Pension Schemes Bill

Debate between Baroness Hayman and Baroness Bowles of Berkhamsted

3rd reading
Thursday 26th March 2026 Lords Chamber

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I did not expect to be back moving amendments quite so quickly, but despite the 20 consequential amendments that I moved on Report, four more have come to light. They are printed on the Marshalled List. They are entirely consequential on Amendment 52, which deleted mandation. All I seek to do with Amendments 1 to 3 and 8 is to move them formally when the time comes. I beg to move.

[Baroness Hayman (CB)]

My Lords, I will say a word or two at this stage about government Amendment 4, because I understand it relates to Amendment 156, which the Minister moved on Monday. That Amendment 156 had wide Cross-Bench support, coming as it did after an amendment in the other place that was supported across parties and particularly by the Liberal Democrats. It gave the Government the responsibility and ability to issue statutory guidance on the fiduciary duty of trustees in relation to systemic issues, including climate change and many more.

In response to that, the Minister in the Commons said that the Government would bring forward plans to ensure that the guidance reflected the views of all within the sector and that it could be useful to trustees. All I have ever been interested in is bringing forward something that would help those involved with investment decisions for pensioners to be able to take into account with confidence the long-term systemic issues that they found. I am sure the Whip would not want me to repeat their arguments, which I am in danger of doing.

Following the vote on Amendment 156 on Monday, which I still do not understand, I am concerned about what the Government will now do. They are committed to this course of action and have taken a great deal of effort in setting up the technical working group and getting views from across the sector. It would be a real shame if that work were somehow to be halted by the procedural issues of how we get the legislative base to do this.

I should pay tribute here to the Minister and her officials, who moved at great pace and put a lot of effort into coming up with a solution that unfortunately was not accepted by the House on Monday. I would very much appreciate some understanding from the Minister, when she winds up, of how this issue will go forward. Because it was a government amendment, we do not have the opportunity of asking the Commons to think again; it is dead in this House. I would very much value an understanding that the need for this guidance has not gone away. As I understand it, the Government’s commitment to the guidance has not gone away, so it would be very interesting to know how we take the next steps.

Financial Services and Markets Bill

Debate between Baroness Hayman and Baroness Bowles of Berkhamsted

Report stage
Tuesday 13th June 2023 Lords Chamber

[Baroness Hayman (CB)]

My Lords, I support this amendment, which fits very well alongside the discussions we had on the fiduciary duty of pension fund trustees. I will not push those amendments to a vote, but the work being done, as the Minister described, on having a clear and close look at the fiduciary duty for pension fund trustees would complement this amendment. I do not think it is threatening in any way to pension fund trustees; it is very carefully framed and asks the Treasury to publish a review on incentivisation. It is perfectly possible, in the words of the noble Lord, Lord Naseby, to fine-tune it after the review—that is the purpose of the consultation.

This amendment is worth while. The noble Baroness, Lady Chapman, referred to the UK Infrastructure Bank and its recognition of nature-based projects and types of infrastructure as assets that could be invested in. I was involved in that amendment, on which the Minister, in her usual helpful style, listened and took action. I hope that she will similarly recognise the virtues of this proposed new clause and I support the amendment.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I added my name to this amendment and suggested the inclusion of the Pension Protection Fund, partly because there is already quite a big conversation around how we will incentivise investment and be prepared to take a bit more risk, because the UK seems to have become very risk-averse. There has been regulatory encouragement, if you like, for pension funds to be somewhat risk-averse; I am not sure it is actually risk- averse to end up in a situation where you invest everything in sovereign bonds and have a systemic risk but, setting that conversation aside, gilts have always been regarded as a very steady investment. It has perhaps been forgotten how to invest for reward.

The fiduciary duty is important and we need to look at it, because there are implications if you suggest in any way to trustees what they ought to do. Of course, that does not mean that you have to take zero risk as a trustee—you must understand the risk and reward dynamic—but, if we move through legislative steps, we would have to add to the list of consultees a whole load of lawyers to help sort out how we deal with the common-law fiduciary duty. Overall, this is a good amendment, making the Government part of this conversation and drawing in more consultation so that more people can input with common purpose, instead of there being lots of consultations all over the place.

Of course, there is work being done by parliamentary committees and I hope notice will be taken of those, and maybe care taken, looking at proposed new subsection (4)(b) and

“adjusting the terms of reference for DB Local Government Pension Schemes (LGPS) funds to consider regional development as an investment factor”.

To some extent they can do that already, especially in the amounts that are retained where the local authorities are investing directly rather than through the pooled funds—and I have to declare an interest here in potentially listing a fund.