Pension Schemes Bill

Debate between Lord Fuller and Baroness Neville-Rolfe

Committee stage
Monday 26th January 2026 Grand Committee

[Baroness Neville-Rolfe (Con)]

My Lords, I support Amendments 91 and 95 in the name of my noble friend Lady Noakes, to which I have added my name. I apologise for not being able to contribute to the Committee’s discussions on Thursday because of competing business on the Floor of the House. I have read Hansard and I should record that I share the reservations expressed about mandation, a subject on which I have received many well-argued requests and emails. I commend the arguments that have been well put by my noble friend Lord Younger of Leckie on the amendment from the noble Baroness, Lady Bowles. I particularly dislike powers delayed into the future. If the Government decide that they need to legislate later, they can bring in another Bill that the House can scrutinise in the light of contemporary evidence.

I turn to the amendments in this group, so well argued by my noble friend Lady Noakes. I am uneasy, as others are, about the overemphasis on creating size and scale in the Bill: £25 billion is a big fund and, as my noble friend Lady Altmann said, it does not seem to be well evidenced. It is a Labour trend that needs to be treated with some scepticism. We see it in local government reorganisation, in rail nationalisation and now in the proposals for the police. I know from my business experience, which noble Lords know I always come from, that mergers of any kind always have substantial costs and that you need smaller, pushy innovators to keep sectors competitive. This might be contentious, but Aldi was good for Tesco because it kept us on our toes—and even better for the consumer, the equivalent of the saver in this case. The point is that reorganisations of any kind always have costs and only sometimes have benefits.

We have seen the growth in recent years of money purchase funds that are almost entirely digital, and they have brought beneficial competition to the market. We risk eliminating the next generation of innovation, real value creation and indeed British unicorn funds, generated by competition, if we leave the Bill as it is.

We must not allow good performers to be snuffed out by the movement to bigger schemes. That is why we are asking the Minister to look at excluding master trusts and group pension plans that deliver good investment performance from the scale and size requirements. Performance is, after all, what matters to those saving for a pension. Size, scale and growth are not everything, popular though they tend to be with the fund managers who benefit. Returns matter more, but the Bill at present rather underplays them in favour of scale. My noble friend Lady Noakes’s amendments are just what is needed, and I look forward to hearing how the Minister is going to solve the problem that she has identified.

[Lord Fuller (Con)]

My Lords, I will speak to Amendment 99 in particular but I generally associate myself with all the amendments in this group, including Amendments 95 and 98 in the names of my noble friends.

As we have heard, there is no conclusive evidence that bigger is best when it comes to investment management. Of course there are some large funds that do rather well, but, as I explained on a previous day in Committee, within the Local Government Pension Scheme it is the smallest fund in the Orkneys that has outranked the performance of all the 88 other schemes in the LGPS, and there is something to be said for that. It has never changed its investment manager, and there is a lesson there.

In my experience, the best returns are to be made in investing in companies where you either buy the product or know the management—not so that you can tap them for inside information, of course, but because it hardly ever pays to invest in bad people. I also like to buy when prices fall because, let us face it, buying high and selling cheap is never a good investment strategy. But there is no evidence at all that scale in and of itself is good. There is plenty of evidence that it is worse. As they say, the larger they are the harder they fall, and small ones are more juicy.

Planning and Infrastructure Bill

Debate between Lord Fuller and Baroness Neville-Rolfe

Committee stage
Thursday 11th September 2025 Lords Chamber

[Lord Fuller (Con)]

My Lords, I strongly support my noble friend Lord Banner in this amendment about proportionality. My experience of this come from my membership of the CIL review, to which I was appointed by the Minister about 10 years ago to imagine a new approach to developer contributions. I do not have the report in front of me—it was a long time ago—but there was one statistic as part of my evidence-gathering process that remains with me today. Ninety percent of all planning applications are for 10 dwellings or less, but the 10% that are for 11 or more are well over half of the total number of houses that are planned to be built in this country. There is an asymmetry; the larger applications are significantly larger than the smaller ones, yet we treat everything the same.

If we are to encourage local builders who spend much time with the local vernacular, local contractors and local supply chains, we must have a more flexible and proportionate system. Proportionality exists in so many walks of life. Just to reflect for a moment on some of the Bills that we have been looking at in the last few months, there is proportionality for small businesses in employment legislation. The Minister and I debated in the Moses Room the other day the definition of a smaller authority, with a different audit test that would happen to those smaller authorities with a turnover of £15 million or less. In the brewing industry, the smaller brewers have an adventitious duty regime. Proportionality should not be alien; in fact, it should be something to be encouraged.

As part of the CIL review work, we looked at how we might help smaller builders and postulated that developments of less than 10 dwellings, as a threshold, would be exempted from Section 106; they would pay the CIL—the community infrastructure levy—instead. I thought that that would be a really proportionate way of doing it. People would make a meaningful contribution to the local infrastructure, but without getting tied up in knots on some of the smaller minutiae. That is an approach we could follow.

In local authorities, when someone applies for planning permission, there is a validation exercise. Unless you have submitted your ecology assessment, CIL form and everything else, the clock does not even start ticking. I would not want whole areas of legislation to be cast aside, and I am sure my noble friend agrees. I do not believe he is suggesting for one moment that there would be no ecology report; it is just that an ecology report for a set of five bungalows in a village on the outskirts of the development boundary should not be subject to the same test as a much more significant development.

That is important because it is significantly more expensive to deliver smaller schemes. There are certain fixed costs of applying for a planning application that have to be amortised—jam-spread, if you will—over a small number of developments. There is a diseconomy of scale. I did some fag-paper arithmetic and found that it is about £40,000 more per dwelling house when you take in some of the extra burdens of a smaller-scale development over a larger one. That is why we do not have affordable housing, a subject that detained us in our debate on the Bill on Tuesday night or Wednesday morning.

We need to drag out the simple truth that smaller schemes are more expensive and that affects viability, which is a significant challenge to getting Britain building. If only we could have this proportionate effect and make a virtue of it, we would give a bit more choice to the market, and with speedy delivery. It would increase the liquidity of the local supply chains in local economies, which would make us all richer and play a significant part in getting Britain building and the economy growing.

[Baroness Neville-Rolfe (Con)]

My Lords, as I have said on several occasions, we need to cut down on the bureaucracy of planning and the excessive application of policy on habitats. Even the Prime Minister has criticised the HS2 £100 million bat tunnel.

In my experience, we have an over-precautionary approach in planning, so I am attracted by the principle of proportionality, especially as it is promoted by a well-known planning KC, who has already contributed very positively to this Committee. My only question, either to him or to the Minister, is whether there is a risk of rising legal costs rather than the reverse, which I think is the intention behind the provision. Indeed, could this unintentionally hurt smaller builders?