Pension Schemes Bill

Debate between Debbie Abrahams and Meg Hillier

2nd reading
Monday 7th July 2025 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I want to make three points. First, we recognise that defined-contribution pension schemes have around £500 billion in assets under management. Around 20% of these assets are invested in the UK. That is down from 50% some 10 years ago. It is very welcome that the Government are focusing on this, so that we can ensure that these assets contribute to our growth.

The Committee received evidence in May from the Finance Innovation Lab, which told us that the UK has had the lowest level of business investment in the G7 for 24 of the last 30 years. The fundamental driver behind that is the fact that the financial system, including pension funds, does not support business investment as much as it should. That again emphasises the point that the Bill is very welcome. It should help us deal with that, particularly as it requires multi-employer DC schemes to have £25 billion in assets under management by 2030. That will give more schemes the advantage of economies of scale.

In a very welcome step, in the May 2025 Mansion House accord—I pay tribute to the Chancellor and her team for achieving this—there was a pledge from the 17 schemes that were part of that accord to invest 10% of their portfolios in assets that will boost the economy by 2030, with at least 5% of these portfolios being ring-fenced for the UK. This is expected to release £25 billion to the UK economy by 2030. None the less, the Bill includes a reserve power that the Government could use to mandate DC schemes to invest more in the UK economy. In evidence on 14 July, the Committee heard concerns that that would interfere with the fiduciary duty of trustees to prioritise investments that they judge will bring the best returns for scheme members.

In May, Yvonne Braun of the ABI told the Committee that it does not think the mandation is “desirable”. Instead, she said that the aim should be for it to be

“a rational choice—that the UK is an attractive environment for investing”.

The pensions industry wants the Government to concentrate on enabling the development of suitable assets for schemes to invest in, for example by improving the planning process and making the regulatory environment more predictable.

Rachel Croft, of the Association of Professional Pension Trustees, said:

“Forcing us to invest solely in the UK may run counter to that primary duty and focus, unless there is a pipeline of suitable investments in a format suitable for pension schemes to invest in. If that is the case, we will invest in them; if not, our primary duty will make us look elsewhere.”

Chris Curry, of the Pensions Policy Institute, thought that it was possible to create more UK investment opportunities and benefit members. He said:

“It still has to work in the interest of members—that is important—but if we are removing the barriers and making it easier to invest, and at the same time, providing more of a pipeline for investment and trying to package it so that it works well with how the pension system can operate, you are creating opportunity.”

He described mandation as “blunt” and “inflexible”, and said that it would be difficult to design a scheme that worked effectively in practice and did not give rise to unintended consequences. For example, he said that there would be a challenge in defining what counts as a UK investment. If the Government decided to mandate that schemes invested a particular percentage in the UK, how would the system respond to market movements that might temporarily reduce the percentage below that level? He wanted the Government to consider the unintended consequences of that. The liability-driven episode in September 2022 showed the potential risk of a lot of pension schemes effectively being asked to do the same thing at the same time.

The Bill includes a sunset clause preventing the use of the mandation power beyond 2035. Pensions UK wants to see that timeframe reduce, saying it should be just for the lifetime of the Parliament. It also wants to see the scope limited, so the investment mandation cannot be prescribed beyond the allocations voluntarily committed to in the Mansion House accord, in other words the 10% of default funds into private markets, of which 5% are in UK-based assets.

On fiduciary duties, Jesse Griffiths of the Finance Innovation Lab said that

“while the fiduciary duty should be paramount for the schemes, the Government has a different and broader mandate, and it needs to look at the collective interests of all pension savers as a whole…In particular, when you think about the deep inequality that is embedded in the system, the ONS estimates that the bottom half of the population holds just 1% of all pension assets and the top 10% holds almost two thirds. If you just focus on growing the financial returns, most people will not benefit from that. I would argue that a system that also supports a stronger economy and the green transition would benefit most people more than a system that is focused on higher returns.”

Will the Minister help us to understand the context for the criteria in which mandation powers might be used? What will be the success criteria, other than the 5% investment from this approach? Should the sunset clause, to prevent the use of this mandation power beyond 2035, be brought forward to the end of this Parliament, as I mentioned? Do the Government guarantee that mandations should go no further than the aims of the Mansion House accord?

[Dame Meg Hillier]

I share some of my hon. Friend’s concerns about mandation. I am happy that the Minister seems to be listening, and I hope that we will get some answers. I am interested in my hon. Friend’s thoughts about pulling forward the sunset clause. If these changes take place, they will have to happen over a long period of time, as trustees cannot just flip in and out of investments. She has set out the views of her witnesses, but does she have any views on pulling that date forward from 2035? I can see there are arguments both ways, but I am concerned that that might push trustees to make bad decisions.

[Debbie Abrahams]

I understand what my hon. Friend says. There is always a balance to be found with long-term financial decisions, but this is partly a political decision, so I point to the Pensions Minister to come up with a response.

Do the Government propose to consult on the design of the mandation power and how to mitigate against unintended consequences? Do the Government think that there is a case for changing the law on fiduciary duty to make clear that trustees can take account of wider issues, such as the impact of pension scheme investments on the economy and the environment? What would be the pros and cons of doing that?

Briefly, I would like to touch on the LGPS. I slightly disagree with some of the shadow Pensions Minister’s points. Since 2015, the 86 funds have been formed into eight groups. If the Pensions Minister is proposing to reduce that still further, will he set out the reasons behind that? What is the problem that merging them even further is trying to fix? Will he let me know about that in his closing remarks?

Finally, I would like to touch on the pre-1997 indexation, as the Pensions Minister knew that I would. At the end of March 2024, the Pension Protection Fund had a surplus of £13.2 billion. The PPF has taken steps to reduce the levy from £620 million in 2020 to £100 million in 2025. However, under current rules, if it made the decision to reduce the levy to zero, it would then be unable to increase it again. The 2022 departmental review by the Department for Work and Pensions recommended that the PPF and the DWP work together to introduce changes to the levy, so that the PPF would have more flexibility in reducing and increasing the levy level.

There is another issue, which the Pensions Minister will know about. PPF and financial assistance scheme members, particularly those in their later years, are really struggling. I came across a piece—I think it was in The Daily Telegraph—that said that one of the key supporters of the Pension Action Group and a FAS member, Jacquie Humphrey died a few days ago, just 11 weeks after the death of her husband. They were both employed by Dexion, which folded, and, like hundreds of others, refused to leave it there. Is there any comfort that we can provide? I understand and recognise what the Minister says about the PPF surplus being on the public sector’s balance sheet, but given that these people, who are in their 70s and 80s, are unable to live in dignity, what can we do to provide that for them in their later years?

Children and Families Bill

Debate between Debbie Abrahams and Meg Hillier

Monday 25th February 2013 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I recognise what the Minister is trying to do in seeking to reform important areas of law affecting children, young people and their families. New as I am, however, I am beginning to learn that the devil is in the detail when it comes to many of this Government’s Bills. I am not alone in that view. The Children’s Commissioner for England, Maggie Atkinson, said that she supported

“the objectives of the Children and Families Bill”,

but was

“concerned about some of the detail. Some measures proposed could be interpreted as overriding the principle that all decisions are to be made in the best interests of the child”.

In preparing for today’s debate, I was deeply disappointed by the lack of an impact assessment of the full effects of the Bill. I found one on business, but I did not find any relating to how the provisions would affect the groups of children and their families to whom the Bill applies. I feel that that is deeply disturbing. Again, my views are shared by others, including the Association of School and College Leaders. Because of the Bill’s complexity and the range of areas that it covers, there is concern about whether proper parliamentary scrutiny can be given to ensure that it has no unintended consequences. I think we should listen to such organisations.

The Bill’s positive elements have been recognised, but a number of concerns have also been raised, and I would like to focus on a couple of them. Although the steps forward on adoption have been recognised, we have heard concerns about adoption and about the importance of ensuring that the interests of children are paramount in the family justice system and of the need to strengthen the independence and powers of the Children’s Commissioner for England.

If I may, I will focus in my remaining time on part 3, which deals with special educational needs. These provisions have been heralded as the biggest reforms to SEN provision in over 30 years. Replacing the dual system of assessment for children and young adults with a single system and the education, health and care plans is a positive change. I am mindful of what colleagues on the Education Committee said in their pre-legislative scrutiny. The Committee observed that

“the legislation lacks detail, without which a thorough evaluation of the likely success of the Government’s proposals is impossible”.

Although some proposals, such as the pathfinders, have been supported and taken forward, Scope and other disability charities in the Special Education Consortium have continued to express their ongoing concerns, particularly about clause 30 and the local offer. The real concern is that, as the provisions stand, they allow for no more than a directory of services, with no duty on local agencies to provide what is set out in the local offer or to define service standards, although there has been some movement there. The risk is that the Bill’s objectives in seeking to improve educational outcomes for children with SEN and disabled children and their families will not be met. There is also concern that children with less complex needs will fail to reach the threshold for new education, health and care provision in much the same way as only the adults most in need of care services are able to access them.

[Meg Hillier]

One concern I have encountered a lot in my constituency is where a child has something that is difficult to diagnose or put a name to. Does my hon. Friend share my concern that unless we get this right in the Bill, those children, their parents and their teachers will not have any better provision than is currently on offer?

[Debbie Abrahams]

I do indeed share that concern. Similar issues have been raised with me in my discussions with different charities.

We know that one in eight families has a child with SEN, and it is estimated that one in six will not be provided for under the Bill. We already know that 1.4 million children with SEN do not have a statement and will not be eligible for EHCP—education, health and care provision—under the Bill. Approximately 87% of all children with SEN are currently supported through school action or school action plus—in the provision of speech and language therapy, for example. With the abolition of these programmes, those children will rely totally on the local offer, so we must ensure that it is strengthened.

I want to refer quickly to accountability, which is still an issue in respect of these services. We need to make sure that children and their families can hold people to account and be engaged in the provision of their services, and the monitoring review of those services. Simply publishing the comments of parents and young people does not really do what is needed. We need to ensure that the engagement is meaningful, as reflected in the UN convention of the rights of the child.

This Bill is inadequate not only in the proposals it puts forward, but in its failure to recognise the policy context that surrounds it. My hon. Friend the Member for Bridgend (Mrs Moon) spoke about that context, which includes complex legislation on welfare reforms and health system reforms, as well as massive cuts in local authority funding. It remains to be seen how well those local authorities will cope with that.

I want to conclude with a reference to one of my constituents: the mum of an eight-year-old son with Down’s syndrome. She says that taking him to all the various appointments he needs, whether for physiotherapy or speech therapy, or even for accessing an appropriate shoe service, given that he needs to wear corrective boots, has proved to be a full-time job in itself. Such demands on her time meant she was forced to give up work. As the household income has dropped with her loss of earnings, her husband has taken a higher-paid job in Scotland to make ends meet. Now the family is together only for the occasional weekend. Joanna says:

“I am not naive, I don’t expect services to exist just for me, or facilities to be for my convenience. The frustration comes from the possibility of services being made easier.”

This is an example of the stress experienced by families across the country in raising children with disabilities and special educational needs. Positive though some elements of the Bill are, it does not reassure us that the particular pressures that these families face will be addressed. I hope that the Government will look again at how to strengthen the provisions.

Energy Bill [Lords]

Debate between Debbie Abrahams and Meg Hillier

Tuesday 10th May 2011 Commons Chamber

[Meg Hillier]

I’m not your love, matey, and I suspect someone else might find that surprising, too.

It is important that we get the detail in Committee and I make that point for a good reason. The Government have form on not giving answers in Committee. The Bill has been in the other place and so we might have expected it to be better. We gave it a fair wind and we would still like to see it succeed, but we need more detail before it can do that.

There is a yawning gap between Ministers’ rhetoric and their actions and it grows day by day. In public, Ministers talk about being the greenest Government ever, so why have they called the Climate Change Act 2008 “red tape” and placed it in a review of what they call “burdens on business”? Ministers might huff and puff and say that the Act is safe in their hands, and I do not doubt the commitment of the DECC team, but why then is it in the red tape review? Perhaps they need to talk to other members of their Government.

Why have Ministers ended the commitment to zero-carbon homes? That fact caused the WWF to resign its place on the working group as the decision was so out of the blue. Why will the green investment bank not be up and running for two more years? Allegedly, the money to fund it is coming from Britain’s stake in a uranium enrichment company, URENCO, which the Financial Times suggests is in doubt.

There is an elephant in the room and we all know what it is. The Energy Secretary has had his eyes on a prize other than reducing carbon emissions. I know that he has had to pull himself away from the detail of the Bill in recent days to attack his coalition partners by article, letter and leak, and it is a shame that he has had to do so because—to give him credit—it might be a better Bill if he had applied himself to it. We also know that the demands of the alternative vote campaign have, for some reason or another, taken up much of his time when he might have been meeting with green groups, consumer groups or businesses that would have told him what a mess the Bill was and how to improve it. There is still no excuse, when he is backed up by the gold-standard civil service of this country, to come to the House with this dog’s breakfast of a Bill. It is weak on specifics, clouded in uncertainty and built on such shaky foundations that few can have confidence in its standing up to scrutiny. We want the Bill to succeed, but we have no detail and no plan from the Government about how it will be implemented.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I agree with my hon. Friend that there is still much to do before the Government can claim to be the greenest ever. There are also significant gaps in the Bill. One example from my constituency concerns a community hydro project in Saddleworth that might not go ahead because of the anomaly in the current legislation, which is not addressed by the Bill, that prevents it from securing the higher feed-in tariff rates. Surely that is something we should be encouraging.

[Meg Hillier]

That is another example of the Government’s dither and delay in making decisions that can have perverse effects on the ground.