Pension Schemes Bill

Debate between Caroline Nokes and Andrew Western

Consideration of Lords message
Monday 27th April 2026 Commons Chamber

[Andrew Western]

The hon. Gentleman will be aware that conversations are always ongoing to ensure that any legislation that comes from this place can be adopted by all the nations of this great country. I hope that some of the concerns that have continued to be raised by his colleagues, and by peers in the Lords as well, will be addressed by some of the detail that I am about to set out.

As I have said, that power can be used only once, and, if unused, lapses entirely in 2032. Even if it is used, however, the entire asset allocation regime falls out of effect and the statute book at the end of 2035. These provisions rule out any of the more lurid uses we have heard it claimed that the power would be used for, restricting it narrowly to underpinning the Mansion House accord.

As well as insisting on that package, the Government are today introducing further amendments to the savers’ interest test in the proposed new section 28G of the Bill. I remind the House that the reserve power exists because providers have said that they struggle to do something that is in savers’ interests, namely invest in a wider range of assets. However, the savers’ interest test exists for circumstances in which schemes can show that even investing as little as 10% in private assets—far below the levels that we see internationally, or in open defined benefit schemes here in the UK—might not be in their particular savers’ interest. In those circumstances, it allows them a route to seek an exemption from any requirements imposed by the reserve power. Arguments have been made, here and in the other place, about whether the test as drafted included sufficiently clear and strong protections. The Government have reflected on those arguments, and the further amendments before the House today respond to them. There are four changes.

First, we are lowering the threshold for an exemption. The Bill as drafted would have allowed regulations to require a scheme to show that compliance “would cause” material financial detriment. We are changing that to

“would be likely to cause”.

A scheme will need to show that detriment is the probable consequence, not a certain one.

Secondly, the Bill now makes it explicit that when a scheme meets the threshold, the regulator must grant the exemption. That has always been the Government’s intention, and the amendment ensures that there is no room for doubt.

Thirdly—here I want to respond directly to arguments raised by noble Lords about the weight that should be given to the judgment of trustees and scheme managers—we are proposing a change to put their assessment of savers’ interests centre stage. The new text makes clear that the responsible regulator must not only receive the scheme’s own assessment of why compliance would be likely to cause material financial detriment, but be required to have due regard to it. Schemes must set out their reasoning, and the regulator must engage with it properly and thoroughly. “Due regard” is established statutory language with legal weight: it means that the regulator cannot simply pay little or no attention to the scheme’s analysis.

Fourthly, the regulator must give reasons when it refuses an application. That matters because schemes have a right of appeal to the upper tribunal, a right that is strengthened if applicants know why they were turned down.

Let me draw this together. The savers’ interest test now provides a lower threshold, an explicit guarantee that exemptions will be granted when the test is met, a requirement for the regulator to give proper weight to the scheme’s own analysis, and transparency and accountability if an application should fail. Taken alongside the constraints on the power itself—the percentage caps, the single-use restriction, the 2032 sunset and the 2035 full repeal—this is a framework of strong and explicit protections.

There are those, here and in the other place, who would prefer the reserve power not to exist at all. As Members of this House know, we respect that position, but it is not a position that we share and it is not the position of the Government. There is a well-evidenced collective action problem in the defined contribution market, and the consequences of leaving it unresolved would fall on pension savers. That is not a risk that the Government are prepared to take.

This House has made its view clear on two occasions, and the Government have responded by baking in a raft of additional safeguards to primary legislation. This is now a third round of material changes, which I suspect this House may again endorse with a decisive majority. At some point, the question before the House is no longer the detail of the amendments, but whether the other place should continue to reject the clearly expressed view of the elected House and delay the passage of a Bill that delivers for savers in a whole host of ways. I urge the House to send these amendments back to the other place, and to bring these exchanges to a close.

[Madam Deputy Speaker]

I call the shadow Secretary of State.

Welfare Spending

Debate between Caroline Nokes and Andrew Western

Tuesday 15th July 2025 Commons Chamber

[Madam Deputy Speaker (Caroline Nokes)]

Order. The right hon. Gentleman will know that that is not a matter for the Chair, and he is seeking to drag me into the debate.

[Andrew Western]

It is also not what I said, Madam Deputy Speaker. I said that we on our child poverty taskforce are considering all available levers in the lead-up to the child poverty strategy, which will come in the autumn.

The Opposition spokesperson, the hon. Member for East Wiltshire (Danny Kruger), made a point about controlling welfare spend. Yet again, we heard that the four years post-covid were not an appropriate time to tackle the spiralling welfare bill that the Conservatives created. In those four long years, the Conservative party got through three Prime Ministers, five Ministers for health and work, six Secretaries of State for Education and seven Sunak resets, yet the welfare bill continued to spiral. Child poverty worsened, and we had wasted years, so we will take no lectures from the Conservatives on welfare spend, and certainly not on the best way to tackle child poverty.



This party inherited the Conservatives’ shameful legacy of disastrous levels of child poverty and a broken social security system that fails to command people’s trust. Across Government, we have started the urgent work to fix these problems and to drive down child poverty once again, as the last Labour Government did, in partnership with the devolved Administrations, charities, local authorities and others, and to build a fairer, more sustainable social security system that helps people build better lives by giving them the right incentives and support. We will do that important work because tackling child poverty is a moral mission for this Government, and we will oppose this motion today because all levers are under active consideration as we seek to do so.

[Madam Deputy Speaker (Caroline Nokes)]

Before I put the Question, I will just remind the Minister that, like the shadow Minister, he should not be referring to Members by their name in the Chamber but by their constituency.

Question put.