Pension Investment in UK Equities

John Glen Excerpts

Tuesday 25th November 2025 Westminster Hall

[John Glen (Salisbury) (Con)]

I beg to move,

That this House has considered pension investment in UK equities.

It is a pleasure to serve under your chairship, Mr Stringer. I think all hon. Members would agree that UK pension funds are hugely important, primarily to the millions of future pensioners, but also to the many scale-up businesses that are seeking additional investment and need extra capital for growth. They are also an important part of the UK’s capital markets more broadly.

The UK has the second largest pool of pension capital in the world, but only 4% of it is allocated to UK assets. UK defined contribution pension scheme assets are set to grow from around £500 billion in 2021 to £1 trillion by 2030, an increase of 100% over nine years, and that growth will accelerate faster beyond that date. The key issue I wish to focus on is how we are to regulate, manage and enable the future form of that pool of capital, and the appropriate oversight of regulators or Government—if any—of the way it is managed.

As I think all Members want, the Government have stressed the growth imperative and its prioritisation, but under-investment in the UK economy will be a significant dampener on growth. Over the past 25 years, allocation to UK equities by UK pension funds has fallen from more than 50% to 4.4%. Since the global financial crisis, the UK has under-invested, both in absolute terms and compared with our G7 peers. Our investment-to-GDP ratio is around 17% to 18%, compared with our peers’ 20% to 25%. That investment gap accounts for around £100 billion.

The Government have introduced meaningful reforms. The closure of defined benefit schemes has resulted in large amounts of capital being moved from equities to bonds. Although that was a rational response to match the profile of obligations of those schemes, it is questionable whether it is optimal for the wider economy. That eagerness to match payouts to known obligations of a defined population has perhaps encouraged a lack of ambition in investment in the wider economy.

What has happened progressively with DC scheme regulation is passive tracking rather than active investment. We have prioritised the minimisation of costs over returns. That has incentivised more and more funds to invest in cheap asset classes, almost alternating their investments, with fixed income, property and indexed funds being used. That is very frustrating, because over the past decade we reached consensus on auto-enrolment, and there was an emphasis on saying, “Oh, we mustn’t have any fat-cat fund managers taking too-big fees”. There was an anxiety about that, which drove an oversimplification of automated fund management. It allowed everyone to say, “The fees are very low”, but we did not have the right focus on performance and whether we were investing in the right things in the economy. It is obviously cheapest for a fund to go to passive, as it does not require active management and the skills that come with it.

There have been previous fundamental reforms, such as the removal of dividend tax credits. Before 1997, when a UK company paid a dividend, it was accompanied by a tax credit, and pension funds could reclaim that credit in cash from His Majesty’s Revenue and Customs. That meant that pension funds effectively received dividends gross of tax, boosting their investment returns. That reduced the effective yield on UK equities held by pension funds by around 20%, which was then the tax credit rate. There have been changes, with ISAs introduced in 1999 and self-invested personal pensions being widened in 2006, but this has removed the focus on UK investment.

[Kit Malthouse (North West Hampshire) (Con)]

My right hon. Friend makes an interesting point about the change from defined benefit to defined contribution and the impact of the taxation changes that brought that about. Would he care to comment on whether he sees that as part of an unwitting repricing of the return on risk, which has impacted not only on pension funds, but more widely? He said that pension fund investment in the market is down, but retail investment in the market overall is also down very significantly. It feels like the British people as a whole have lost their appetite for risk, and that might be because the return on risk is now too highly taxed.

[John Glen]

Perhaps unsurprisingly, my right hon. Friend anticipates an argument that I am going to move on to about the wider culture of awareness of where investments are happening in our pensions, how important that is, and how we need to be cognisant of the gap that exists.

[Jim Shannon (Strangford) (DUP)]

I thank the right hon. Gentleman for securing this debate. The right hon. Member for North West Hampshire (Kit Malthouse) referred to the impact on Britain, but there is an impact regionally as well. Many workers in Northern Ireland are enrolled in UK-wide pension schemes and equity systems, and their long-term financial security depends on those schemes being able to generate strong, sustainable returns. When the right hon. Gentleman presents his proposals and asks to the Minister, can he try to obtain an assurance that whenever legislation comes through, similar things will happen in Northern Ireland, including for my constituents, thereby giving us all the equality we should have in this system?

[John Glen]

The hon. Gentleman makes a reasonable point. In a moment, I will speak about what needs to change and where we need to get to.

Returning to my argument, the Pension Schemes Bill, which will have its Report stage next week, has made some welcome progress—I have to acknowledge that to the Minister. It has received significant cross-party support in many areas. The consolidation of DC schemes to provide greater scale and move away from a fragmented system has long been a journey that most people would see as desirable, but we must think about the scale of capital that our growing companies need. I am concerned about how quickly some of those changes will take place. Having been in intense dialogue with the Prudential Regulation Authority and the Financial Conduct Authority when I was in the Treasury, I know that these things do not happen quickly enough. I urge the Minister—though I know he does not need much urging—to be robust in ensuring accountability on the delivery of some of these things.

To advance our understanding of the shift away from equities and towards bonds, let me note that in 1997, UK pension funds held 73% of their portfolios in equities and 15% in bonds. Those figures now stand at 34% and 43% respectively. I have talked about the particular aversion to UK equities, with UK pension funds investing 4.4% of their funds in domestic equities, compared with an international average of 10.1%. However, at the same time, the UK provides pension tax advantages worth more than £48 billion. That is £48 billion of taxpayers’ money that is essentially there to enrich our contributions and lay down a marker for the future. At the moment, though, there is no expectation that any of that is invested in the UK—this relates to mandation, which I will discuss now.

Around half of DC funds are in global allocations. My concern is that outflows from UK equities will continue as that global allocation continues and relative growth is seen in other markets, such as the US. As other economies grow, the UK part of the pie will automatically shrink, which means less money going into UK firms from these sorts of investment funds. As that passive fund practice becomes more prevalent, businesses such as the ones in Northern Ireland mentioned by the hon. Member for Strangford (Jim Shannon) are simply off the radar. They do not receive any analysis, and mid-cap and small-cap firms lose out, with pools of capital never being available to them. As such, that 4% investment in equities is likely to continue to fall.

The big point I want to make is about what people think of their pension schemes. New Financial, a well-known and respected think-tank connected with the City, did a survey of 1,000 working adults in the UK with a pension. That survey graphically highlighted what a “low level” of understanding people have of their pensions and the

“disconnect between their expectations and the industry.”

It said:

“On average, people thought 41% of their pension was invested in UK companies or the UK stock market (out by a factor of five to 10 times)”,

and, staggeringly, that

“two-thirds of people said pensions should invest more in UK equities even if the returns might be lower than investing in other markets.”

There is clearly a gap in knowledge and understanding. I advocated against the Department for Education’s backstop; I did not make much progress when I was in Government, but I am glad that this Government have made progress on financial education in the Department for Education and that it has now become part of the curriculum. This is a key chapter that is needed in that textbook.

I am anxious that the answer should not be for the City and pension fund managers to say, “We know best, we have a fiduciary duty—don’t worry about it.” Auto-enrolment has helped provide them with enormous funds to invest, but the disconnect between public expectation and what they are doing with those funds must and should be addressed. The vast majority of consumers investing in DC schemes do not change from their default allocation, although they are of course able to do so. Those defaults require approval, so alongside a campaign to get people to understand what is happening with their pensions and where their money is being put, it is worth asking people to verify what proportion of their pension savings are being invested where. They have that discretion; if they do not exercise it, that investment will default to whatever the scheme is going to do, and the scheme will likely continue in a similar way.

The London Stock Exchange Group tells me that by 2030, overall investment in UK equities by DC pensions would increase by around £76 billion—potentially as much as £95 billion—if this option were used. That is not mandation; I think that would be overreach, but I am sympathetic to the disconnect that exists. We must find a way to open up a proper discussion and increase awareness of the gaps where money is currently not being invested. I recognise that the Government have maintained a reserve power to mandate, although I doubt they will ever use it. However, I believe that individuals should be more empowered to take decisions, and I think they would be more empowered as active members of a DC fund. At the moment, they are not exercising that right. Consumers do and must have a choice about how their pensions are invested, and proposals to amend how default funds are allocated do not, and should not, prevent people from choosing exactly how they want to invest their pension pots.

There are so many opportunities in this country, such as in life sciences—my right hon. Friend the Member for North West Hampshire (Kit Malthouse) has a great understanding of that sector. When we are looking for that scale-up capital, the lack of funds in the UK to provide options for series B and sometimes series C funding is manifest. I just feel that we are missing an opportunity. I will understand if we do not go for mandation—I am sympathetic to that decision—but we should do something in between.

I know we are on the eve of the Budget, and as the Minister said to me as we entered the Chamber, there is little opportunity for him to adjust anything. I do not know what changes will be made tomorrow to pensions. There is obviously a lot of speculation about a reduction in ISAs, but let us get that in perspective as well. Only about 7% of those who have ISAs use the £20,000 limit. I do not believe that if there is any sort of mandation of the use of equities, people will go out and invest in them overnight, because the vast majority of people who have an ISA are at a later stage of life, and their ISA is in cash, so they will not do that anyway.

Let us get it in perspective. Last year, around £750 billion was invested in ISAs: £461 billion in stocks; £289 billion in cash. Last year, the Pensions Policy Institute estimated that there is a total of £3 trillion in UK pension assets across annuities, DC funds and DB funds. That is where the pools of capital can be opened up for investment in the UK economy. We need a greater focus on the public markets, and a vibrant, active, engaged and informed investor base to change the way that we move forward.

I have a couple more points to make. It is salutary to reflect on what happened with Arm Holdings: a British success story founded and built in Cambridge. As we know, it is a producer of semiconductors and software originally listed in London. The company was taken private because it felt that the public markets in this country could not support it; there was not enough liquidity in the markets. Arm was subsequently re-listed in New York, and since being taken off the London Stock Exchange, its valuation has grown by £112 billion. Of that growth, only £825 million has gone to UK investors. Had it stayed listed in the UK, that number would have been £43 billion. That would have meant higher pension valuations for a lot of people in this country, and more revenue for the Treasury from capital gains. It exemplifies the problem that we have: the lack of active, open markets where investors take risk and adopt a profile similar to those seen in the US. The FCA is disempowered and discouraged from trying to offer consumer redress. Through better financial education, we could get people to engage with the significant obligation that they have to save for the future, to take decisions that are in the interests of the UK economy and to pump more money into UK companies.

In conclusion, I welcome many provisions in the Pension Schemes Bill. Poorly performing pensions need to be challenged. I welcome the consolidation and scale-up of the pots, which will take too long and should be encouraged to move forward swiftly. But I have an anxiety that in a legitimate effort to hold back from mandation, there is a gap in thinking about how we open up the public’s understanding and imagination regarding where they can invest. I urge the Minister to move forward with some tougher rules around how people verify the choices that they are making so that the powerful voices who run the pensions industry do not default to saying, “We know best; we have fiduciary duty, and we will do it better than you could dream of doing.” The evidence is that that is not what people want. A golden thread of careful and delicate interventions is needed so that we can transform public behaviour and outcomes for our pensions industry.

[Several hon. Members rose—]

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[The Parliamentary Secretary to the Treasury (Torsten Bell)]

It is a pleasure to serve under your chairship, Mr Stringer. I will indeed leave several minutes for the winding-up speech. Like everyone else, I begin by congratulating the right hon. Member for Salisbury (John Glen) on securing this debate, particularly on the Budget eve; it is very kind of him to make my diary relaxed. It is a topic on which he has thought deeply and that we have discussed many times. As ever, I welcome his constructive and practical approach, which befits someone who confirmed to me earlier that he holds the title of longest-serving Economic Secretary to the Treasury. Luckily, he was not on performance-related pay, given the growth of the economy during that time.

[John Glen]

I was not paid during that time.

[Torsten Bell]

He may not have been paid at all. His focus at the beginning of his remarks on growth and one of its key enablers, investment, was right. If we stepped back and forced ourselves to ask, “What is the one thing the British economy needs more of?”, it would be public and private investment. As several hon. Members have said, the UK has the second largest pension scheme in the world, worth £2 trillion. It is our largest source of domestic capital, underpinning not just the retirement we all—or at least most of us—look forward to, but the investment on which our future prosperity depends.

That is why this Government launched and concluded a review of pensions investment within a year of taking office. Those reforms are now being taken forward through the Pension Schemes Bill, as the hon. Member for South West Devon (Rebecca Smith) pointed out. First and foremost, the Bill includes measures to deliver bigger and better pension schemes in the DC market. It requires multi-employer defined contribution pension providers to hold at least £25 billion in assets by 2030 or to be on track to do so by 2035.

That requirement will drive scale and sophistication in workplace DC schemes so that they are better positioned to invest in a fuller range of asset classes, including specialist private markets such as venture capital, which we have not heard much about today but which are key. The biggest gap in UK capital markets is growth finance: the gap that holds back our science and tech start-ups, scale ups and pre-initial public offering companies. That does not take away from the challenges we are raising about public markets, but if we look at our capital markets as a whole, that is our biggest gap.

Pensions can be a key source of funding for those economically critical investments and sectors, which my hon. Friend the Member for Buckingham and Bletchley (Callum Anderson) set out, as he has done many times in the discussions on the Pension Schemes Bill. This is not just theoretical; it is actually starting to happen. Legal & General is investing in post-quantum cryptography and Nest is investing in energy generation. Last week, the Chancellor and I met with Aegon UK, NatWest Cushion and M&G, which have all confirmed that they will invest £200 million in the British Growth Partnership, a fund managed by the British Business Bank investing in cutting edge British businesses and building on British strengths in areas such as clean energy, advanced manufacturing and the medical technology that other Members have talked about in the past.

As we have heard, Members are well aware of the Mansion House accord, a voluntary commitment by 17 major DC funds to invest 10% of their main default funds in private assets by 2030, including 5% in UK private assets. That will boost investment across a range of asset classes, including growth market equities, which we have not touched on much today. That is welcome news driven by a focus on giving savers better returns and showing how pension funds can contribute directly to making Britain the best place to start up, scale up and ultimately list companies. I should emphasise that we should think about our capital markets as a ladder up which firms can climb. Our job is to make that climb easier, not just to focus on the ultimate destination.

Several Members raised the question of transparency. The Pension Schemes Bill includes a new framework under which DC funds will need to disclose their investments in more granular detail, including UK-overseas and asset class split. We will be able to see in more detail what individual schemes are doing. We are doing that so that we can measure their value for money. For the first time, we will be able to see where those funds are invested.

Finally, as Members know, the Bill includes a reserve power, which has been discussed today, to ensure that the change that the pension schemes themselves say is needed in the interest of members happens. I will repeat what I said on the “Making Money” podcast—it is very exciting that the hon. Member for South West Devon had time to tune in. I am confident that this power will not need to be used, given the progress the industry is already making. It is designed as a proportionate backstop to the commitments that the industry has already made, with strong safeguards to protect the interests of pension savers.

On mandation, I note—as gently as possible, given the excellent tone of this discussion—that I have spent much of the last six months hearing strong opposition to any mandation backstop while hearing, often from the very same people, language that does not directly contradict that, but gets close to calling for mandation, whether it is social housing, public equities or anything else. I just gently note that tension before as gently moving on to set out some of the wider steps that the Government are taking to support our capital markets, because they go far beyond pensions. It is important to note that although UK equity markets have faced some challenges in recent years, London’s markets remain some of the deepest and most liquid in the world. We want to build on those strong foundations and make the UK as attractive a destination as possible for companies to start, scale and stay. There is a danger here: we need to make sure we are having this discussion about the change we need to see, while also celebrating many of the real strengths that exist in London’s capital markets.

--- Later in debate ---

[John Glen]

I thank the Minister for his response. I think there has been a lot of common ground across the Chamber this afternoon, but in some areas we have not quite bottomed out what the Government’s view is about empowered pension fundholders electing to discern what amount of their pension should be invested in UK equities. We have to continue that conversation. I thank my hon. Friend the Member for South West Devon (Rebecca Smith) for clearly setting out our party’s position on the Pension Schemes Bill; I agreed with her very much.

I acknowledge the contributions of the hon. Members for Buckingham and Bletchley (Callum Anderson) and for Torbay (Steve Darling), my right hon. Friend the Member for North West Hampshire (Kit Malthouse), the hon. Member for Boston and Skegness (Richard Tice), and my friend the hon. Member for Carshalton and Wallington (Bobby Dean). I respectfully say to the hon. Member for Boston and Skegness that when I was a Minister and I did the capital markets review, the Jonathan Hill review and the Mark Austin review, I did not just passively sit there; I went to the City, listened to people like him who were practitioners in the City in different funds, and worked with my officials to deliver what the City wanted, to optimise the pathway that we were in.

That goes down to having deep conversations about which regulations need to be moderated and which need to be withdrawn, such that the Hill review—and this Government have enacted everything that came from it—still leaves me with a sense of frustration, because there was nothing that I would not do that I was asked to do in the interests of London. To believe that somehow we set up four working groups and have a big bang like 1986 or something, and that it will all be straightforward, I think is mistaken. It is a complicated ecosystem, and we will need to look at the risk profile. I probably agree with the hon. Gentleman that there needs to be a greater appetite for risk. We have to reset that risk appetite, because we have had a dozen years since the reset after the global financial crisis, and we need to look at it again. I do think the PRA needs to be challenged, as I think it will be next week by the Financial Policy Committee, on some of the issues around what level of capital it is prepared for banks to have, which is a good place to start.

I am very encouraged by the constructive nature of the conversation this afternoon. I hope that the Minister will reflect a little more on the need to empower pension holders to take decisions in the interest of investing more in UK equities.

Oral Answers to Questions

John Glen Excerpts

Monday 1st September 2025 Commons Chamber

[Alison McGovern]

I thank my hon. Friend for his question. I am glad he is visiting Rugby jobcentre, and I encourage all Members across the House to go to their local jobcentres, because their work coaches have the most experience and knowledge about what we need to do to get people into work. We are creating “jobcentre in your pocket”, so that everyone can have access to help 24 hours a day. Letting technology take the strain will mean that our work coaches can do more of what they do best, which is giving people—person to person—the confidence to take up life’s chances.

[John Glen (Salisbury) (Con)]

T5. Last week, Policy Exchange published a very insightful report, “Out of Control”, looking at the pathways to benefit entitlements. It made this point:“Fifty years ago, just one in 2,500 people was said to have Autism; today that has risen to one in 36 children”.Will the ministerial team undertake to look at the implications for the Department of that definitional creep and the specific implications for benefit entitlements?

[Sir Stephen Timms]

We have set up a panel of experts to advise us on how best to improve employment prospects for people with autism and neurodivergence. As the right hon. Member knows, we will be undertaking a review of the PIP assessment, co-producing it with disabled people, so that we have a clear way forward for who should and who should not be entitled to the personal independence payment.

Welfare Spending

John Glen Excerpts

Tuesday 15th July 2025 Commons Chamber

[John Glen (Salisbury) (Con)]

Does my hon. Friend acknowledge the words of Richard Hughes of the OBR, who said in a report last week:

“The UK cannot afford the array of promises that it has made to the public”?

He also said that debt is on a trajectory that the UK “can’t sustain”.

[Sir Ashley Fox]

I am grateful to my right hon. Friend for making that point. It is essential that we put Britain’s finances on a sustainable path. All benefits are funded by taxpayers or borrowing, so every time the cost of benefits rises, so does the burden on taxpayers, or the debt we place on future generations.

--- Later in debate ---

[Tom Hayes]

I always agree with my hon. Friend, especially when she says that I should agree with my mum. I thank her for her intervention, and I agree that nobody’s background should shape their future. We are in this place to create a better social security system, a better NHS and better public services, so that children today in all our constituencies can access the support that they need, in the form that they need, enabling them to truly thrive.

It deeply saddens me that in my constituency of Bournemouth East, children are growing up in poverty. Some 27% of children in my constituency are growing up in relative poverty; in the ward of Boscombe West, that figure is 43%, and in the ward of Springbourne, it is 36%. That is unacceptable in 2025 in modern Britain, and we should not put up with it. Looking beyond my constituency, a near-record 2.8 million people are out of work due to long-term sickness—thrown on the scrapheap. Some 300,000 people fall out of work every year because of their health, and part of the reason for that is the underfunding of our public services; that leaves people on waiting lists, and waiting lists kill.

We know that 4.5 million children are in relative poverty after housing costs, a figure that has risen by 900,000 since 2010. We also know that the Tories presided over the worst Parliament ever recorded for economic inactivity; it rose by over 800,000 to 9.4 million people. We hear from Opposition Members about the connection between work and welfare, but when they presided over such economic inactivity, such poor productivity and such sluggish growth, is it any wonder—

[John Glen]

Will the hon. Member give way?

[Tom Hayes]

I will not be taking an intervention.

Is it any wonder that, as a consequence, we have people who are in significant difficulty, particularly when the social security and public services that they rely on have been chopped back?

As such, I welcome the launch of the child poverty taskforce as an early priority of this Government. I was pleased to meet the Minister just last week to talk about my priorities, which include trying to make sure that play is not squeezed out of childhood and that we have a social security system to meet the needs of children, particularly in the disadvantaged areas of my constituency.

Pension Schemes Bill

John Glen Excerpts

2nd reading
Monday 7th July 2025 Commons Chamber

[Torsten Bell]

That was not the support I was hoping for from the Chair—understandable, but harsh. I will come to some of the points that the right hon. Member raises. I think he is referring particularly to pre-1997 indexation, which I shall come to.

As I said, the Bill includes a reserved power that will allow the Government to require larger auto-enrolment schemes to invest a set percentage into wider assets. That reflects the wider calls that have been made for this change but have not led to its taking place. What pension providers are saying is that they face a collective action problem, where employers focus too narrowly on the lowest charges, not what matters most to savers: the highest returns. I do not currently intend to use the power in the Bill, but its existence gives clarity to the industry that, this time, change will actually come.

Some argue—I will come to some of the points made by my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier)—that this somehow undermines the duty that pension providers have to savers. That is simply wrong. First, the Bill includes clear safeguards to prioritise savers’ interests and is entirely consistent with the core principle of trustees’ fiduciary duties. Clause 38 includes an explicit mechanism, which I have discussed with Members from the main three parties in this House, to allow providers to opt out if complying risks material detriment to savers. Secondly—this is the key point that motivates a lot of the Bill—savers are being let down by the status quo. There is a reason major pension schemes across the rest of the world are already investing in this more diverse range of assets.

Fragmentation within the pensions industry happens within providers, not just between them. Some insurers have thousands of legacy funds, so clause 41 extends to contract schemes the ability that trust-based schemes already have to address that. Providers will be able to transfer savers to another arrangement without proactive individual consent if, and only if, it is independently certified as being in the member’s best interest.

Another point that I hope is of common ground across the House is that we need to do more to realise the untapped potential of the local government pension scheme in England and Wales. We need scale to get the most out of the LGPS’s £400 billion-worth of assets. Again, the Bill will turn that consensus into concrete action. It provides for LGPS assets spread across 86 administering authorities to be fully consolidated into six pools. That will ensure that the assets used to provide pensions to its more than 6 million members—predominantly low-paid women—are managed effectively and at scale. Each authority will continue to set its investment strategy, including how much local investment it expects to see. In fact, these reforms will build on the LGPS’s strong track record of investing in local economic growth, requiring pension pools to work with the likes of mayoral combined authorities. In time, bigger and more visible LGPS pools will help to crowd private pension funds and other institutional investors into growth assets across the country.

Our measures will build scale, support investment and deliver for savers, but the Bill does more to ensure that working people get the maximum bang for every buck saved. To reinforce the shift away from an excessively narrow focus on costs, clause 5 provides for a new value-for-money framework. For the first time, we will require pension schemes to prove that they provide value for money, with standardised metrics. That will help savers to compare schemes more easily, and drive schemes themselves to focus on the value that they deliver. For persistently poor performers, regulators will have the power to enforce consolidation. That will protect savers from getting stuck in poorly performing schemes—something that can knock thousands of pounds off their pension pots.

We are also at last addressing the small pension pots issue. I was out door-knocking in Swansea earlier this spring, and a woman in her mid-30s told me that something was really winding her up—and it was not me knocking on the door. [Laughter.] This is a very unsupportive audience. It was trying to keep track of small amounts of pension savings that she had from old jobs; the only thing that was worse was that her husband kept going on about it. There are now 13 million small pension pots that hold £1,000 or less floating around. Another million are being added each year. That increases hassle, which is what she was complaining about, with over £31 billion-worth of pension pots estimated to currently be lost. It costs the pensions industry around £240 million each year to administer. Clause 20 provides powers for those pots to be automatically brought together into one pension scheme that has been certified as delivering good value. Anyone who wants to can of course opt out, but this change alone could boost the pension pot of an average earner by around £1,000.

Of course, once you have a pension pot, the question is: what do you do with it? We often talk about pension freedoms, but there is nothing liberating about the complexity currently involved in turning a pension pot into a retirement income. You have to consolidate those pots, choose between annuities, lump sums, drawdowns or cashing out. You have to analyse different providers and countless products. Choice can be a good thing, but this overwhelming complexity is not—77% of DC savers yet to access their pension have no clear plan about how to do so.

[John Glen (Salisbury) (Con)]

I agree with a lot of what the Minister is saying. Given what was said last week by the Financial Conduct Authority on targeted support, would he look again at what is being resisted by the Money and Pensions Service? It is not prepared to work with the pension schemes to allow automatic appointments so that pension savers can be guided to better outcomes. I realise that MaPS will say that it is too busy, but this is a key moment. If we could get people to engage at age 50, say, we would see vastly different outcomes for them if they invested properly, and in better ways, with their pensions.

[Torsten Bell]

I thank the right hon. Member for his question, and for the discussions that we have had on this important topic. He spent years working on this. The priority for MaPS right now is to ensure that we have the system set up to deal with the additional calls that are likely to come when pension dashboards are rolled out, but I will keep in mind the point that he raises. I think he and a number of hon. Members wrote to me about exactly that point. As I promised in my letter, I will keep it under review, but we must not overburden the system, because we need it to be able to deliver when pension dashboards come onstream.

--- Later in debate ---

[Mark Garnier]

It is an important question, and one that I will come to in due course. Watch this space for a fascinating manifesto in the run-up to the next general election—I am sure everybody looks forward to it.

[John Glen]

Further to the point made by the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier), in every election we all say that we cherish the triple lock, and we seek to gain electoral advantage from it, but do we not need to come to a settled collective view in society about the combination of the triple lock and the inadequacy of auto-enrolment? The 8% contribution is not enough, as the hon. Gentleman said; we need to get to Australian levels. One speaks to the other. Unless we can take a holistic view of those two elements and the third pillar, we are not being truly honest about some of the trade-offs, given that we are dealing with £70 billion of tax relief at the moment.

[Mark Garnier]

The former City Minister raises a good and important point. He tries to bring together a number of related but quite disparate issues that we need to think carefully about. I would not want to make Conservative party policy on the hoof at the Dispatch Box, though the Minister urges me to do so. These are important points, and I think my right hon. Friend would understand that I would not want to rush into anything without careful, considered thought. These are issues on which he and I—and the Minister, of course—might get together.

As I said, we need a bold, ambitious plan to ensure that every worker in this country can look forward to a retirement free from poverty and insecurity. That means looking again at contribution rates, the role of employers and how we support those who are excluded from the system.

Another omission in the Bill is the failure to extend the benefits of auto-enrolment to the self-employed. There are over 4 million self-employed people in the UK—people who are driving our economy, creating jobs and taking risks. Too many of them face the prospect of old age in poverty, with little or no private pension provision. Research by the Institute for Fiscal Studies found that only 20% of self-employed workers earning over £10,000 a year save into a private pension. With the self-employed sector continuing to grow, the Bill misses an opportunity to come up with innovative solutions for this underserved group in the workplace.

Universal Credit and Personal Independence Payment Bill

John Glen Excerpts

2nd reading
Tuesday 1st July 2025 Commons Chamber

[John Glen (Salisbury) (Con)]

I wanted to speak in this debate to try to get behind some of the headlines and challenges that those on the Government Benches face in getting to a settled view today, by looking back over the last years the Conservatives had in government at some of the lessons that we must draw from that experience but which are relevant to consider today.

I will not be able to support the proposals, not because I do not think some of them have significant merit, or because I do not have the greatest respect for the Minister for Social Security and Disability, who has spent 31 years in this place and who I believe will do all that is asked of him, but because I do not think that the changes in the Bill are sufficiently ambitious to deal with the scale of the challenges we face.

I was in government for seven years and I was in the Treasury for most of that time. During the covid epidemic, we had to make some pretty quick changes while the economy was shut down overnight. They involved changes to benefits, standing up a furlough scheme very quickly, bounce back loans and many interventions to try to keep our public services going, and they were at the core of some of the patterns of behavioural change that we now see in our benefits system. I was looking at the numbers for my constituency, which I recognise is a wonderful place and also quite a wealthy place that does not have some of the embedded challenges in other parts of the country. The number of PIP claims in January 2019 was 2,065 and in April 2025 it was 4,211. The vast majority of my constituents and the vast majority of people in the country cannot understand how those numbers have doubled in such a short amount of time.

I fully respect the aspirations of the Secretary of State and her ministerial team in seeking to address that, because we have to come to terms with what we can afford as a country. I also respect sincerely the remarks of the previous speaker, the hon. Member for Liverpool Walton (Dan Carden), whose constituency is rather different from mine, because I think we are united in this place in wanting to look after the most vulnerable. I want to see those who are suffering, who are disabled and who need support from the state to receive that support in a timely way. What I do not want to see is people written off permanently.

About 12 or 14 years ago in this House, we had a debate about mental health. Several Members of Parliament stood up and bravely talked about their own mental health challenges. We then went on a journey to bring parity of esteem to mental health and physical health in our benefits system. I believe that that pathway into assessment for mental health has not worked. It writes people off too easily and it does not serve them well, by leaving them in a place where they are, on an enduring basis, reliant on the state. As a country, we cannot afford it. It is time to legislate for more resilience: resilience in our country and in those who receive benefits such that they can get out of that place of dependency, because I do not think it is a happy place for anyone to be.

When I reflect on the changes proposed today, I can see the hand of the Treasury. I can see the fiscal imperative. I can see the public finances and what is now likely to happen in the autumn, which will mean more tax rises. Now, for some on the Government Benches that will be a price worth paying, but we as a country will lack the productive capacity to grow if we tax those who create jobs to a level where they just will not create jobs any further. We have to come to terms with that profound reality; if we do not, we are in a death spiral as a country.

I give credit to the Government for some of the steps they are taking today. However, for reasons different from those stated by many on the Government Benches, I will not be able to support the Bill. I do not think it is holistic, goes far enough or deals with the profound tragedy that has happened to our benefits system as a consequence of covid and our public finances.

[Yuan Yang (Earley and Woodley) (Lab)]

I always appreciate the right hon. Gentleman’s remarks in the Treasury Committee and in the Chamber as an extremely fair-minded colleague. I appreciated his remarks in yesterday’s statement and the admission that the previous Government’s handling of our recovery from the pandemic was not what it should have been. However, does he not recognise that the constituents with whom I meet now rely on their PIP to get to their places of work because of the stripping away of council funding for bus routes, social care and all the services that were left in tatters by the previous Government?

[John Glen]

I reciprocate the hon. Lady’s warm sentiments. She makes her political points, some of which will be true in some circumstances, and some of which will not.

My point today to everyone in this House is this: let us be real, honest and true about the trajectory of growth in welfare spending in this country, and let us be honest about what we can afford. We face a transformed landscape of threats to this country, with calls for more spending on defence. We have to address our priorities, but we must also recognise that the most vulnerable need continued support. However, the system we have brings too many into dependency on the state, and that is not right.

Welfare Reform

John Glen Excerpts

Monday 30th June 2025 Commons Chamber

[Liz Kendall]

Our new jobs and careers service applies in all parts of the UK—including Scotland—to help get more people back into work with personalised support. The spending review has delivered an additional £9 billion for Scotland. It is the biggest ever settlement in the history of devolution. I hope that the SNP matches our ambition to get more people into good work instead of cutting the employability budget as it has done in recent years.

[John Glen (Salisbury) (Con)]

I think that the vast majority of people in this country believe in a welfare system that is compassionate to the vulnerable, and particularly to the disabled, but they can no longer understand why so many people here—in contrast to other similar countries—are in this situation where they are not working.

[Nadia Whittome (Nottingham East) (Lab)]

It’s because you were in power for 14 years.

[John Glen]

Yes, we were in power for 14 years, and during covid, when I was a Minister, we made decisions such as stopping face-to-face assessments because we could not do them. We all recognise that the recovery from that covid time has not gone as well as it should, but if the Secretary of State cannot deliver a shift in the numbers, the economy will be in a death spiral. She needs to recognise that these changes need to be reset radically to meet the country’s expectations.

[Liz Kendall]

I absolutely believe that we have to reset the system. We have to make sure that everybody who can work gets the opportunity to do so and the support they need. That is precisely what we are trying to do with these plans. I gently say to the right hon. Gentleman, who I admire, that it is precisely that failure and that mess that we are now trying to tackle.

Winter Fuel Payment

John Glen Excerpts

Monday 9th June 2025 Commons Chamber

[Torsten Bell]

My hon. Friend is right to highlight the targeting. Setting the means test threshold at £35,000 ensures that it is well above the income levels of pensioners in poverty and is around the average earnings level. On policy in Scotland, an important principle of devolution is that those are decisions for the Scottish Government, but they are also decisions for which they will be held accountable.

[John Glen (Salisbury) (Con)]

Over several fiscal events over seven years, the option of removing the winter fuel payment from the wealthiest was resisted by the previous Government because there was not seen to be an effective rationing mechanism and there were considerable presentational challenges. Will the Minister confirm that pensioners with no mortgage and with significant tax-wrapped savings in individual savings accounts or venture capital trusts, but with a monthly pension of £2,500, will still be fully entitled to receive the winter fuel payment?

[Torsten Bell]

I always enjoy discussing technical details with the right hon. Gentleman. I set the position out clearly in my initial statement: means-testing is based on taxable income of £35,000, which answers his question.

Mansion House Accord

John Glen Excerpts

Tuesday 13th May 2025 Commons Chamber

[Torsten Bell]

My hon. Friend is absolutely right. She has long talked about both the issues that she raises: the regional balance of investment and the ability of growing firms to get hold of growth finance. The latter is a long-standing problem in the UK economy, and today’s accord will help to address it. Although we talk about private assets and investment helping with infrastructure, it is also about providing growth capital to a wider range of firms. Obviously, the onus is on us and private asset managers to provide ways for pension funds to direct capital. Those are often small-ticket items, and pension funds will need them to be aggregated up to a higher level. That is exactly the work of the British Business Bank, which I know she has engaged with through the Select Committee. On both points, she is 100% right.

[John Glen (Salisbury) (Con)]

Undoubtedly, the City of London is not in the best possible place when it comes to where it is investing and the amount invested in UK equities. When I was a Minister, we had the Hill review, the Kent review, the Austin review and the capital markets review. Everything was done to seek to open up the City to more initial public offerings and more momentum. This systemic undervaluing of UK equities, and therefore the lack of investment in them, needs to be set alongside the fact that billions of pounds of taxpayers’ money is used to enrich the size of pension schemes through tax reliefs. I urge the Minister to continue engaging with the City. I welcome the voluntary commitments given, but we must come to the point where the risk-aversion of DB schemes is called out, considering the amount of taxpayers’ money that is effectively going into them. Will the Minister continue to look carefully at the options available, given that the previous Government sought—and his Government will no doubt continue to seek—to meet them wherever possible?

[Torsten Bell]

I always enjoy discussing these things with the right hon. Member, as we have done over recent months. He offers a recognition of the challenge facing the country, and in focusing on what we can do to start changing things, he takes a much better position than that adopted by his Front Benchers.

I recognise the right hon. Member’s point about risk-aversion. There is a need for more innovation in our pension landscape more generally—that is one of the areas in which I am glad to see progress. I take a slightly more positive view than he does on the consensus that things need to change. We are seeing that in the pensions industry more generally, partly in relation to investing in a wider range of assets, as well as in embracing the agenda that we are setting out for a smaller number of bigger pension funds that are able to take different kinds of risks.

The right hon. Member asks specifically about public equities. My view is that the accord from the industry today will support that by funding a pipeline of companies that can grow to the level at which they can list publicly. Also, private assets will include private shares, including the alternative investment market and others. I think the picture is slightly more positive than the one he paints, but I am not hiding from the wider question he raises about capital markets. The UK Government, the Chancellor and my colleague the City Minister are focused on that—he will have heard their words on ISA reform and the rest of it. I look forward to further conversations on that.

Winter Fuel Payment

John Glen Excerpts

Wednesday 19th March 2025 Commons Chamber

[Joy Morrissey]

I thank the hon. Member for his contribution and for his advocacy on this issue. [Interruption.] I will respond as I go through my speech; he has made a very sound point.

This is about tough choices. We all have to make tough choices, and being in government is hard. Those of us on either side of the House who have been in government know that it is difficult, but we make choices, and then we are held responsible. Conservative Members understand that, because we were held responsible.

[John Glen (Salisbury) (Con)]

On 20 November 2023, when I was the Paymaster General, I made some comments about the winter fuel payment. The right hon. Member for Bristol North West (Darren Jones), who is now Chief Secretary to the Treasury, wrote to the Chancellor at the time and asked whether we could confirm that we would not be removing the winter fuel payment, because pensioners would be deeply concerned. My view, having had that put on a list of options when I was Chief Secretary, was that there was no way it would be right to do so. I knew, for example, that 71% of pensioners with a disability would lose that valued and completely necessary extra funding—there was not a rationing mechanism that was efficient for the poorest pensioners. I expected to be held to account, which was why I did not do it. I was therefore somewhat surprised when, 25 days into a Labour Government, they reversed the policy that they had challenged me about several months before.

[Joy Morrissey]

My right hon. Friend makes an excellent point, and one that I was going to make. This is about choices, and it is about the most vulnerable—the disabled pensioners who we did not have a way to test for. There was no mechanism to protect them, and I am very glad that my right hon. Friend chose to protect the most vulnerable disabled pensioners. By protecting everyone, we ensured that the most vulnerable were protected, and that was a tough choice that we made when in government. To be honest, I expected a Labour Government to make the same kind of choice, to protect the most vulnerable disabled pensioners, who have been negatively impacted by this choice. I would have expected better from a Labour Government.

--- Later in debate ---

[Matthew Patrick]

The hon. Gentleman uses the words “suppose” and “sorry state”. It is no wonder Conservative Members lost; they were in total denial about their failure for this country. Now is the right time to end the status quo, end the incessant decline under the Conservatives and put a huge amount of investment back into our NHS. I, for one, am proud that we have had five months of falling waiting times. I want Conservative Members to welcome such good news for our NHS—news that helps all the people in this country.

[John Glen]

The hon. Gentleman is very generous in giving way. I have listened carefully to the speeches this afternoon with respect to our tenure in office and regrets that we will have time to reflect on. I accept that. However, having been a Minister and a Parliamentary Private Secretary for 12 years, I want to tell the hon. Gentleman that though making the decision to remove the winter fuel payment for that population may be desirable— I acknowledge and have said that it may be desirable for people in the higher levels—it needs to have a mechanism or a proxy to verify what would be fair and which vulnerable people would be affected. I put it to him that if somebody only has an income of £13,500, they are in a state of vulnerability that means that no Government should take that away. The choice we made was based on the options available. If there had been an easier way of doing that at a higher level, I would have been sympathetic to that. Those are the real choices that one actually has to face in government.

[Matthew Patrick]

I am grateful to the right hon. Member, including for the way in which he puts his point. He will hopefully share my relief, then, about the household support fund, which I often find my constituents do not know about. The fund is not reported heavily in the media, so it would be wise for us all to take the opportunity in this debate to reiterate that that support is available to people who are just above the threshold and who might just miss out on accessing the winter fuel allowance, so that they know that. I signpost many concerned constituents to Citizens Advice Wirral and support them in accessing the money available through the household support fund, hundreds of millions of pounds of which has come from this Government.

Conservative Members rightly talk about the need to relieve pressures and protect the most vulnerable. However, I question where their outrage was when their Government, back in 2021, broke their manifesto commitment and suspended the triple lock; I wonder where their outrage was when their leader recently suggested that we should look at means-testing access to the state pension; and where was their outrage when only months ago the shadow Chancellor suggested scrapping the triple lock all together?

It is Labour politicians who are committed to protecting pensioners’ incomes and delivering support to those in need. I have mentioned the household support fund, and we are ending the Tories’ disastrous plans to drag a record number of pensioners into paying income tax by uprating personal tax thresholds from April 2028. Unlike the Tories, we have an iron-clad commitment to the triple lock, which will see the state pension of millions increase by more than £470 this year. I would like to hear them welcome that. We are supporting those caring for their loved ones by increasing the income threshold for carer’s allowance so that more than 60,000 carers will benefit by the end of this Parliament.

Times are tough and this Labour Government have made tough decisions to get our country back on track. As I mentioned, NHS waiting times have now fallen for five consecutive months. We have not had that for a long time. We have made a deal with GPs so that healthcare in the community works for everyone, we have targeted income support to those in the most difficulty and we have launched the biggest ever drive to ensure that those who can claim pension credit do so, with almost 50,000 more pensioners now getting the money they are entitled to. The Tory status quo meant only decline for this country. With the Government’s plan for change, we will get the country back on its feet.

Oral Answers to Questions

John Glen Excerpts

Monday 17th March 2025 Commons Chamber

[Andrew Western]

My hon. Friend is correct to highlight the importance of tackling economic inactivity in order to drive up economic growth. This Government understand the negative effects that unemployment can have on mental health, particularly among young people, which can impact future prospects. The youth guarantee will help address barriers faced by young people to ensure that they can access quality training opportunities and apprenticeships or help to find work, boosting their confidence and giving them the very best chance of success in the workplace.

[John Glen (Salisbury) (Con)]

A few weeks ago, I visited Salisbury jobcentre and I met Kirstie Reakes and George Thornley, who are helping me organise a jobs fair on Thursday 8 May. They could not have been more helpful. Their encyclopaedic knowledge of the local jobs market and businesses was impressive. Will the Minister congratulate them and thank them for the help they are giving me with the jobs fair in Salisbury Guildhall on 8 May? Will he also reflect on what incentives jobcentres could have to reach out to businesses and deepen their knowledge of local labour markets?

[Andrew Western]

The right hon. Gentleman is correct to raise the issue of jobcentres reaching out to local employers. We know that we have a significant issue with whether the jobcentre is the vehicle of choice to advertise local job opportunities. That is a long-standing issue that we are keen to address. I am delighted to congratulate his local jobcentre on the work it is doing to promote the jobs fair.