connected with it, which sought to remove the reserve power on asset allocation from the Bill. The case for removing the power was pressed firmly in Committee and on Report, led by the noble Baroness, Lady Bowles, and supported by a number of other noble Lords. The Government have always taken those arguments seriously, and I hope our response demonstrates that. However, the Government continue to believe that the reserve power is necessary.

The collective action problem in the defined contribution market, where competitive pressure on costs discourages providers from diversifying even when they recognise it would benefit their members, is well-evidenced and has been acknowledged by the industry itself. The Mansion House Accord represents a welcome voluntary commitment, but the risk is real that individual providers defer action until others move first. The reserve power exists to underpin those commitments, giving each provider confidence that the rest of the market will move too.

This collective action problem is not simply a theoretical concern or a government preoccupation. Last autumn, signatories to the Mansion House compact—a predecessor agreement on private markets investment, negotiated under the previous Government—published their own progress update. What was the single biggest barrier to delivering on their commitments? In their words,

“market dynamics continue to focus on minimising cost instead of maximising long-term value”,

and that without intervention to shift that culture,

“‘too much focus on cost’ remains the key barrier”.

That is the collective action problem in a nutshell: providers recognise that greater diversification can benefit their members but competitive dynamics hold them back from acting on it.

However, I gave undertakings during the passage of the Bill to reflect on the concerns raised by noble Lords, and I have done so. The amendments in lieu before the House today respond directly to those concerns in two important respects. First, the Government have placed a cap in the Bill so that regulations may require not more than 10% of default fund assets to be held in qualifying assets overall or more than 5% to be of a UK-specific description. This is a significant step. The Government have always been clear that the power is a backstop to the Mansion House Accord, which applies those specific targets to DC providers’ main default funds and no more.

I heard the argument—pressed particularly by the noble Viscount, Lord Younger of Leckie, and the noble Baroness, Lady Stedman-Scott, in amendments that they tabled, with the support of others—that that commitment should be written into primary legislation rather than resting on ministerial assurance alone. This amendment does exactly that. It gives the industry and savers alike the confidence that no Government can use these powers to go beyond the accord’s percentage commitments.

Secondly, the Government have established a principle of neutrality between asset classes. These amendments remove the ability for regulations, should they try to do so, to weight the requirement towards any single category of private asset, and require that qualifying asset descriptions are prescribed across each of the private market categories set out in the Bill—so the Government could not, for example, concentrate the entire requirement in infrastructure, still less direct it into a particular sector or company. This responds to a type of concern expressed by noble Lords during the Bill’s passage about the breadth of the power and the risk that a future Government might use it for purposes unrelated to the accord. The neutrality requirement, taken together with the established principles of public law to which any secondary legislation must conform, provides a robust constraint against such misuse.

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Lord Lucas Portrait Lord Lucas (Con)
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My Lords, it is utterly ridiculous that only 5% of UK pension funds are invested in the UK. The figure was 50% when I was a pension fund manager. The difference is entirely down to us as politicians. The solution is not to compel financial managers to do things; it is to understand what we did to make this happen and undo at least some of it. If the Government want quick access to priorities, they should turn to the members. The members believe in this country. Their interest is in it being a prosperous country, with lots of investment coming into it. Give them more influence over what pension funds do. They should not go for this government mandation; it is a dead end and, at its heart, poisonous.

Baroness Sherlock Portrait Baroness Sherlock (Lab)
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My Lords, I am grateful to all noble Lords for their comments. Having spoken at some length at the start, I will not respond at length. I shall just pick up a few points.

On the question on fiduciary duty, nothing in the Bill disapplies trustees’ existing duties of loyalty, prudence and acting in members’ best interests. Those continue to apply in full. Were this power ever to be used—I repeat, the Government do not expect to use it—and the asset allocation requirements were in place, the savers’ interest test allows a scheme to seek an exemption if it can show that compliance would cause material financial detriment to members. Not only would they be enabled to do that but we would expect the fiduciary duty to require the trustees to make such an application to the regulator. Trustees are not directed to invest in any specific asset or project, and if they believe that the requirements are not in the members’ best interests, again, they should apply for an exemption.

The neutrality amendments provide a meaningful constraint. The Government must prescribe qualifying asset descriptions across each of the private market categories in the Bill, so they could not load an entire requirement into a single asset class, let alone a pet project or specific investment. Any future Government who attempted to define qualifying assets in a way designed to serve their own policies or a pet project, rather than savers’ interests, would clearly be vulnerable to legal challenge on rationality grounds.

I am not going to debate this at length since the noble Lords have made clear their intention to test the opinion of the House irrespective of whatever I say. I have just two other comments, on scale. I take the point made by the noble Baroness, Lady Stedman-Scott, that the Government should be pragmatic. I completely agree. My problem with her amendment is that it is not practical, so I cannot be pragmatic in trying to apply an amendment that is really clear in the matter of scale but would simply be too difficult to apply, because it is not clear what the nature of the test would be and it would end up getting bogged down in the courts for years, giving the regulator an impossible job. That simply does not work.

I have made the point about competition in our previous, long debate, and I do not doubt we will return to it again should the Bill not all disappear tonight. In the light of that, I hope that noble Lords feel able not to press their amendments.

Baroness Bowles of Berkhamsted Portrait Baroness Bowles of Berkhamsted (LD)
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My Lords, we have heard continued disagreement with mandation and coercion from across the House. As the Minister has said, we do not need to re-rehearse all the things that we have already said, but something that stuck in my mind from a previous stage was when the Minister said that if we did not have mandation, it would rest on good faith alone. That is the whole point: I think there is good faith in the City to deliver on this, and not to trust it, exactly as the noble Lord, Lord Remnant, has said, damages relationships and any good faith and trust in government. This is therefore doubly, trebly and quadruply a bad thing for the Government to have suggested, and I hope they will have a change of mind. I wish to test the opinion of the House.

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20:05

Division 4

Motion E1 agreed.

Ayes: 219

Noes: 144

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Moved by
Baroness Sherlock Portrait Baroness Sherlock
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That this House do not insist on its Amendments 26 and 37, to which the Commons have disagreed for their Reason 37A.

37A: Because the Commons consider that there are significant benefits to members of pension schemes from the existing scale requirements in the Bill.
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20:17

Division 5

Motion F1 agreed.

Ayes: 216

Noes: 148

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Moved by
Baroness Sherlock Portrait Baroness Sherlock
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That this House do not insist on its Amendment 35, to which the Commons have disagreed for their Reason 35A.

35A: Because the Commons consider that it is not necessary to impose further requirements relating to innovation and competition.
Baroness Sherlock Portrait Baroness Sherlock (Lab)
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I beg to move Motion G.

Motion G1 (as an amendment to Motion G)

Moved by
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20:28

Division 6

Motion G1 agreed.

Ayes: 211

Noes: 150

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Moved by
Baroness Sherlock Portrait Baroness Sherlock
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That this House do not insist on its Amendment 43, to which the Commons have disagreed for their Reason 43A.

43A: Because the Commons consider that it is not necessary to impose further requirements relating to innovation and competition.
Baroness Sherlock Portrait Baroness Sherlock (Lab)
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My Lords, I have already spoken to Motion H. I beg to move.

Motion H agreed.
Moved by
Baroness Sherlock Portrait Baroness Sherlock
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That this House do not insist on its Amendments 77 and 85, to which the Commons have disagreed for their Reason 85A.

85A: Because the Commons consider that it is not necessary to duplicate existing information regarding public sector pension schemes.
Baroness Sherlock Portrait Baroness Sherlock (Lab)
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My Lords, I have already spoken to Motion J. I beg to move.

Motion J1 (as an amendment to Motion J)

Moved by
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20:40

Division 7

Motion J1 agreed.

Ayes: 162

Noes: 151

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Moved by
Baroness Sherlock Portrait Baroness Sherlock
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That this House do not insist on its Amendments 78 and 86, to which the Commons have disagreed for their Reason 86A.

86A: Because it would alter the financial arrangements made by the Commons, and the Commons do not offer any further reason, trusting that this Reason may be deemed sufficient.
Baroness Sherlock Portrait Baroness Sherlock (Lab)
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My Lords, I have already spoken to Motion K. I beg to move.

Motion K1 (as an amendment to Motion K) not moved.
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Moved by
Baroness Sherlock Portrait Baroness Sherlock
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That this House do not insist on its Amendments 79 and 87, to which the Commons have disagreed for their Reason 87A.

87A: Because the Commons consider that it is not necessary to carry out a review of existing legislation relating to pension communications and financial promotion rules.
Baroness Sherlock Portrait Baroness Sherlock (Lab)
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My Lords, I have already spoken to Motion L. I beg to move.

Motion L agreed.