Pension Schemes Bill

Debate between Lord Davies of Brixton and Lord Lucas

Report stage
Monday 16th March 2026 Lords Chamber

[Lord Lucas (Con)]

My Lords, it is a long time since I was managing big pension funds in the 1980s. In those days, we were in the happy position of considering it a bit underweight if you had less than half your money in British stocks; now, it is 5%. It is extraordinary for politicians to have done that to the economy—and it is because of us that it has dropped. The way we have framed our regulations and organised how pension funds are assessed has, over time, resulted in that extraordinary diminution. This has left us with a stock market that is cash negative and a City that is immensely weaker than it would be. We will address this later, but the solutions to that problem perhaps lie in this part of the Bill.

If we communicate better with pensioners and say to them, “Do you really trust the country you live in, are part of and benefit from so little that you want only 5% of your pension in it?”, I think we would get a positive response to the idea that perhaps that figure should be higher. Through the mechanisms in this part of the Bill, we could ask pension fund managers to respond to that, and I hope that we would be able then to get away from the bits in the Bill about compulsion and direction that are causing difficulty to my noble friends, whose concerns I share. I think we would get a good response if we informed members of pension funds, as my noble friend said, so that they could take good decisions, and then empowered them to say that they want to back their own, with a good chunk of their money going to improve, invest in and support this country and take it forward. This bit of the Bill would be a good place to do that.

I hope the Minister can confirm that, in the governance aspects of this, it will be expected that pension fund managers should vote their shares. It is extraordinary that we have moved to a position where the owners of companies just do not vote—they do not use that power to decide what their opinion is on what companies have been doing; they merely buy and sell. That is a huge diminution in the mechanism by which companies are held to account. We need people to vote and to take an interest. Having a direction on pension funds that they should participate and be a real part of the corporate governance process would be a useful thing to come out of this Bill.

[Lord Davies of Brixton (Lab)]

I have three points. First, I profoundly disagree with the noble Lord, Lord Lucas. To pin the blame just on politicians lets everyone else off scot-free. It is more like Murder on the Orient Express—everyone had a hand. My particular favourite is the accountants, who had a big hand; the way they defined accounting for pension costs was pernicious. Let us not blame just the politicians.

Secondly, one cannot not be in favour of value for money. Obviously, we are all in favour of people getting value for money from their pension schemes. However, I think the Government underestimate the difficulty of providing something useful. As the noble Baroness, Lady Altmann, pointed out, there are more than two or three factors to be taken into account. It is particularly difficult when one starts including prospective factors—how are these to be judged? It is very difficult, and it is not just the factors. The pension holders’ circumstances vary so widely. How can there be a simple, straightforward way of assessing whether someone has had value for money when their needs are so different from those of other people who are saving for their pension?

Thirdly, I apologise for not being present in the Chamber to support the amendment in the name of the noble Viscount, Lord Thurso, in the previous group. I realise I am cheating here, but I was elsewhere. I had not realised that one of the groups had disappeared; otherwise, I would have been here and supported his amendment.

House of Lords (Hereditary Peers) Bill

Debate between Lord Davies of Brixton and Lord Lucas

Report stage
Wednesday 2nd July 2025 Lords Chamber

[Lord Lucas (Con)]

My Lords, when considering the future of this House, one of the most important parts is what the relative proportions of the parties should be. The Government, when in opposition, quite rightly complained about our habit of adding Conservative Peers well beyond the point that would ordinarily have been considered acceptable.

If this House is to have a long-term future, we must get away from the idea that the Prime Minister can tip us over any day he wants just by appointing a lot of new Peers. We must have a degree of solidity in our independence. During all my time here, there has been a recognition that we should have a rough balance between the Government and the Opposition, with the Cross Benches holding the balance. As a concept, that has worked well, although it has been very hard to hold to it, given the actual appointments of Peers. I very much hope that this will be an area that the noble Baroness’s committee will cover. I beg to move.

[Lord Davies of Brixton (Lab)]

I appreciate that, at this late hour, there will be a keenness for everyone to go, but I want to remind the House of its history in opposing amendments such as that proposed by the noble Lord.

One has to remember that, without the right of the Prime Minister exercising the royal prerogative, we would not have had the Parliament Acts and, perhaps more importantly, we would not have had the Great Reform Act 1832. It was because of the royal prerogative and the ability of the Prime Minister to appoint Peers that we were able to move forward to our current democratic state.

I will quote from the debates that took place in this House—but of course not in this Chamber. Speaking from the Opposition Benches, the Earl of Winchilsea

“said, he suffered a pain of mind greater than he could express in thinking that he had lived to that hour to witness the downfall of his country. That night would close the first act of the fatal and bloody tragedy. It would close the existence of that House”—

the House of Lords—

“as one branch of the Legislature, for its independence, which was its brightest ornament, had fallen, and without that independence it might be considered as having ceased to exist”.—[Official Report, 4/6/1832; col. 349.]

Well, we still have the Earls of Winchilsea on the Opposition Benches forecasting total catastrophe from this move towards a more democratic House. Earl Grey, the Prime Minister—at a time when the Prime Minister was in this House—said in response that

“if the House of Commons should, after their Lordships rejecting, for a second time, a Bill sent up from that House, persist in asserting the opinion expressed by it with reference to that Bill, and that it should appear that in the event of an appeal to the country, it was not probable that another House of Commons would be chosen less zealous for Reform, then, in his mind, the emergency had arrived which would justify that exercise of the prerogative by which only a serious collision between the two Houses could be prevented”.—[Official Report, 4/6/1832; col. 362.]

I think the point persists almost 200 years later that the right of the Prime Minister to subject this House to the appointment of Peers is part of the process by which we achieve our present democratic freedoms, which I think would be a great loss to the country as a whole.

My promise, when I was appointed to this House by the leader of the Labour Party, was to vote for the abolition of this House, and I am still of that opinion—the sooner the better. Unfortunately, in making the promise I was not told exactly what should replace the House, but I am in favour of abolition and I think the power of the Prime Minister and the royal prerogative are important and certainly should not be lost, because we would end up with either a fully democratic House—which I oppose, because of its effect on the Commons—or this House, which is subject to democratic control through the Prime Minister.