Pension Schemes Bill

Lord Vaux of Harrowden Excerpts

Wednesday 22nd April 2026 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, I support the noble Baroness, Lady Bowles, in insisting on the omission of mandation in Motion A1. The proposal has made the Government unpopular in the City and, as an ex-businesswoman and ex-pension trustee, I urge Ministers to think more radically and get rid of the power altogether, even in its constrained form.

Moving on, I thank the Minister and the Minister of State, Torsten Bell, for Amendments 85C, 85D and 85E in Motion D, which respond positively to my proposal for a review of public sector pensions. The work promised by the Government Actuary’s Department should provide the transparent analysis of this complex area that I have been calling for, with the support of the Centre for Policy Studies, the economist Neil Record, my noble friends Lady Noakes and Lord Moynihan of Chelsea, and the coverage in the Times and the Telegraph. It was reassuring to know from the Minister that the important complementary work responding to the Public Accounts Committee’s concerns about the whole of government accounts 2023-24 will be published within the one-year timeframe in the amendment.

I have been addressing not just a technical matter but serious problems, such as intergenerational unfairness and the long-term affordability of our important public service pensions. I trust that, as a result of the new work, we will be able to tackle the issues better and in a much more informed way.

[Lord Vaux of Harrowden (CB)]

My Lords, I will briefly add my support to Motion A1 from the noble Baroness, Lady Bowles, to remove the mandation reserved power. On Monday, the Minister told us:

“On the question on fiduciary duty, nothing in the Bill disapplies trustees’ existing duties of loyalty, prudence and acting in members’ best interests”.


Her argument was that

“the savers’ interest test allows a scheme to seek an exemption if it can show that compliance would cause material financial detriment to members”.—[Official Report, 20/4/26; col. 591.]

I hope that noble Lords can see the rather fundamental flaw in that argument. Not causing “material financial detriment” is very different from acting in members’ best interests. Would the Minister put her pension savings into a fund that promised only that it would not cause material financial detriment? Of course she would not, but that, as she has said, is the standard to which the mandated asset allocation will be held. So, contrary to what she keeps claiming, the power to mandate asset allocation, even with the latest proposed constraints, quite clearly undermines the fiduciary duty of trustees to act in members’ best interests, and it has no place in pension scheme regulation.

[Lord Davies of Brixton (Lab)]

I will make just two points. First, on the issue of mandation, we need to be clear. I am really concerned about the absolutist no mandation point. There is, of course, an issue to discuss as to how effective these measures would be and what effect they would have on trustees’ responsibilities, but it is important to remember that we are talking about tax advantage provisions, where there is a substantial cost to the Exchequer, so it is entirely reasonable, in principle, for the Government and the legislation to lay responsibilities on those tax advantage arrangements. Saying that mandation is wrong in and of itself is clearly incorrect. As a matter of public policy, it is entirely right that we should legislate to place requirements on tax-advantaged investment arrangements. People can invest their own money in any way they wish but, in return for the tax advantages, there are equal responsibilities.

The second point I want to make is that we need to be clear—it may be of some comfort to my noble friends—that Amendment 77 does not produce a review of public service pensions. It just requires important information to be published within a one-year timescale. I said in Committee that I would welcome a review of public service pensions, but this is not a review of public service pensions. It is just a requirement on the Government Actuary to produce a report.