Pension Schemes Bill

John Milne Excerpts

Wednesday 3rd December 2025 Commons Chamber

[John Milne (Horsham) (LD)]

I shall speak to new clauses 8 and 13, which stand in my name, among others.

With its title, the Pensions Schemes Bill, this piece of legislation was probably never destined to grab headlines—sorry, Minister, but that is the case—which is a pity, because it contains some genuinely intelligent measures, developed over years with significant cross-party support, and could go some way to boosting UK plc, as we all want. Directing more of our pension fund savings into UK investments is a long-overdue mission; however, it is not just about what you do, but how you do it, and as I argued in Committee, I am not convinced the Government have struck the right balance with their plan to take sweeping powers of mandation. Yes, we should be concerned about very low pension fund investment into the UK, but the reason behind that is not some form of trustee treason; rather, it is a logical and predictable response to the UK’s regulatory framework and a market that over-emphasises costs, which discourages any kind of active management strategy.

Mandation is the wrong solution. There are other ways to reach the same outcome through partnership, building on the consensus achieved in the Mansion House accord. I strongly urge the Government to look again at creating more ready-made investment vehicles. The biggest risk in mandation is that it could force pension funds to make sub-optimal investments, because they are chasing the same limited supply of UK assets as everyone else.

In addition to more support for innovation and start-ups, like others who have spoken today, I see a fantastic opportunity for large-scale investment in social housing, care homes, high streets, environmental schemes and infrastructure. That would bring huge social rewards, as well as boosting growth, which is the Government’s mission. That will not happen, though, unless the Government help local and regional authorities to pump prime the system with a stream of investable products. To me, that seems like a small ask, and I hope the Government will reconsider.

I am pleased by Ministers’ positive response to some of the amendments we fought for in Committee. That does not always happen. The scandalous treatment of pre-1997 pension savings has been left unresolved for decades, so I welcome this Government being the first to act and their decision to link compensation payments from the PPF and FAS to CPI inflation. Of course, this is far from a complete solution, and indexation applies only going forward, but given that until now there had been no sign of compensation of any kind or of any group, I will take this as a partial win. I pay tribute to persistence of all my Horsham constituents who have raised pre-’97 indexation with me time and again.

Compensation by the PPF is certainly a solution, but we are in danger of missing a one-off opportunity to access pension surpluses. The Bill will give trustees increased access to surplus savings, which have built up in many funds in recent years, which is good, but without some sort of extra push from the Government, it seems to me likely that none or little of the money will go toward pre-1997 pension injustices. In the Work and Pensions Committee last week, I asked the Secretary of State whether he truly believed that the Bill as it stands would help people, and I got a “Yes, Minister” kind of answer:

“I am not going to call stumps on brand new legislation before it has had a chance to have an effect, so let’s see what effect it has.”

That is not good enough. The companies that have not been shamed into action in a quarter of a century are not miraculously going to discover altruism today. Some form of compulsion is required.

I hope that the pre-1997 section will be taken further in the Lords, where the balance of power gives the Liberal Democrats somewhat more leverage than we had in Committee. [Interruption.] It is a wonderful institution—so democratic, is it not? I also welcome the decision to abolish the Pension Protection Fund levy, which had become effectively redundant; that was the subject of another Lib Dem amendment. That move will reduce hidden fees for pension schemes and pass those savings directly to savers.

However, other things are still missing. As someone with a professional background in pensions communications, I argued in Committee for the Government to enable free universal pension guidance at the age of 40, among other stages, when there is still time to change outcomes, rather than waiting all the way to the moment of retirement itself. There is a ticking time bomb of pension inadequacy that must be addressed today, and pensions guidance is an incredibly low-cost way to improve outcomes. The Pension Wise service would be an excellent vehicle for that, and it is ready and waiting for us to use it. If the Government will not back new clause 8, will the Minister meet with me and members of industry to look at how an auto-enrolment trial could finally move this proposal forward?

That brings me to new clause 13, tabled by myself and my hon. Friend the Member for Torbay (Steve Darling), which seeks to strengthen the people-focused elements of the Bill by using pensions services to offer free, accessible guidance to the groups we know are under-saving. If we look at minority ethnic savers, we see that their pension pots average £52,000—less than half of the £115,000 that applies to white British savers. Let us also consider that women are on average set to retire on just £13,000 a year, compared with £19,000 for men—a third less. Disabled workers are approaching retirement with average pension savings of £47,980—just a third of the UK average. The Government rightly say that they want people to be independent, financially resilient and able to pay their own way, but that cannot happen if entire groups—women, ethnic minorities and disabled people—are destined to retire on a fraction of what others are provided with.

There is a lot to like in this Bill, but legislative opportunities come up only once in a blue moon, and a lot more could be done here. I ask the Government to support new clauses 8 and 13.

[Elaine Stewart (Ayr, Carrick and Cumnock) (Lab)]

I rise to speak to new clause 22. Let me begin by recognising the work of the Hewlett Packard Pension Association, particularly the work of Patricia Kennedy from Ayrshire—she hoped to be in the Gallery today, but she was too ill to travel. Patricia has been a driving force to keep this issue alive, but of course this is not about only one individual; it is about all pre-1997 pensioners.

Earlier this year, I was proud to host Patricia and many of her fellow campaigners in Parliament. That meeting made clear the human cost of inaction—pensioners seeing their incomes erode for decades, and families struggling because the system has failed them. That is why new clause 22 matters. At its heart, the new clause sets a simple principle: pensions earned before 1997 should not be left to wither away. It also follows a principle that the Government have already adopted.

I welcome the Minister’s commitment in his opening remarks to work with trustees to ensure that schemes in surplus, such as Hewlett Packard Enterprise, work to benefit pensioners. If good co-operation is not forthcoming, will the Government look to other legislative means to correct this course? Many of these schemes are backed by profitable multinationals, yet discretion has failed. It has failed with Wood Group, Hewlett Packard Enterprise, STMicroelectronics, Atos/Sema, American Express, AIG, Pfizer, 3M, Chevron, NCR Scotland, Lloyd’s Register, and Johnson & Johnson.

Some pensioners have gone for 10, 15 or 23 years without a single increase. That is not fairness. NC22 would correct that. I am sure all Labour Members agree that pensioners should not depend on the whims of employers, and we should be wary of accidentally creating an entrenched situation in which pensioners in failed schemes receive protection while those in solvent schemes remain unprotected—to me, that seems inconsistent. New clause 22 would address that inconsistency, ensuring that every pensioner has the security and dignity they deserve, regardless of when their service was accrued. I thank the Minister for meeting me to talk over my worries about this Bill.