Pension Schemes Bill

Mark Garnier Excerpts

Monday 27th April 2026 Commons Chamber

[Andrew Western]

I recognise, as the shadow Secretary of State set out, that there has been a great deal of consensus on many aspects of the Bill, and that we are wrangling merely over this one remaining issue. The Opposition argue that this power is wrong in principle, but we fundamentally disagree. We have had this debate on a number of occasions, including on Second Reading. I set out in my opening speech why this continues to be the Government’s position, and we have heard the arguments against.

I gently point out that the shadow Secretary of State’s letter to industry last week conceded that in the absence of this sort of power, funds are understandably cautious about being first movers, and that is a legitimate concern. That is the collective action problem that we have. The Mansion House compact has been running since 2023, but progress has been modest. The industry has identified competitive pressure to keep costs low as the single biggest barrier to delivering on its own commitments. In other words, providers want to diversify in their members’ interests, but they risk being undercut on cost by competitors that do not. The reserve power gives the market confidence to move together.

We have also heard that the power undermines fiduciary duty—it does not. Trustees’ duties of loyalty and prudence, and to act in members’ best interests, remain.

[Mark Garnier (Wyre Forest) (Con)]

With the greatest respect, the Minister is talking nonsense. At the end of the day, every trustee has a fiduciary duty to get the best return for their members. By putting in these mandation powers, the Government are fundamentally going against the most basic principle of the City of London, which is dictum meum pactum—my word is my bond. The Government entered into a pact with the industry, and they are now reneging on that pact by introducing mandation and not allowing the industry to move things forward. The Government are so wrong on this whole point. The Minister should withdraw the mandation powers and get rid of clause 40.

[Andrew Western]

I am sorry to disappoint the hon. Gentleman, but that is not going to happen. We have to deal with the collective action problem that we are facing, to ensure that providers can move forward with the commitments that they have made. The power gives them assurance, but we hope that we will never need to use the power. The fact of the matter is that the industry requires that certainty; without it, it will not be able to move forward, given the collective action problem that exists. That point has been accepted by the shadow Secretary of State.