Pension Schemes Bill

Baroness Bowles of Berkhamsted Excerpts

Consideration of Commons amendments and / or reasons
Tuesday 28th April 2026 Lords Chamber

[Baroness Altmann (Non-Afl)]

My Lords, it is a pleasure to follow the noble Viscount, Lord Thurso. I pay tribute to him. He will be much missed by this House. His work on this Bill and in many other areas has been most welcome and helpful and his demeanour and the manner in which he has co-operated with us and with Ministers has been appreciated by everybody. I declare my interests as far as pensions are concerned. I am an adviser to a master trust and a non-executive director of a pensions administration company.

I will not delay the House too long, but I want to welcome the changes that have been made. I thank the Minister for her patience, her engagement and for listening and working with this House. We have now achieved much safer and better outcomes for members of pension schemes. These will allow trustees and managers to look after the best interests of members so that they do not feel forced to invest in ways that they might not otherwise have chosen to or which are against their best judgment.

There will not be an exclusion of listed investment companies. Again, I thank the Minister and the Government for listening to the serious concerns that were expressed by this House. I also welcome the changes that we have made along the way to the Bill. It is a much better Bill. I thank all colleagues across the House who have co-operated so well.

I must pay tribute to the noble Baroness, Lady Bowles, for all the work that she has put in, and the Front Bench on this side as well, who have worked so hard to make this Bill a better Bill. I wish this Bill well. Hopefully, a lot of pension scheme members will enjoy better retirements in the future—I certainly hope so—as a result of what we are doing now.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I am pleased to have reached this stage, where we are now all back on the same side. We have had some exchanges when we have said, once upon a time, that we were all pointing in the same direction, and then we had a little bit of slippage away from that, but now we are back together. I am still no fan of mandation, but we have now got it suitably under control, if I can put it that way. There are reasonable guardrails to make sure that it does not go wrong, that we, I hope, never use it and that we get the additional investments that we all agree in principle are needed.

I thank all noble Lords who have worked on the Bill, because the work, the meetings and so forth have been harmonious. A lot of late-night working, and some early this morning, has resulted in the solutions that we now have. Like others, I thank everyone and hope we can see the rewards that come from the passage of this Bill.

[Viscount Younger of Leckie (Con)]

My Lords, the amendments brought forward by the Government today, in lieu of those proposed by the noble Baroness, Lady Bowles, go some way towards addressing our more fundamental concerns about the mandation power. In particular, the shift in the test—from requiring schemes to show that compliance

“would be likely to cause material financial detriment”

to demonstrating that it is

“likely not to be in the best interests of members”—

represents a significant and welcome change from the Government’s original position. By placing members’ best interests at the heart of the policy, this reform helps to mitigate the risk that mandation could cut across trustees’ fiduciary duties. It was never acceptable that schemes should have to show a risk of material detriment before securing an exemption, as the Government had proposed in earlier stages. The Government’s recognition of that point is therefore very welcome, albeit somewhat overdue.

I welcome the Government’s commitment to require the regulators to undertake an independent assessment of the purported collective action problem and the extent to which it is inhibiting investment in UK assets. The Government have consistently argued that mandation is necessary to address a collective action problem. They will now need to substantiate that claim with robust independent evidence, with the Secretary of State having regard to this assessment before they make regulations. That too is a welcome step forward, as is the Government’s commitment to remove discrimination in the clause between investment vehicles. Their decision to bring forward the sunset period from 2035 to 2032 is also sensible.

These changes are a direct result of sustained and determined pressure from across this House to address the question of mandation in the Bill. Noble Lords on all sides recognised early on the fundamental flaws in the Government’s original approach—concerns that were not only shared here but held strongly across industry. I pay particular tribute to the noble Baroness, Lady Bowles, who has led that effort with clarity and persistence. She has kept the House focused on what is, without question, the central issue in our consideration of this Bill. I am glad that this has borne fruit in what is a substantial move from the Government’s original position, which was untenable.

I shall not detain the House any further but will just say that we on these Benches are content to accept the amendments that the Government have introduced. I thank the Minister for her earlier remarks. The situation is far from perfect and we remain of the view that the mandation power is wrong in principle, but this settlement, which we might now call mandation-lite, is far better than that in the Bill as originally drafted. That is a direct result of the work done in your Lordships’ House to stand up for businesses and savers in our country.

Finally, as this is my very last contribution from the Front Bench, and in this House, I wish the whole House and all noble Lords the very best of luck for the future. It has been a genuine, huge privilege to serve on the Front Bench almost continuously for 15 years. Of course, I will miss it dreadfully, but I do know that there is a life outside this great House of Lords.