Local Government Pension Scheme

Melanie Onn Excerpts

Monday 24th October 2016 Westminster Hall

[Mr Jones]

I thank the hon. Gentleman for his intervention but, as I said at the outset, we are giving local authorities more and not less control over their investments.

[Melanie Onn (Great Grimsby) (Lab)]

Will the Minister explain what happens if an LGPS fund cannot pay its pensions?

--- Later in debate ---

[Mr Jones]

As the hon. Gentleman knows, that is covered in the guidance, and I will write to him at further length on that point.

The hon. Gentleman asked for clarification on whether local government procurement guidance applies to the LGPS. Our guidance on pension scheme investments is entirely of the same framework as the guidance issued by the Cabinet Office on public procurement. Both operate within the wider framework of national and international law.

The hon. Gentleman also mentioned tobacco. It is our position, as is clear from our response to the consultation on investment, that decisions on matters such as whether to invest in tobacco are for individual pension funds provided that they comply with the broad principles in our guidance.

The hon. Member for Birmingham, Erdington (Jack Dromey) mentioned localism. Our reforms are entirely consistent with localism. We have removed the petty, arbitrary caps on different types of investments put in place by the Opposition some years ago and given local authorities real freedom to decide how they invest their pension funds.

In summary, I reassure the House that investment decisions will remain for administering authorities. The Government are challenging local authorities to be independent and ambitious, subject to local democratic control and appropriate safeguards. We have no intention whatever of gambling with money that has been set aside to pay pensions.

[Melanie Onn]

I am a former trustee of a pensions scheme, and it was made clear to me on repeated occasions that the legal duties and responsibilities fell to those people around the table who were privy to all the investment information as well as the contributors to the scheme. My overriding question about the regulations and the Government’s involvement in the LGPS scheme, as opposed to private schemes over which they have no direct responsibility or involvement and do not interfere, is whether LGPS trustees’ rights and responsibilities are being eroded or undermined in any way. Does that set a precedent? That would concern me.

[Mr Jones]

I would like to reassure the hon. Lady that the changes are in no way intended to diminish the role of individual pension funds or the people who represent members. [Interruption.] She is commenting from a sedentary position, but we will have to agree to disagree on that point, bearing in mind what I have said previously.