Pension Schemes Bill

Lord Lucas Excerpts

Report stage
Monday 16th March 2026 Lords Chamber

[Viscount Thurso (LD)]

My Lords, I rise briefly to offer support from these Benches, particularly for Amendments 24 and 25 and more broadly across all the amendments that the noble Baroness indicated.

In particular, I was taken by Amendment 24 and the idea that value for money regulations should include, among other things, the

“accuracy of recorded contributions … reliability of valuation data”

and the “efficiency of administration”. As any poor civil servant who is currently trying to get hold of a pension administered by Capita is finding out, these things are not a given. Making sure that the small number of quite large firms in the marketplace actually deliver with the necessary competence is a really important part of whether pensioners get value for money. As I say, I broadly welcome and support the amendment.

[Lord Lucas (Con)]

My Lords, it is a long time since I was managing big pension funds in the 1980s. In those days, we were in the happy position of considering it a bit underweight if you had less than half your money in British stocks; now, it is 5%. It is extraordinary for politicians to have done that to the economy—and it is because of us that it has dropped. The way we have framed our regulations and organised how pension funds are assessed has, over time, resulted in that extraordinary diminution. This has left us with a stock market that is cash negative and a City that is immensely weaker than it would be. We will address this later, but the solutions to that problem perhaps lie in this part of the Bill.

If we communicate better with pensioners and say to them, “Do you really trust the country you live in, are part of and benefit from so little that you want only 5% of your pension in it?”, I think we would get a positive response to the idea that perhaps that figure should be higher. Through the mechanisms in this part of the Bill, we could ask pension fund managers to respond to that, and I hope that we would be able then to get away from the bits in the Bill about compulsion and direction that are causing difficulty to my noble friends, whose concerns I share. I think we would get a good response if we informed members of pension funds, as my noble friend said, so that they could take good decisions, and then empowered them to say that they want to back their own, with a good chunk of their money going to improve, invest in and support this country and take it forward. This bit of the Bill would be a good place to do that.

I hope the Minister can confirm that, in the governance aspects of this, it will be expected that pension fund managers should vote their shares. It is extraordinary that we have moved to a position where the owners of companies just do not vote—they do not use that power to decide what their opinion is on what companies have been doing; they merely buy and sell. That is a huge diminution in the mechanism by which companies are held to account. We need people to vote and to take an interest. Having a direction on pension funds that they should participate and be a real part of the corporate governance process would be a useful thing to come out of this Bill.

[Lord Davies of Brixton (Lab)]

I have three points. First, I profoundly disagree with the noble Lord, Lord Lucas. To pin the blame just on politicians lets everyone else off scot-free. It is more like Murder on the Orient Express—everyone had a hand. My particular favourite is the accountants, who had a big hand; the way they defined accounting for pension costs was pernicious. Let us not blame just the politicians.

Secondly, one cannot not be in favour of value for money. Obviously, we are all in favour of people getting value for money from their pension schemes. However, I think the Government underestimate the difficulty of providing something useful. As the noble Baroness, Lady Altmann, pointed out, there are more than two or three factors to be taken into account. It is particularly difficult when one starts including prospective factors—how are these to be judged? It is very difficult, and it is not just the factors. The pension holders’ circumstances vary so widely. How can there be a simple, straightforward way of assessing whether someone has had value for money when their needs are so different from those of other people who are saving for their pension?

Thirdly, I apologise for not being present in the Chamber to support the amendment in the name of the noble Viscount, Lord Thurso, in the previous group. I realise I am cheating here, but I was elsewhere. I had not realised that one of the groups had disappeared; otherwise, I would have been here and supported his amendment.

Pension Schemes Bill

Lord Lucas Excerpts

Report stage
Thursday 19th March 2026 Lords Chamber

[Lord Lucas (Con)]

My Lords, we know that a much higher percentage of pension fund assets could happily be invested in UK assets; indeed, that was the case when I was managing pension funds. It is not the case now entirely because of what politicians have done to the system. We should seek to undo that, not fudge it, as the noble Lord, Lord Vaux of Harrowden, said.

My recommendation to the Government is that, rather than giving themselves power, they should give pensioners and investors in pension schemes power. There are structures in the Bill that allow pensioners to express their opinions on what their money is being invested in, but nothing that gives any effect to that. I suspect that most of us receive our annual returns from the pension funds we are part of and put them straight in the bin, because there is nothing we can do with them. We ought to be in a position to do something that would have an effect. I recommend that the Government choose that route rather than the one they have chosen.

[Baroness Stedman-Scott (Con)]

My Lords, of all the amendments we have tabled and discussed on this Bill, for me, this group is the most important. Mandation is, rightly and understandably, the most contentious part of the Bill. I am grateful to all noble Lords who have helped raise awareness of this issue, which, as I am sure the Minister is aware, has garnered a lot of attention—and criticism—outside of this place.

The ABI has written to the Minister in the other place, Torsten Bell, to warn him of its “serious concerns” about the mandation power, saying that it is “not necessary” for the Government to mandate investment. It has asked the Government to withdraw this part of the Bill. Pensions UK has been unambiguous on this point. It too has called on the Government to remove this power from the Bill, warning that it would harm

“free and open market competition aimed at driving better saver outcomes”.

It has said that mandation would

“put those outcomes at risk”.

More recently, Paul Johnson, formerly of the IFS, wrote strongly against mandation in an article in the Times. Just the headline and strapline will give the Minister all the information she needs:

“Telling pension funds where to invest will not end well. The government’s desire to boost UK assets is understandable, but overriding the fiduciary duty of trustees crosses a line”.


The industry is clear, the experts are clear and much of this House is clear that the Government should not be directing private sector investment. It is obvious that this power overrides the fiduciary duty of trustees. This is a radical step, and it establishes the principle that it is appropriate and desirable for Governments to tell schemes how to invest to meet their own political objectives. The Government are right to want investment in UK assets—indeed, I am sure that no one in this Chamber would not welcome more money in UK assets. However, if the picture is not where we want it to be, the question for the Government is: why? Why is the UK not attracting that capital? What barriers exist? What reforms are needed?

Instead of doing that work, the Government have reached for a shortcut, a reserve power that is really a threat to compel investment. This is reckless. It sets a dangerous precedent, and the Government’s central defence—that they do not intend to use the power—raises two unavoidable questions. First, if they never intend to use the power, why are they legislating for it? Secondly, how can the Minister assure us that the power will not be used when they will not be in office for ever? This power is going into law, and I am afraid it will outlast the Minister and indeed all of us. The noble Baroness cannot speak for future Administrations, or indeed political parties such as Reform, God help us, which has signalled a great willingness to direct investment. The Government are handing this power not merely to their own Ministers but to future Ministers.

I will not detain the House any further than to say that this power must be removed. It is a massive overstep from the Government and, despite all the assurances of the Minister, no one is yet convinced that this can remain. Industry rejects it, experts have expressed serious concerns about it, and the Minister must remove it. I am sure she has listened to all noble Lords’ contributions. As my noble friend Lord Wolfson said, we must remove this Robert Maxwell power. We on these Benches, and I am sure others, will support the noble Baroness wholeheartedly if she seeks to divide the House on this matter.

Pension Schemes Bill

Lord Lucas Excerpts

Report stage
Monday 23rd March 2026 Lords Chamber

[Lord Lucas (Con)]

My Lords, I am delighted to see this series of requests for reviews. I support my noble friend’s Amendment 157. I support also my noble friend on the Front Bench in his Amendment 159, which he will no doubt speak to in due course. It echoes what the noble Lord, Lord Vaux of Harrowden, said on a previous day: we really need to understand the causes of the drop in investment in the UK and address them, rather than try to apply some layer of instruction on top without dealing with the foundations.

I am particularly fond of Amendment 170A. As was shown by the last Division and previous Divisions, I feel that the Government are getting themselves into some difficulty on the question of mandation. Surely it should not be the Government telling pension funds what to do—it should be their members. Their members should have a say in and influence over the question of whether more should be invested in the UK. There is also the question of whether we should invest more in protecting us from climate change—again, that should be decided by members; it should not be mandated centrally. However well-intentioned this Government may be on mandation, there is such huge potential for it going wrong under future Governments. Members are the people who have to suffer if their investments go wrong; they should be the people whose views are taken into account.

[Lord Palmer of Childs Hill (LD)]

My Lords, this group brings together a number of proposed new clauses on the wider health and fairness of the pensions system: public service pension availability; intergenerational fairness; the impact of the Act on retirement incomes; barriers to UK investment; and member engagement and rights. In addition, my amendment proposes a new clause to address the fairness of police pension survivor benefits forfeiture rules. Taken together, the amendments reflect a wider concern that major structural reform should be accompanied by a proper review, transparency and evidence.

On these Benches, we believe that there is obvious merit in asking the Government to come back to Parliament on these questions, whether the issue is long-term sustainability, actual retirement outcomes or the obstacles that may prevent productive investment. They are not hostile to reform; they are part of legislating responsibly in an area as consequential and complex as pensions. On these Benches, we are minded to support Amendment 157, moved by the noble Baroness, Lady Neville-Rolfe.

Through the amendment in my name, I am pleased to have raised the issue of police pension survivor benefits in this Chamber. I raised the matter in Committee, and I feel strongly about it. I appreciate the Government’s response to our earlier discussion, so I will not pursue the amendment further today.