Pension Schemes Bill

Debate between Viscount Thurso and Viscount Younger of Leckie

Report stage
Monday 23rd March 2026 Lords Chamber

[Viscount Thurso (LD)]

My Lords, very briefly, I will support our Front Bench and the noble Baroness, Lady Neville-Rolfe, because it is quite a wise thing to have an inquiry. I wholly reject the argument the noble Lord, Lord Moynihan, just made: his maths is suspect and his conclusions are wrong. I have a son who is a special constable—until very recently he was a constable—a daughter-in-law who is a constable and another son who is a primary school teacher. As I said to him then, I say now: tell it to them that their pensions are not part of their remuneration, and I say you will be looking for teachers, policemen and nurses until kingdom come.

[Viscount Younger of Leckie (Con)]

My Lords, I begin by welcoming the amendment in the name of my noble friend Lady Neville-Rolfe, because it addresses a matter of real and enduring importance: the long-term affordability, intergenerational fairness, fiscal sustainability and accounting treatment of public service pension schemes. We heard a powerful speech from her in Committee and another from my noble friend Lord Moynihan, and they gave two further powerful speeches just now.

Fundamentally, this amendment asks the Government to examine how very large sums of public money are being managed, how liabilities are being accounted for, and what this means for the sustainability of public spending over the long term. These schemes represent a significant and growing commitment, and it is entirely right that Parliament should have a clear and transparent understanding of their implications, both for today’s taxpayers and for future generations.

The figures seem to be stark, as set out by the movers of the amendment, and some strong arguments have been put, backed up by evidence, but I very much noted the remarks from the noble Viscount, Lord Thurso, and perhaps some further debate and discussion should go on about the veracity of the figures after this debate.

Indeed, when the Government are choosing to place additional burdens on private pension saving through measures such as the national insurance changes and restrictions on salary sacrifice, in part to sustain these very substantial public sector commitments, the question of balance, fairness and sustainability becomes more and more pressing. For these reasons, we strongly support my noble friend’s amendment and we will support her should she seek to divide the House on it when it is called.

The other amendments in this group, including those in our names, seek to address two further fundamental issues: first, the question of pensions adequacy, ensuring that reforms are judged by their real-world impact on the retirement incomes of individuals, and, secondly, the question of why pension funds are not investing more in the United Kingdom. This is a critical issue, which was covered in Committee, not least by the noble Lord, Lord Vaux. If the Government wish to see greater domestic investment, the answer surely is not to reach instinctively for the levers of mandation but to understand and to address the underlying barriers, whether regulatory, tax-related or rooted in fiduciary duties. This point was made when we discussed the issue only last week, after which, I am glad to say, we voted to remove this dangerous power from the Bill. The point was repeated today by the noble Lord, Lord Lucas.

This is essential work that needs to be done. The Government are planning to intervene in the system without first properly understanding why it is behaving as it is. There is a risk that they are seeking to correct the symptoms of a problem that they have not even diagnosed, rather than addressing its causes. We have been clear from the beginning that the Government must not mandate investment, but we have also been clear that we should understand why we are not seeing the investment we need in our country. Our amendment allows the Government to do that work and then take the responsible and necessary steps to start promoting investment in a responsible way.

I close by speaking to Amendment 170A in my name and that of my noble friend Lady Stedman-Scott. I am grateful to the noble Lord, Lord Lucas, for his work on this amendment, as well as grateful for the—perhaps unusual—support from the noble Lord, Lord Davies of Brixton, for having a review, which is our wish, on member engagement on rights in pension schemes. Amendment 170A raises a fundamental question of agency: namely, the extent to which members of pension schemes are able to influence the governance and decision-making of the schemes to which they belong. We believe this is an important issue, and it invites the Government to reflect on whether pensions savers truly have a meaningful voice in shaping their financial futures. It is right that we consider not only the existence of engagement mechanisms but whether they operate effectively in practice, particularly in relation to investment decisions and scheme governance. I will therefore listen very carefully to the Minister’s response on these points.