Pension Schemes Bill

Katie Lam Excerpts

Wednesday 15th April 2026 Commons Chamber

[Neil Duncan-Jordan]

Okay.

We must accelerate the transition away from fossil fuels, even though some Members on the other side of the House seem to disagree with that. We must deliver long-term energy security and bring down bills through domestic green energy, but not only that. In this moment of deep crisis, the Government must pull every lever they can to lift the weight of the cost of living crisis, and that must include gearing our pension funds towards a fairer, more prosperous future.

[Katie Lam (Weald of Kent) (Con)]

As my hon. Friend the Member for Faversham and Mid Kent (Helen Whately)—my constituency neighbour—has repeatedly and effectively highlighted, the mandation power in this Bill is a shocking power grab. She is also right to say that, regardless of the apparent guardrails that the Government have now introduced, it is still totally indefensible. Those in the other place are absolutely right to return the Bill to us to reconsider, and it is in support of Lords amendment 15 that I will speak today.

The power to direct investments is not just flawed in its implementation; it is wrong in principle. When people put aside money for their retirement and entrust it to a company to manage, they very reasonably expect their savings to be invested by whatever company they have chosen, and in line with whatever instructions they have given about their preferences and risk tolerance. Shockingly, but perhaps not surprisingly, this Government do not agree. Instead, they think that Government Ministers should have the power to direct pension investments. They want to give themselves the right to direct private pension providers to make decisions that are not in the best interests of their clients.

If Ministers think that people’s money should be invested in British assets, even if doing so will leave them with less money in their retirement, this Bill will give them the right to force private companies to invest accordingly. You can work hard for a lifetime and save a little at the end of every month, but at the stroke of a pen, Ministers will be able to decide where that money goes, even if that means that you will end up with less. The Government are right to identify that British assets are not always the most attractive investments, but the solution is not to force people to invest in them anyway; it is to make the British economy a better place to operate and grow, to allow people to take risks and to allow businesses to do what they are good at, so that people choose of their own free will to invest here.

The money that people earn belongs to them, and it is theirs to do with as they wish. It is not simply a tool that this Government or any Government can use to achieve their ideological aims, and that should be true of every pound that people earn. It is a complete farce to suggest that, by limiting the extent to which Ministers can mandate how people’s money is invested, the Government have addressed concerns about this mandation power. These so-called guardrails will be cold comfort to people across the country who are worried about whether they will have enough money to retire comfortably, and who are worried that their efforts will be frustrated by Ministers pursuing ideological aims.

I hope that Members across the House will reject this power grab altogether. It cannot be right to punish those who work hard and save what they can.

[Chris Vince (Harlow) (Lab/Co-op)]

I thank the Minister and the shadow Secretary of State, the hon. Member for Faversham and Mid Kent (Helen Whately), for opening this debate. I was not expecting it to be quite so lively, so I will try to add a bit of animation to what was initially going to be quite a dry speech from me. [Interruption.] That is hard to believe, I know, but I promise that I will mention pensioners in Harlow at least half a dozen times to make up for it.

I rise to speak in opposition to Lords amendments 6 and 77, but before I do so, I would like to say that I welcome this Bill, which will boost the income of pensioners receiving minimum pensions through a workplace scheme by the largest possible amount. It is one of the many things this Labour Government are doing to support pensioners in my constituency of Harlow—that is one mention—with rising living costs. That can be coupled with fixing our NHS after years of austerity, protecting the triple lock pension—that means the new state pension is increasing by £575 this year and the basic state pension by about £440—and launching the largest pension credit drive in history, which I think we will all agree is hugely important.

Lords amendment 6, which I am sure is well-intentioned, would require the Government to carry out an interim review of employer contribution rates and for the Secretary of State to publish guidance. However, as the Minister said in his opening speech, this Lords amendment is redundant, because the Government have already committed to that and will do so later in the year.

I am going to make the next bit, about Lords amendment 77, a little more racy just to entertain Members. Let me take them back, if I may, to the summer of 2010, when I was in a pub with a friend of mine—I will not mention his name—who turned around and said to me, “You’ve got gold-plated pensions, you teachers.” I am not saying this is necessarily the intention of the amendment, but it is something it could do, and it always frustrates me when we create a divide between people receiving public sector pensions and people receiving private sector pensions. I would say that public sector workers, including teachers, and I used to be a teacher—the Chris Vince bingo card is going well today—work incredibly hard and contribute a huge amount to their pensions.

This does not mean that it is not right to review public sector pensions—we have to do that as a Government, as the right and proper thing to do—but it is worth bearing in mind, going back to what I said about Lords amendment 6, that we are already doing so. I am sure Lords amendment 77 is well-intentioned, but again it is redundant. In general, I say to people tempted to criticise those receiving public sector pensions that the duty of a Government should not be to make public sector pensions worse, but to make private pensions better, so that everybody has the opportunity to save and be successful in their retirement.

I want to make a few cheeky requests of the Minister while he is in his place. [Interruption.] The shadow Minister, the hon. Member for Wyre Forest (Mark Garnier), is chuntering, but I am going to be nice to him because he has fantastic hair. The last time I spoke in this place, he kindly said that I had made a really good point, which was incredibly kind of him. It must have been by mistake, but who knows?

I have two requests for the Minister. The first is that he will continue to work with the Secretary of State for Health. The No. 1 thing pensioners in my constituency of Harlow talk to me about—I think I have mentioned them only twice in this speech—is the importance of our NHS. Given the wait times that pensioners have had to face at the Princess Alexandra hospital in Harlow, I am delighted that we are seeing those wait times coming down, because we want our pensioners not only to have saved and be financially stable in their retirement, but to be healthy.