Pension Schemes Bill

Callum Anderson Excerpts

2nd reading
Monday 7th July 2025 Commons Chamber

[Callum Anderson (Buckingham and Bletchley) (Lab)]

I am probably a parliamentary oddity, given that I have been looking forward hugely to rising to support the Bill—and what luck to follow such a colourful and interesting speech from the right hon. Member for North West Hampshire (Kit Malthouse).

I believe that this landmark piece of legislation, which builds on the progress made by the last Administration, has the potential to fundamentally reshape the trajectory of British capitalism by addressing one of the most important long-term challenges facing our country, namely how we can unlock and unleash the full potential of British savings to support growth and prosperity here at home. It is a challenge that we must overcome if we are to tackle a number of deep-rooted structural weaknesses in our economy: low productivity, low business investment and regional inequalities, as well as the financial insecurity that pervades the lives of too many of our older citizens, especially those who do not own their homes.

Before I go any further, I must pay tribute to my hon. Friend the Minister—the Bill bears the hallmarks of his serious and determined leadership—and also commend my hon. Friend the Member for Tamworth (Sarah Edwards) for her very interesting speech.

The Bill seeks to address the lack of alignment between our nation’s vast pool of domestic savings and the long-term investment needs of our economy. Over recent decades, that growing misalignment has become all too evident in communities across the United Kingdom. During that time, our domestic pension funds, which now amount to about £.3 trillion, have steadily retreated from investment in the UK, although the trend has not been replicated in other comparable developed economies. Despite taxpayer support amounting to more than £60 billion a year—or £70 billion, according to the right hon. Member for Salisbury (John Glen)—too little capital is finding its way into British companies, infrastructure and innovation.

Data from the Capital Markets Industry Taskforce—I must disclose the fact that I once worked for one of its member firms before entering this place—lays bare the scale of the problem. The data focuses primarily on public equity markets, but when we look at the largest pension schemes and funds in other countries and compare the size of their total equity allocations relative to their domestic equity markets, we see that Canada’s pensions are 2.5 times overweighting their home market, while France’s are nine times overweight, Italy’s 10 times overweight, Australia’s 27 times overweight, and South Korea’s are 30 times overweight. The UK is, massively, an international anomaly. Our domestic pension funds are underweighting our equity market by about 40%. That, I think, represents a structural weakness, with direct consequences for the global competitiveness of our economy, the vitality of our industries and, ultimately, our national economic resilience. If we are unwilling to invest in ourselves, we hold back our growth prospects.

The UK has long needed catalysts for a modern economic renaissance. The Government have taken important first steps through their industrial and infrastructure strategies, the artificial intelligence opportunities action plan and the reforms of our planning system, but the common ingredient that is required to ensure their success is a reliable source of long-term capital. Even a modest rebalancing of that £3 trillion could unlock billions in investment for domestic growth. In real currency that our constituents can understand, that means investment in digital, physical and social infrastructure, and it means greater opportunities for entrepreneurs to not only start up businesses but scale them into something globally consequential, providing better jobs and higher incomes for families throughout the country.

These investments are not just good for local economies. If we get the broader fundamentals right, they can also deliver stronger returns for tomorrow’s growing cohort of retirees, so the Government are right to propose tackling fragmentation across the UK pensions system. In particular, the private defined-contribution market and the local government pension scheme remain too fragmented. I must gently disagree with the right hon. Member for North West Hampshire: I think that there are too many small, sub-scale schemes that have not only driven up costs and created market inefficiencies, but resulted overall in suboptimal investment outcomes. I think that larger funds can manage risk better, and can invest in opportunities that can deliver higher returns for savers.

[Kit Malthouse]

I do not dispute the fact that there are too many small funds that are suboptimal; my question is whether it should be the Government who correct that. If, for example, I am a member of a small suboptimal pension fund and the Government, through the Bill, consolidate it with another pension fund, and it turns out that this reduces my return, who carries the can?

[Callum Anderson]

As I have said, I think that larger funds can manage risk better and deliver better outcomes for savers, which means that they can take greater ownership of how they spend their retirement years. I also think that the £25 billion threshold for megafunds in the defined-contribution market is the right level to deliver the objective. Other jurisdictions, especially Australia, Canada, and the Netherlands, have demonstrated that scale drives better governance, lower fees and stronger returns.

I welcome consolidation and the path towards the professionalisation of the local government pension scheme. I disclose that before I entered this place, I chaired a local authority pension fund, so I know at first hand the potential of pooling, and share many experiences of pension fund meetings with the shadow Minister. I fully acknowledge that there will be resistance to pooling in some quarters.

[Matt Rodda]

My hon. Friend is making an excellent speech. Does he agree that there is a growing consensus in the pensions industry? Indeed, some of the trade bodies have been heavily involved in promoting the idea of consolidation for some time, and perhaps what he is describing is a growing body of opinion in the pensions industry.

[Callum Anderson]

My hon. Friend is absolutely right. Stakeholders and firms that I have spoken to—in the local government pension sector, the private sector and the City of London—are unanimous that scale is very much an economic imperative. Have the Government considered what role fiscal incentives can play in helping to accelerate the consolidation of private DC funds, and whether there is scope to reduce the number of LGPS pools in the year ahead?

I particularly welcome the Bill’s proposal for a comprehensive value-for-money framework to guide DC consolidation, which my hon. Friend the Member for Tamworth (Sarah Edwards) mentioned. This correctly tackles head-on the trustee cost mindset, which too often prioritises the cheapest over the most appropriate asset allocation. That approach has frequently been tried and tested, and it delivers poorer returns for savers and missed opportunities for the wider economy, so I very much hope that DC consolidation can be implemented as soon as possible.

Finally, I want to address the issue of mandation, which, to be honest, probably warrants a debate all by itself. I appreciate the concerns that have been raised by Members from across the House, and by people in the investment industry. My hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier) referred to the parliamentary fund, and I note non-facetiously that the parliamentary fund, of which we are all ultimately beneficiaries, allocates barely 1% of its assets to UK companies.

[Alex Brewer (North East Hampshire) (LD)]

In Hampshire, we have a super-ageing population, so pension and post-retirement financial concerns are frequently raised in my North East Hampshire constituency casework. One of my constituents wrote to me to say:

“I want my pension to be put to work delivering sustainable, long-term growth and prosperity that allows every community in the UK to thrive.”

This Bill should require full transparency from pension schemes to empower people to support sustainable, long-term growth in their communities. Does the hon. Member agree that requiring transparency would be the most effective way of incentivising investment?

[Callum Anderson]

In all aspects of our financial system and our financial markets, and when it comes to either public activities or private markets, transparency is very much the best way to derive the most effective outcomes for those who benefit from pension schemes.

Initiatives such as the Mansion House accord, which has been referred to a number of times in this debate, have been welcome steps. When it comes to asset allocation, private sector leadership should always be preferable where possible, but we need to be candid about the fact that the challenge we face in the UK is stark and immediate. I now consider it necessary for the Government to signal to the markets that they will not ignore the reality that allocations by UK institutions to UK assets have fallen sharply over my lifetime, and certainly over the last 40 or 50 years, and that they are prepared to exercise a degree of agency, if required.

Ideally, any reserve power will not be required. If the Government succeed with their broader economic strategy, there will be a wealth of investable opportunities that will attract capital without the need for compulsion. Although the Government will need to exercise any reserve power in the most judicious and careful way, and in close consultation with the industry, we simply cannot stand by and allow our domestic markets to be hollowed out. I understand that not everyone is in favour of the state intervening in markets, and I am sure that the Minister, who worked at the Treasury, will remember that not everyone in the City wanted the Government to step in and rescue Lloyds Banking Group or the Royal Bank of Scotland, but sometimes the Government have to act decisively in the country’s long-term economic interests.

The Bill is a welcome and necessary step towards answering the question of how we inject greater confidence into our companies, our markets and our economy, while also providing people with a safe and secure retirement. That is why I am pleased to support it tonight.

Oral Answers to Questions

Callum Anderson Excerpts

Monday 23rd June 2025 Commons Chamber

[Liz Kendall]

I know the brilliant work that the RNIB does and the brilliant sight services locally in Leicester—I have visited them myself. I would say to the hon. Gentleman that nine out of 10 people who are claiming PIP when these changes come into place will be unaffected by them. We are going to see 750,000 more people claiming PIP by the end of this Parliament compared with when we are elected, and, even with these changes, spending will still be £8 billion higher.

[Callum Anderson (Buckingham and Bletchley) (Lab)]

T1. If she will make a statement on her departmental responsibilities.

[The Secretary of State for Work and Pensions (Liz Kendall)]

I am proud of the steps this Labour Government are taking to tackle child poverty. Our historic expansion of free school meals to families on universal credit will lift 100,000 children out of poverty and tackle term-time hunger. That is alongside the £2.5 billion we are investing in the household support fund, and our commitment to funding the holiday activities and food programme, which will tackle holiday hunger too. Making sure that children have hungry minds, not hungry bellies, will help them to fulfil their potential in life, and that is what this Labour Government are all about.

[Callum Anderson]

Closing the disability employment gap is a matter of opportunity for disabled people in my constituency. I recently visited M&M Supplies, a stand-out company in Bletchley, not only for its many exporting successes but because a quarter of its workforce are adults with learning disabilities and difficulties—and that is thanks mainly to the vision of managing director Frank Purcell, who works with organisations like MK SNAP to run a work experience programme for adults with disabilities. What assurances can my right hon. Friend give me that this Government are committed to working with employers to ensure that no disabled people in my constituency are written off?

Mansion House Accord

Callum Anderson Excerpts

Tuesday 13th May 2025 Commons Chamber

[Torsten Bell]

We have discussed some of these issues in the past, and I look forward to the conversations that I am sure we will have in future, not least around the pension schemes Bill. It is true that for many in the industry, buy-out of their defined-benefit scheme is the end point they are looking to reach, and the number that can reach that point has risen significantly in the recent past as more schemes have moved into surplus. Our job is to provide a range of options for those DB schemes. We have discussed the superfund regime that we will bring forward regulations on through the pension schemes Bill. We have also talked in the last few months about the role of surplus release, which can benefit both employers who want to make investments but also scheme members. The hon. Gentleman is right to highlight that there are a range of options available to schemes, and they can take the one that is in the best interests of their members.

[Callum Anderson (Buckingham and Bletchley) (Lab)]

The Mansion House accord is clearly a welcome step in aligning the UK’s pool of domestic pension capital with long-term growth, greater economic sovereignty and financial security in retirement. For this to succeed, we need greater clarity in who is stepping up, so can the Minister update the House on what discussions he is having with the industry about how firms intend to report progress under the accord in a clear and transparent way?

[Torsten Bell]

My hon. Friend is completely right, but I would use a slightly more optimistic tone. It is now the settled consensus of the entire defined-contribution industry that this is the direction we need to move in. Almost every single scheme is moving to thinking about how they will invest in a wider range of private assets. Many of them are looking to go further than the benchmark set out in the accord today. They want to do that because it is in their savers’ interests. It diversifies their assets and, over the longer term, leads to higher returns on average. The exact amount of those returns will obviously depend, but studies show that it ranges from 2% to 12% higher returns. It is absolutely in savers’ interests, and I think there is a broad consensus about doing that.

My hon. Friend is also right to say that we need to make sure that change happens. We will come forward in the pension schemes Bill with more details about how these developments will be monitored to make sure that change is delivered, because in the end, what the British people want to see is less talking about this and more actual investment.

Oral Answers to Questions

Callum Anderson Excerpts

Monday 12th May 2025 Commons Chamber

[Torsten Bell]

Less than 1% of savers actively opt out of saving each month, but the hon. Gentleman is completely right to say that we need to remain vigilant and ensure that opt-out rates do not rise in the years ahead. There was some more volatility in opt-out rates during the pandemic, for reasons that I am sure he will understand, but, as I say, we have been seeing those come down recently. I am happy to keep talking to him about that in the years ahead.

[Callum Anderson (Buckingham and Bletchley) (Lab)]

If we want young people, including those in my constituency, to believe in the value of long-term investing, they need to see that their pensions are helping to build the country that they live in and are not just distant markets. Will the Minister set out what steps he is taking to ensure that the Government’s pensions reforms encourage funds to invest more in UK infrastructure and hybrid companies?

Income Tax (Charge)

Callum Anderson Excerpts

Monday 4th November 2024 Commons Chamber

[Callum Anderson (Buckingham and Bletchley) (Lab)]

I must say that I am not quite sure how I can follow that. I congratulate my hon. Friends the Members for Huddersfield (Harpreet Uppal), for North Somerset (Sadik Al-Hassan) and for Wrexham (Andrew Ranger) on their excellent maiden speeches.

I am pleased to add my support to the Budget that my right hon. Friend the Chancellor put forward last week. It provides a fresh start for our families in the towns, villages and cities that comprise the constituency of Buckingham and Bletchley. Given this Labour Government’s dire economic inheritance, the Budget has done a great job not only of addressing the immediate challenges that my constituents face, but more importantly of laying the foundations for a resilient economy that will spread opportunity and deliver the down payment that we need on the Government’s ambition to tackle child poverty.

To understand why this Budget is so crucial, we need to take a moment to recognise the scale of the economic and social challenge that we face. Since the financial crisis, the UK’s productivity has grown at just 0.7% per year—a sharp drop from the 2.1% annual growth rate that we saw in the 14 years beforehand. While other advanced economies have experienced a similar slowdown, the UK has been hit particularly hard, not least as a result of the previous Government’s shying away from taking the proper long-term decisions for our economy. This has led to the UK’s productivity being 28% lower than that of the United States and far lower than that of our European competitors such as France and Germany.

For many working people across the country and in my constituency, the consequences are stark, with a loss of almost £11,000 a year in potential wages over the past 15 years. Members across the House will have seen how that has manifested itself in rising child poverty and in the routine use of food banks, which my right hon. Friend the Secretary of State for Work and Pensions mentioned. That is why measures such as the fair repayment rate and the extension of the household support fund are so vital, as they provide the lifeline that families in my constituency and across the country so desperately need.

Another key issue correctly identified by the Chancellor is the low level of public and private investment in the UK compared with our peers. For almost my entire lifetime, the UK has been a laggard in that area—we have been at the bottom of the G7 rankings for public and private investment for 24 of the past 30 years. I am pleased that this Budget represents a vital first step in correcting course, with a credible package of investment in infrastructure, schools and hospitals. That includes East West Rail in my constituency, and my constituents in Bletchley and Winslow are looking forward to the opportunities from that. I am pleased to support this Budget. It gives working people and their families a hand up, builds strong foundations and ensures that our economy will be competitive in the long run.

International Investment Summit

Callum Anderson Excerpts

Thursday 17th October 2024 Commons Chamber

[Callum Anderson (Buckingham and Bletchley) (Lab)]

It is with deep humility that I rise for the first time in this House as the Member of Parliament for the new Buckingham and Bletchley constituency, and I am pleased to contribute to this debate. I congratulate my hon. Friends the Members for Ossett and Denby Dale (Jade Botterill) and for Congleton (Mrs Russell) on their excellent speeches. Their constituents are fortunate to have such formidable representatives.

I should of course begin my remarks by paying tribute to my two direct predecessors. In Iain Stewart, this Chamber had a calm, measured advocate for the former Milton Keynes South constituency who, among other things, consistently championed better transport connections for the city and the United Kingdom more broadly. I also thank the now hon. Member for Mid Buckinghamshire (Greg Smith), whose kindness and generosity I have valued as I have navigated these early months in Westminster. They followed in the footsteps of John Bercow, who served as the Member for Buckingham for 22 years, and Dr Phyllis Starkey, who served as the last Labour Member of Parliament for Bletchley, as part of Milton Keynes South, for 13 years. They all exemplify what it means to be a dedicated public servant, and I will do my utmost to meet their standard.

Although Buckingham and Bletchley is a new constituency for this Parliament, it is in fact a reunion of old friends. For nearly a century, those communities were connected as one, but in 1983, Milton Keynes, along with Bletchley, had the temerity to split away and flourish into the formidable modern city that it is today.

Although the towns of Buckingham, Bletchley and Winslow are different in character, all have deep-rooted, rich histories. And between those towns lie many villages, breathing life into the heart of our constituency. Be it Westbury, Quainton, Stewkley or Nash—I could go on—all contribute to the fabric of our collective identity, and I must never forget Tattenhoe in Milton Keynes. Although each community is unique, they share common values: a deep sense of civic pride, patriotism and a belief that opportunity should be available to everyone if they work hard. I pledge to serve each of them with the same level of diligence, be they urban or rural and regardless of their size or affluence.

One of the great privileges of representing Bletchley is that I carry the legacy of Bletchley Park and the remarkable codebreakers who worked there in the 1940s. The ingenuity and tireless efforts of those brave women and men—including Alan Turing, a very British hero—who together uncovered key strategic military plans of the Nazis, not only shortened the second world war and saved countless lives, but laid the foundation of today’s technological age. That is why Bletchley Park remains an iconic institution of national and global significance, and why it was such a fitting host for the AI summit last year.

That legacy of technology and creative thinking remains at Bletchley’s core today. As we speak, the South Central Institute of Technology is inspiring the next generation, providing young people with the skills to thrive in the digital age. The expertise does not end there: the University of Buckingham is innovating in higher education, enabling students to pursue accelerated degrees and equipping them with the agility and knowledge to navigate an ever-changing world.

Just as Bletchley and Buckingham lead in education, Silverstone—of which the southern half of the track is located in my constituency—leads on the world stage for motorsport. It convenes the best drivers, including our very own Sir Lewis Hamilton and Lando Norris, alongside cutting-edge engineers, technologists and designers. Silverstone is where the pinnacle of innovation meets the thrill of competition, and inward international investment has been pivotal to achieving that status. From Formula 1 teams to global technology giants, international investors are choosing Britain because they see a country where creativity, innovation and entrepreneurship can flourish.

But the value of international investment is not just financial; it is also a vote of confidence in us—in our workforce, our infrastructure and our unique creative spirit. It strengthens our relationships with key global players, ensuring that we continue to be the country that others seek out for collaboration, whether in emerging fields such as artificial intelligence or established ones such as financial services and advanced manufacturing. That is why this Government’s achievement in securing the commitment of £63 billion of private investment, 10% of which will help turbocharge Britain’s AI capacity, is so important. I congratulate my right hon. and hon. Friends across Government on their hard work to secure that historic investment.

But, Madam Deputy Speaker, the Buckingham and Bletchley constituency offers so much more. Farmers and rural businesses across north Buckinghamshire work tirelessly to feed our nation, using the latest methods to produce high-quality food while safeguarding our local environment, as I saw at first hand when I met the Edgcott and Winslow Young Farmers earlier this summer. I am committed to being their advocate in the House, ensuring that they receive the support and recognition that they deserve.

If the House will indulge me for a few more moments, I want to close my maiden speech by thanking the people who believed in me and supported me on my journey to this place. First and foremost, I owe an unpayable debt to my mother, who brought me up alone in a council flat and sacrificed everything to help her son reach heights that neither of us could have dreamed of 33 years ago—be that the City of London or the home of our democracy—and whose simple values of hard work and quiet perseverance taught me that everyone has value and deserves respect. Her example has been a guiding light to me, and for that I will be forever grateful. There are so many others to whom I also owe so much, be they family members, my partner of 10 years, or my friends of 15, 20 and 30 years—all of which I mention to warn my constituents that I generally invest only in the most long-term of relationships.

It is on that note that I wish to address the young people in the towns, villages and city that comprise the Buckingham and Bletchley constituency: regardless of who your parents are, where you come from or what you look like, never stop believing that if you work hard, anything in Britain is possible. Every moment I am granted in this place will be spent working towards ensuring that you have the power to write your own life story and live the life that you have imagined for yourself on these islands of ours. That is the Britain I believe in, and the one I will be fighting for.

[Madam Deputy Speaker (Judith Cummins)]

I call Sean Woodcock to make his maiden speech.