Pension Schemes Bill

Lord Ashcombe Excerpts

Thursday 19th March 2026 Lords Chamber

[Lord Fuller (Con)]

My Lords, those people who have done the right thing and saved for retirement have made a bargain with the state: in exchange for a little help on the way in, the state will be relied on a little less on the way out—that is the deal. The responsibility for finding people to look after your money lies with the individual and the trustee or investment managers they appoint. On that simple truth, London has developed global leadership in asset and investment management, and the entire City ecosystem has created a tax gusher that pays for defence, schools and hospitals. We should not place it or its reputation under threat.

We have heard a lot from the Dispatch Box over the last 12 months or so about the sort of investments that the Government think we should invest in. We need to learn some lessons from history. One such investment is green schemes, forgetting that when they tried this under political direction in Sweden it created the $5.8 billion Northvolt disaster and all the public sector pensioners lost their shirts. The Minister from the Dispatch Box lionised the large Canadian public sector schemes as the model that should be followed. Last year, their investment returns went down by 5%, at the same time as our own LGPS went up by 9%.

Ministers want schemes to backfill UK infrastructure, and perhaps steel, which we now learn could cost us over £1 billion in a little over a year—money that will never be seen again—or carbon storage and passive funds, which, by arithmetic, lead you into bubbles or into high-risk private assets. At 5 am this morning, the Financial Times published an excoriating demolition of the claims that private equity funds do as well as the Chancellor claims, especially as the J-curve gets stretched out beyond 10 years. I could go on, but I will not.

The point is that, while Ministers want to pick winners, they have been selling lemons. The pound shop pundits are trying to force-feed the riskiest parts of the market—the bits the other professionals turn their noses up at or consider are not right for the man in the street—down the throats of those for whom taking excessive risk is not necessarily the right thing. The Government’s job is to create the environment for the best and most attractive investment ideas to come forward, not to beat pensioners with a stick and strong-arm them into financing their high-risk pet projects, with high fees and uncertain returns.

But, worst of all, if mandation does come, it will create the sort of value-sapping moral hazards and conflicts of interest that will allow the most poorly performing managers to have a “get out of jail free” card—“It was that Torsten Bell chap what told me to do it, guv”—while trashing the global reputation of the UK asset management business and imperilling that tax gusher we all rely on. But, ultimately, it will be the little guy who pays the price, poorer long after Rachel Reeves and Torsten Bell have become a footnote in history. It is our duty to stop this, and we must.

[Lord Ashcombe (Con)]

My Lords, I declare my interest as an employee of Marsh, whose sister company Mercer is a pension consultancy, master trust provider and signature to the Mansion House Accord. I speak in strong support of this group, beginning with Amendment 52, which would remove the power to mandate asset allocation while preserving the requirement on scale. This is a targeted, proportionate change. It keeps the legitimate objective of ensuring sufficient scale in the market without stripping trustees of the fundamental responsibility to make investment decisions.

I have never supported—and it has become abundantly clear in recent weeks that the bulk of industry does not support—the Government’s proposed power to mandate asset allocation. I have listened carefully over the past weeks to Ministers in both Houses, who say that these clauses are simply a reserve power intended to ensure that the Mansion House Accord operates. Even accepting that characterisation, the House should not lose sight of two important points. First, the schemes that signed up to the accord did so in good faith and with trustee agreement. Secondly, those signatories did so on the basis of explicit caveats—caveats that recognised trustees’ fiduciary duties, the necessity of a reliable pipeline of assets and the imperative that the market shifts from a narrow focus on cost to a broader assessment of value across the whole investment chain, including by clients.

It is therefore deeply disappointing to see the Government invoke the Mansion House Accord agreement as though it represents blanket industry support for intervention in private finance and trustee decision-making. It does not. Conflating a voluntary conditional industry commitment with a license to centralise investment allocation decisions risks doing grave damage to good governance and to member outcomes. For these reasons, I urge noble Lords to support these amendments, remove the dangerous power to mandate asset allocation, keep the focus on scale and let trustees, acting with their fiduciary and statutory duties, continue to determine the investment strategies that best serve their members. These amendments achieve that balance.

[Baroness Coffey (Con)]

I signed Amendment 52 in the name of the noble Baroness, Lady Bowles of Berkhamsted, because—let us be candid about this—this is not the Government’s money. There seems to be an attitude that, because the Government use tax relief in other ways to encourage people to invest in private pensions, all of a sudden they are somehow going to tell people what to do with their cash—instead of putting government taxpayers’ money into those projects—just because that cash is not being invested in projects the Government want.

Even auto-enrolment, which has been a force for good, is not mandatory; people can opt out. There has always been a recognition that it is somebody’s salary, and so it is their choice what they do with their take-home pay. The approach in the Bill goes completely against that because—I will not use unparliamentary language—the Government are almost blind to the fact that it is not their money.

My particular concern is that there never was a human rights impact assessment. I have written to the Attorney-General to understand that, because I think this could well be covered, in effect, as personal property under Article 1, Protocol 1 of the ECHR. Yet the Government seem quite happy to say that this meets the human rights test. We have never seen that backed up, so I would be grateful if the Minister could publish any assessment they have done before we get to Third Reading.

To be straightforward, this is the wrong approach. The voluntary accord is the right approach, which is why I will support the amendment if it is tested.