Pension Schemes Bill (Sixth sitting)

Sarah Edwards Excerpts

Committee stage
Tuesday 9th September 2025 Public Bill Committees

This amendment clarifies that the reporting obligation under subsection (11) applies to the first regulations introducing the substantive asset allocation requirement (rather than to preliminary regulations about procedure and so on).

[Sarah Edwards (Tamworth) (Lab)]

I beg to move amendment 276, to clause 38, page 42, line 41, at end insert—

“(aa) the progress towards the targets set out in the Mansion House Agreement (2025) and the state of the supply pipeline of qualifying assets;”.

To clarify the extent of the review to be conducted before the “mandation” power is deployed.

It is an honour to serve under your chairship, Mr Turner. It may be that the subject of my amendment is already covered or that the Minister may wish to take it away for consideration. I commend the tracked changes document that was shared with us and that has enabled us to read clause 38 with all of its new additions in a much easier format. I implore the House to use that tool in other Committees, because it has made it much easier this afternoon.

The all-party parliamentary group for pensions and growth heard from the pensions industry at the roundtables that it held, and this amendment speaks to a point that I made on Second Reading. It is a clarifying point concerning the Mansion House agreement, which sets out targets and a supply and pipeline of investments to be made available by pension funds to invest into. It is a point of clarification because it is arguably good and noble to channel that investment, but the pipeline needs to be managed to ensure good outcomes for members, whose money will be helping to build these projects. It is about future-proofing the Bill, because as the Minister has said in previous sittings, he may not be our Pensions Minister forever.

In short, the purpose of my amendment is to clarify the extent of the review to be conducted before a mandation power is deployed. It is merely a clarification point for the pensions industry.

[Kirsty Blackman (Aberdeen North) (SNP)]

I rise to support amendment 276. It is similar to some of the points that I brought up earlier, which were also brought up in the oral evidence session, about the consistency and existence of that pipeline and the fact that it needs to be there. Reviewing in advance of a decision being made on mandation would be the sensible thing.

I mentioned earlier the issue with chickens and eggs—which comes first?—and I think the amendment brings more of a focus in primary legislation on ensuring that the pipeline exists in order that these companies and organisations can meet their commitments under the Mansion House agreement. It is all well and good for them to have the Mansion House agreement, but if the opportunities are not there and are not investment-ready, it will be difficult for them to meet those targets. This is a sensible amendment, and I am more than happy to support it.

[Torsten Bell]

Before I come to the detail of the amendment, I should re-emphasise the point made by my hon. Friend the Member for Tamworth about the volume of amendments to clause 38 in particular, which is why I asked for the amended clause with track changes to be circulated to the whole Committee. I hope that Members have found that useful.

Turning to the amendment, I have a lot of sympathy for what my hon. Friend is trying to achieve. It is important that we monitor progress on the Mansion House commitments and continue to stay focused on the strength of the pipeline. There are parts of the Bill that would already facilitate that, including data collection that is consistent with monitoring the Mansion House progress, and the strength of the pipeline, which was obviously relevant to consideration of the saver’s interest test, and thus left in the Bill. I suggest that, given our sympathy with the idea of this amendment but its interactions with several other existing parts of the Bill, we commit to reviewing it with a view to deciding whether we should come back with something similar on Report, if the hon. Lady is content with that.

[Sarah Edwards]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: 105, in clause 38, page 43, line 7, at end insert—

“(and for that purpose, a provision of the trust deed or rules of the scheme is ‘in conflict’ with provision under this section so far as the former does not allow for the assets of the scheme to be managed in such a way as to meet the conditions for approval under this section)”.

This amendment clarifies the application of section 28C(14).

Amendment 106, in clause 38, page 43, line 8, leave out subsection (15).—(Torsten Bell.)

This amendment is consequential on Amendment 129.

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[Torsten Bell]

We now come to the contractual override part of the Bill. This group of amendments expands the scope of clause 41 to apply to Northern Ireland pension schemes. Just like in Great Britain, many pension scheme members in Northern Ireland will be in arrangements delivering poor value and outcomes. However, due to a lack of engagement from members, there is often little providers can do to address that. Extending these changes to Northern Ireland will help to solve that. These amendments will create better outcomes for pension scheme members in Northern Ireland, and I therefore ask the Committee to support these amendments.

Amendments 143 and 144 add another layer of consumer protection to the already rigorous consumer protections we have included in the Bill. Currently a provider is required to receive certification from an independent person with sufficient expertise that the best interest test has been met. To clarify, that test requires the provider that wishes to use the contract override to carry out an assessment that it is in the interests of scheme members that the override take place. That test then has to be certified by an independent person. This is about strengthening that independent person test. The amendments require the Treasury to make regulations defining “independence” by specifying requirements which must be met by an independent person before they can be appointed, and ensure that the independent person has no conflict of interest. The FCA is then required to include the provisions made by these regulations in its rules. The amendments make an important change to the Bill by ensuring there will be clear rules on who can undertake this important role, and I therefore commend them to the Committee.

Clause 41 inserts proposed new part 7A, on what we call the contractual override mechanism—referred to as a unilateral change—into the Financial Services and Markets Act 2000. This will enable providers of FCA-regulated, defined-contribution workplace pension schemes —note we are talking about FCA-regulated, defined-contribution workplace schemes only—to override the terms of a pension scheme without the consent of members and either transfer members to a different pension scheme, make a change that would otherwise require consent, or vary the terms of members’ contracts, but only when certain clear conditions, including most importantly the best interest test, are met. This will establish broad equivalence with the trust based market, where these changes are already available, so trustees already have these powers within the trust-based market. It will also create better outcomes for consumers, deliver on a long-awaited industry ask, and help drive scale and consolidation within the sector, achieving the consolidation we talked about in relation to the previous clause. It is an important enabler of those changes.

The clause also amends sections 105, 168 and 429 of FSMA to ensure that the contractual override mechanism can work as intended, and to ensure that the appropriate parliamentary procedures apply to regulations that are made under this part, and that amend or repeal primary legislation. I commend the clause to the Committee.

Amendment 140 agreed to.

Amendments made: 141, in clause 41, page 48, line 24, leave out from “member”” to end of line 25 and insert

“means an active member within the meaning of Part 1 of the Pensions Act 2008 (see section 99 of that Act) or Part 1 of the Pensions (2) Act (Northern Ireland) 2008 (c. 13 (N.I.)) (see section 78 of that Act).”

This amendment is consequential on Amendment 140.

Amendment 142, in clause 41, page 48, line 33, leave out from “arrangements”” to end of line 34 and insert

“means direct payment arrangements within the meaning of section 111A of the Pension Schemes Act 1993 or section 107A of the Pension Schemes (Northern Ireland) Act 1993.”— (Torsten Bell.)

This amendment is consequential on Amendment 140.

[Sarah Edwards]

I beg to move amendment 278, in clause 41, page 49, line 26, at end insert

“and only after VFM assessments are available to the Trustees as part of the decision making process.”

This amendment would restrict external transfers until VFM assessments are available to ensure that Trustees can carry out their fiduciary duty.

The amendment relates to contractual override. It may have been covered in the new drafting of the clauses, as it was tabled on the previous text. The Minister may have seen this potential eventuality, and it may be provided for elsewhere, but we have spoken at length in Committee about the importance of pensions adequacy and about the landscape moving towards a higher membership of defined-contribution schemes.

The amendment is an attempt to bridge the gap presented by the delay between the regulations’ implementation, and to ensure that investments are made not on the basis of low-cost, low-risk funds prior to the regulations being implemented, which potentially would lock down investments. It is another small addition that clarifies the importance of the value for money framework, which the Bill is championing, and it adds to the requirement of consent in the provision by adding focus on ensuring that value for money assessments are available prior to the transfer, as an extra protection for trustees to carry out their fiduciary duty.

[Torsten Bell]

I thank my hon. Friend. She is right that it is important that we think through how to line up the value for money work with the question we are now turning to on contractual overrides. I will come back to distinguish between the data that comes through the value for money process and the actual formal assessments themselves, which is what is referred to in the amendment. We agree that the value for money data is vital for ensuring consumer protections, and it is why the implementation of the contractual override mechanism is already being timed so that it is in conjunction with the value for money framework. The very keen can read that in the road map we set out in June, which gets into exactly those questions.

To go into a bit more detail—and I appreciate that my hon. Friend already knows this—the data for the value for money assessment will be available ahead of the formal assessments, and it is on that basis that people will be able to go ahead with some forms of contract override—for example, when they are moving members within parts of the individual providers, so they would have all the information that they require.

My hon. Friend raised a specific question about when people are being transferred between schemes. Should that always wait for the full value for money assessments? I will give her another commitment that I will take that away and consider it. There may be some circumstances in which that information is available, and we do not wish to unduly constrain providers, but it is a reasonable point for us to be discussing. As I say, she is right to raise the point about the interaction between the value for money data, including its visibility to other people, and the contractual override. If she is happy to withdraw the amendment, I will consider whether we can provide further clarity on the point on Report.

[Sarah Edwards]

On that basis, I am happy to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Mark Garnier]

I beg to move amendment 257, in clause 41, page 53, line 7, at end insert—

“117GA FCA guidance

(1) The FCA must issue guidance on contractual overrides.

(2) Guidance on contractual overrides must include—

(a) when and how overrides can be used;

(b) how to demonstrate transfers are always in members’ best interests; and

(c) how contractual overrides are independently certified.”

Amendments 255, 256 and 257 ensure that contractual override powers are operational in advance of the first value for money assessments.

The amendment is very similar to amendment 278, which was tabled by the hon. Member for Tamworth. The industry has highlighted to us a concern that the Government’s proposed sequencing will not provide enough time between contractual overrides becoming permissible and VFM assessments being conducted, which will totally undermine the effectiveness of consolidation and value improvement. Pensions UK has encouraged the Government to accelerate that and to bring forward the implementation to allow schemes to make progress on consolidation sooner, so that the override is in place well in advance of the VFM framework.

We drafted amendment 257 with the idea that if transfers took place before the VFM framework was implemented, further guidance from the FCA would be required on how and when overrides could be used. However, we welcome the compromise set out in amendment 278, which would ensure that external transfers do not take place until VFM assessments are available. Frankly, that amendment is better-crafted than ours. If we had done them the other way around, I would have deferred to the advice of the hon. Member for Tamworth on whether she wanted to move the amendment. She was right to withdraw her amendment, and we will withdraw ours, but I urge the Minister to write to us both on the outcome of this matter before Report. It would be useful to have his comments beforehand so that we can challenge him on Report, and possibly move the amendment again—who knows?

Pension Schemes Bill (First sitting)

Sarah Edwards Excerpts

Committee stage
Tuesday 2nd September 2025 Public Bill Committees

[Mark Garnier (Wyre Forest) (Con)]

So do I.

[Sarah Edwards (Tamworth) (Lab)]

And I.

[The Chair]

We will now hear oral evidence from Rob Yuille, assistant director and head of long-term savings at the Association of British Insurers, and Zoe Alexander, director of policy and advocacy at Pensions UK. We must stick to the timings in the programme motion that the Committee has agreed. For this panel, we have until 9.55 am. Will the witnesses briefly introduce themselves for the record?

Rob Yuille: Hello. I am Rob Yuille. I am head of long-term savings policy at the ABI. We represent several of the largest defined-contribution workplace providers across group personal pensions and master trusts, insurers in the pension risk transfer market and retail pension providers. Between them, they serve tens of millions of customers and manage hundreds of billions of pounds in assets.

Zoe Alexander: My name is Zoe Alexander. I am director of policy and advocacy at Pensions UK. We are a not-for-profit organisation run for the benefit of our members. Our members serve 30 million savers, who invest more than £2 trillion in the UK and abroad.

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[Mark Garnier]

Q I have one final question. The key point, from the point of view of your members and the local government pension scheme, is that the interest of the members should not be trumped by the interest of the wider economy—their interest comes first. Is that right?

Zoe Alexander: That is right, but often those things are consistent, and our members would agree with that. Those things are not inconsistent.

Rob Yuille: I agree.

[Sarah Edwards]

Q I am interested in hearing a little more about unlocking surplus and some of the challenges, particularly in the way that it is described or calculated, and what the thresholds might be. Obviously, there is an opportunity, but there is also a balance around conflicts arising when an employer might wish to access the surplus. Perhaps you could comment on your understanding and interpretation of how the Bill deals with that issue.

Rob Yuille: The challenge is aligning it with scheme members’ interests so that they are not put at risk. If a surplus turns to a deficit, which it can do because it is by no means guaranteed, and if an employer then fails, there is actual detriment to those scheme members. As we know, economic conditions can change. It is an opportunity for employers, though—that is the purpose of it—and schemes can and do extract surplus now, often when they enter a buy-out with an insurer.

It does need guardrails, and the Bill includes the provision that it has to be signed off by an actuary and it is the trustees’ decision. That is important, but there is a related challenge about the interaction of the surplus and superfunds. Each of those is okay: you can extract a surplus, for the reasons that we have discussed, and you can go into a superfund if you cannot afford a buy-out. The problem is, if a scheme could afford buy-out, extracts a surplus and then no longer can, and then it enters a superfund, the scheme members are in a weaker position than they would otherwise be. There are a couple of things that could be done about that: either leave the threshold for extracting surplus where it is—which is buy-out level, rather than low dependency—or change the Bill so that the combination of surplus and superfund cannot be gamed to get around that. In any case, as you say, it is important to monitor the market, and for the regulators to be alive to potential conflicts of interest.

Zoe Alexander: Pensions UK is content with the idea of using the low dependency threshold for surplus release. We think the protections are sufficient. Providing that the actuarial certification is in place, the sponsoring employer is in a strong financial position and a strong employer covenant is in place, we think there are real benefits to be had from surplus release. We highlight the fact that some employers and trustees will be looking to move benefits from DB to DC using surplus release, or even to a collective defined-contribution scheme. We are interested in the potential of that to bolster the benefits of those types of scheme, and we would like Government to look at the 25% tax penalty that applies when doing that, because if those funds are kept within the pensions system, that is to the benefit of savers, so perhaps that tax charge need not apply.

[John Milne (Horsham) (LD)]

Q Do you think that the proposed value for money framework could have the unintended effect of causing excess caution or short-termism in investment decisions? If so, what mitigations would you suggest?

Zoe Alexander: There will of course be metrics in the value for money framework that look at the longer term, and looking at longer time horizons is really welcome. One concern at Pensions UK is about the intermediate rankings in the value for money framework meaning that schemes cannot accept new business. That may well result in schemes doing everything they can, at any cost, to ensure they do not drop from the top rating to the intermediate rating. That could cause damaging behaviours in terms of herding. We want to ensure that people in the intermediate ranking, whether that is within a couple of intermediate rankings—perhaps you have a top one and then a bottom one, but somewhere within that intermediate scale—you can continue to take on new business, and the regulator will perhaps put you on a time limit to get back into the green, back into the excellent rating. We think that if it is so binary that as soon as you drop into intermediate, you cannot take on new business, that will heighten the potential downside risks of investment behaviours that you are describing.

Rob Yuille: I agree with that. I strongly support the value for money framework—I think both our organisations do—and the intent to shift the culture away from just focusing on cost and to value for money more generally, but yes, there is that risk. There are multiple trade-offs here: it is about transparency and how much you disclose, versus unintended consequences of that. We want high performers but, for high performance, you need to take risks.

As well as what Zoe says, which we might build on, we do not want a one-year metric. One year is too short a period; pensions are a long-term business. There should be a forward-looking metric, so that firms can say how they expect to perform over the longer term and then regulators and the market can scrutinise it.

On the points that were raised about intermediate ratings, this is another area where there is a potential combination of two bits of the Bill. There is provision for multiple intermediate ratings. It was originally conceived as a traffic light system, so there would be three ratings. If there were four, it would be okay to say to schemes, “You are not performing; you need to close to new employers,” but if there are three, firms will do everything they can to play it safe and make sure they get the green. So the interaction of those is really important.

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[The Chair]

A last, short question.

[Sarah Edwards]

Q I just wanted to ask for your reflections on the current levels of funding in the UK compared with other funds. Canada is often touted as having a higher rate of funding. Can you comment on what you think some of the barriers might be? Why is that not happening, and do you think the Bill will address that?

Charlotte Clark: As Rob says, sometimes it is slightly overplayed. There is a lot of investment from UK pension schemes, whether they are DB or DC, within the UK. Why does Canada look like it invests a lot? It is a very mature system. We have two systems—one is in decline and one is in the ascendancy—whereas the Canadian system has been established for 40 years. The auto-enrolment system is essentially 10 years old, so they have a much more mature system. You see within those schemes that they have scale—they are very large and very mature schemes—and, in terms of things such as their investment approach, it is frequently internalised. They have been looking at private assets for longer than we have, particularly in the DC master trusts, auto—

[The Chair]

Order. That brings us to the end of the time allotted for the Committee to ask questions. On behalf of the Committee, I thank our witnesses for their evidence and apologise to hon. Members whom I am afraid time did not allow me to call.

Examination of Witnesses

Christopher Brooks and Jack Jones gave evidence.

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[Rebecca Smith]

The privacy piece came up earlier this morning as well, so that needs looking at.

Dale Critchley: If we deliver something that looks towards targeted support, where instead of just saying, “This is the solution you will go in if you make no choice,” we say, “This is the solution we think is best for you, and you will go in if you make no choice,” that would edge towards marketing, and we could not say that.

[Sarah Edwards]

Q I want to pick up on the changes around DC, and the fact that there are quite a lot of different things—we have talked about value for money, changes in scale and, obviously, default retirement ages. From your perspective, is there a sequencing that needs to happen to make sure that they work, and is that provided for? What would your guidance be around that?

Colin Clarke: I do not think the Bill itself necessarily has the timescales in it, because it will be left to secondary legislation to look at when all these things actually fit together. A very helpful document was published alongside the Bill, with a potential road map. There is a logical order in which certain things have to happen. For example, the value for money test will require movement of members from historical defaults into something that will deliver better value. To achieve that, the contractual override for contract-based schemes would need to be in place in good time before the value for money exercise happens. Otherwise, there will be constraints that might inhibit the ability to do that.

Similarly, with small pots, a lot of the measures will lead to consolidation at scheme level. That will address some, but not all, of the small pots issue. The road map sets out small pots being at the end, and that is a sensible place to put them, because there will be a lot of other activity that happens first that will solve some of the problems. It does not make sense for small pots to be moved before they are moved again—you could see things moving around a couple of times.

On guided retirement, the potential timing of implementation is quite tight if it is going to be 2027 for certain schemes, when we do not have any secondary legislation yet. It is very important that that is consulted on as soon as possible so that we have clarity. Dale mentioned working on various different solutions. We have been doing something similar at L&G, and they may well be the right thing for members, but we know that we will have to fit them around regulations and make some adjustments, so having clarity on those early would be very helpful.

Pension Schemes Bill (Second sitting)

Sarah Edwards Excerpts

Committee stage
Tuesday 2nd September 2025 Public Bill Committees

[Sarah Edwards (Tamworth) (Lab)]

Q I want to go back a little and talk about transfer of funds into pools. During the transitional phase there are funds that might have ordinarily been making investments and would have had a set of investment principles and a strategy, and who for 12 months may potentially not be making those decisions. Are there risks to the members in terms of value, or do you not foresee that being a problem?

Robert McInroy: It is important to point out that the members are not directly impacted by the scheme returns or cost: their benefits are set in statutes and are guaranteed. However, you can see how that might indirectly implicate them; for example, if there was a higher cost to employers because the scheme was not performing the way we would have liked, that could impact on their business.

Councillor Phillips: We know the deadline has been set for the transfer and it is very much business as usual until that happens. Of course, virtually all the funds have been contributing to their pools anyway, so it is just a case of transferring the rest. There are some sensible discussions going on about where it would cost money to pull out of an investment, and common sense must be the first rule, but the direction of travel is what the Government want to see: that the pool is effectively in charge of delivering that investment strategy, which still remains the responsibility of the fund.

Robert McInroy: Within the 21 impacted funds, there are two pools that are being wound up and they are to find a new home, and they do not know for certain where that will be. There is sometimes a degree of inertia in some of the decisions made: why would you make a new investment when you do not know whether that is going to fit into your new pool? I appreciate that is why there are some short timescales on this; we need to get clarity and move through this quickly, or there will be increased risk, but the short timescales create risk in themselves, so there is a balance to be made and a tension there.

[The Chair]

If there are no further questions from Members, I thank the witnesses for their evidence today. We will move on to the next panel.

Examination of Witnesses

Helen Forrest Hall and Sophia Singleton gave evidence.

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[Kirsty Blackman]

Q Thank you very much for all your hard work on this, for your passion and for how articulate you are, particularly for those people that cannot be there and cannot make the case themselves. I really appreciate it. I absolutely agree with what you are saying on indexation; I think it is incredibly important. You were talking about the people that would benefit from these changes. Are they overwhelmingly well-off people, or are they people that are really struggling because of the lack of indexation, and who would therefore be more likely to spend the money and to grow the economy by spending their money, if the Government are worried about balance sheets?

Roger Sainsbury: I have to say that there is a great range.

Terry Monk: I cannot remember what it is, but the average FAS member’s pension is something in the order of £4,000 or £5,000 a year, and if you look at the steelworkers, because they are our example, it is those sorts of guys. I worked in the City. I had a different job, but the majority of the people in the scheme had good benefits and good salaries but their pensions were important and they reflected the role they had in their life. I am not sure off the top of my head, but I think the average of the FAS pension is £4,500—some more, some less, obviously.

I want to make a point that I think Roger mentioned: at one stage, we were not at the table to talk as part of the pensions Bill. We lobbied hard. I know some of you have definitely put forward amendments to the pensions Bill to ensure that pre-1997 becomes part of the pensions Bill, which is why we are here today, but we had to work hard just to get that.

[Sarah Edwards]

Q I am interested in exactly what you were saying around the two-tier element, partly around the challenge of the fact that there are people who have got the full recompense or equivalent, and you have not. Do you feel that this is an opportunity to change that dial and set the record straight? Obviously, an amendment has been tabled. I recognise that; I just wanted to get a bit more from you on the fact that there are people who are in a completely different situation, and I just wanted you to build on that point that there are two sides to this. Some have not lost and some have.

Terry Monk: FAS stopped when PPF opened its doors in 2005, so most of the people in FAS did not have much opportunity to accrue any increasing benefits post 1997. The majority of them are old—the average age of the FAS member is now 73, which is much younger than I am. It is that age group of people who would really benefit, and their widows and their spouses—let us not forget them—and they would therefore spend money that they currently do not have to spend. They can afford their council tax. They can afford their heating. It would change their lives, in terms of feeling that they have achieved this success on their behalf and on behalf of the members.

Roger Sainsbury: I would like to talk a bit about the concept of an amendment. We have observed that one amendment has already been offered: new clause 18 suggested by Ann Davies MP. Our team and I have had a bit of a look at that in the last couple of days. While we very much appreciate her good intention in putting the amendment forward, it actually does not do the job in a number of respects. I do not know how many of you have ever grappled with the obscure and complex language of schedule 7 to the Act, but it is mighty complicated. Some time ago, I and my team spent several days trying to work out what an amendment should be to deliver what we wanted. I have got some first class people on the team, but in the end we decided we actually could not do it, and would have to leave it to the expert drafters in the Department.

That is yet another reason why—I mentioned it in the written evidence—at a meeting I have already asked the Minister if he would himself table the requisite amendment. When you come up against the sheer complexity that Ann Davies has obviously already come up against, this is another reason why we think that would be a very good idea. It is slightly unusual for a Minister to table an amendment to his own Bill, but it is permitted, as the Minister said when I was talking to him about it. In a complex situation like this, it would absolutely be the best way of getting straight to the desired answer, so I plead with all of you to join me in urging the Minister to take this on.

[Sarah Edwards]

I was contacted by my constituents, so thank you for that.

[John Milne]

I think you have answered all my questions already. We have tabled an amendment, and I would really appreciate your input on whether we could improve it or argue around it between now and when it is raised in Committee.

Roger Sainsbury: Thank you.

Pension Schemes Bill

Sarah Edwards Excerpts

2nd reading
Monday 7th July 2025 Commons Chamber

[Sarah Edwards (Tamworth) (Lab)]

I am delighted to speak in this debate. In a former life, I was a trustee of a pension scheme and sat on its investment sub-committee. In my new incarnation, I am the chair of the all-party parliamentary group on pensions and growth.

Pensions sound boring to many, and they sound far away to the young. It might be easier to engage people if we talk about income in retirement. People are not saving enough; it is typically hard to think about, and it is a scenario that could be 30 years away for some. Albert Einstein said:

“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.”

Paying into a pension pot from an early age exponentially increases the pension pot. That is one of the reasons why I am passionate about people understanding pensions—or, rather, their retirement income—and what we can do as a Government to boost them. The sooner we start, the wealthier we can all be in retirement.

The Pension Schemes Bill aims to strengthen pension investment by supporting around 20 million people who could benefit from the reforms through better outcomes and greater value in private sector pension schemes, increasing the amount available to them. I support the aim of the Bill to enable the reforms of investment management in the local government pension scheme in England and Wales. The aim of these reforms is to ensure that the management of LGPS investments delivers the full benefits of scale, including greater expertise, better value for money and improved resilience.

One of the key engines of growth will be unlocking the potential in our local authority pension funds to direct investment towards the UK and, in particular, local regional development. It is vital that investment reaches beyond those areas that fall under mayoral control. I therefore encourage the Minister, in taking the Bill forward, to foster emerging ideas on how local authority pension pools can help to review potential local investment opportunities to achieve the best outcomes.

[Matt Rodda (Reading Central) (Lab)]

My hon. Friend is making an excellent speech. She has convened a very powerful group—indeed, the former City Minister played an active part in its most recent meeting. Does she agree that this Bill is particularly important for our high streets and many other entrepreneurs in our local communities, to try to find new forms of investment to help them boost business?

[Sarah Edwards]

I thank my hon. Friend for that contribution. It is absolutely essential that we ensure that investment is getting to our high streets and towns, not just our cities, and that people see that change when they walk around.

I urge the Minister to take a supportive approach towards pools that are currently in transition, since they cannot necessarily reallocate assets while they are not members of the new pool that they are going to join. Their investment strategies are therefore effectively on hold until they join the new pool. I also ask him to liaise closely with colleagues in the Ministry of Housing, Communities and Local Government during the process of local government reorganisation. Whatever the new framework is for local government in Staffordshire, the pension fund will still be there. Local authority workers in my Tamworth constituency are part of the Staffordshire LGPS. It is one of eight authorities that are jointly own LGPS Central, which last year reported £29.9 billion in assets under management. The sheer scale of such funds is what underlines the link between pensions and growth.

The British growth partnership, announced in October 2024 by the Chancellor of the Exchequer and the Secretary of State for Business and Trade, sits alongside the British Business Bank, and its primary goal is to stimulate investment from UK pension funds into high-growth, innovative companies, thereby supporting the UK economy and creating new jobs. The partnership aims to raise hundreds of millions of pounds from institutional investors, including pension funds, to invest in UK venture capital. That will be supported by a cornerstone investment from the Government. Investments will be made on a long-term, fully commercial basis, independent of Government influence, leveraging the expertise and market access of the British Business Bank to identify potential companies. That will offer pension funds fruitful investment opportunities that deliver for their members as well as for the British economy.

By unlocking domestic investment, the partnership seeks to enhance the UK’s competitiveness in future industries, particularly in the technology and innovation sectors. I am fortunate that in my constituency I have an innovative technology company called PI-KEM, which has grown its business and workforce over the past 34 years. By linking pension funds to growth, it will be possible to have more such companies creating opportunities for skilled employment that sees Britain at the forefront of markets.

However, there is one area of caution: a trend towards Government finances being pooled into funds of which there is limited parliamentary oversight. While I understand and recognise the power of the larger funding pools, I must raise my concerns over how the funds will be reported on and how we will ensure that both taxpayer and pension member money is stewarded appropriately through the British growth partnership.

As the chair of the all-party parliamentary group on pensions and growth, it has been a great pleasure to meet with colleagues and hear from a variety of industry sectors about where they see the strengths and challenges in these proposals. I take this opportunity to thank the Minister for agreeing to attend a meeting of the APPG to assist us in gaining a greater understanding of the approach that he is taking in the next stages of the discussion of the Bill. I also take this opportunity to invite colleagues to come along and join us on Wednesday.

Chapter 2 in part 1 of the Bill reforms the regime governing trustee payments of surplus to employers and enables surplus to be paid out of more defined-benefit schemes. It is stated that trustee oversight and the regulatory framework will ensure the responsible and secure sharing of surplus funds.

The triennial revaluation of a scheme may determine that there is a deficit or a surplus, but despite being calculated by highly skilled actuaries, both are only a snapshot in time. For example, a scheme being evaluated this spring would have reflected the moment at which the US President’s decision to introduce tariffs hit asset prices. An alternative set of circumstances could have created an apparent surplus. I have been through this process as a trustee, and I have put on record—and must put on record again—my scepticism about whether the potential figure is the true one when it comes to the surplus. I ask the Minister to reassure my constituents, and pension scheme members in general, that he recognises that the interests of scheme members must always be the priority. It would also be welcome to understand how “surplus” is to be defined and calculated, as I have received at least four different versions by canvassing the pensions industry.

In chapter 4 of part 2, provision is made for providers of automatic enrolment and pension schemes regulated by the Financial Conduct Authority to change the way in which a pension pot is invested, to transfer a pot to a different pension scheme with the same provider, or to transfer a pot to another provider without individual member consent where it would be in the best interests of members, taken as a whole. I welcome the fact that the Bill states that a range of safeguards and procedures must be followed before an override or transfer can occur, as sadly, it is often difficult to engage members in the details of their pension. That is particularly true where a number of small pots are accrued early in a working life, which has become the norm in many communities with the rise of insecure work.

As such, I also welcome the efforts that this Government are making to create fair and secure work, because when that is coupled with a well-funded pension, working people are protected not just at work but when they sit on their retirement beach, thinking about how their working career contributed to that welcome rest. Will the Minister ensure that the safeguards are clear and given real prominence in discussion? There is a real need for such fallback powers, but there also needs to be a positive narrative about encouraging engagement.

Chapter 1 of part 2 confers powers on the Secretary of State to make regulations to evaluate and promote the provision of value for money by pension schemes. It will enable defined-contribution occupational schemes to be compared based on the value they provide, rather than just their cost. There is an argument that too high a focus on cost—management fees, for example—has had a detrimental effect on investment by pension funds. This stems from an approach that says that if the employer chooses a fund simply based on cost, the fund may look to minimise that cost, and may achieve that through the tracker funds that have come to characterise much of the market. That is potentially why little investment has occurred in the UK so far. Therefore, by pushing forward on the value for money agenda, the Minister can encourage more investment in the UK, strengthen competition in the sector, and ultimately offer better returns to members.

Chapter 3 of part 2 will require multi-employer DC pension schemes to participate in a default fund of at least £25 billion if they are to be used for automatic enrolment purposes. The aim is to encourage smaller funds to merge into larger ones that are more likely to invest in the productive finances of the UK. I suggest to the Minister that there are two issues here, the first of which relates to the market for assets. In any market, the price of a good rises if there is a shortage of that good. In this instance, the Government are being innovative and asking the pensions industry to invest in productive assets, which can include infrastructure and regeneration schemes that are vital to the places where people live. It is therefore vital that we balance the pace and scale of the development of new profitable investment opportunities with the use of any regulations to push investors in a particular direction.

To use an analogy, the Tamworth is a rare breed of pig. Unless an appropriate opportunity were available to expand supply first, any ministerial direction to buy stock of the Tamworth pig would just result in a spike in its price and poor returns for investors.

[Matt Rodda]

My hon. Friend is making a wonderful speech. May I also say that there is a wonderful pig from Berkshire as well, which has distinctive markings? However, moving away from animals, perhaps my hon. Friend wishes to say a little more about the success of the type of legislation she describes in Canada and Australia. It has delivered real value in those countries’ economies and real value for pension savers.

[Sarah Edwards]

Absolutely. There have been some really interesting changes arising from those countries’ reviews of their pensions markets, and I will be very interested to hear what the Minister has to say about what he has learned from those changes. Certainly, in the meetings that we have attended, we have learned a lot about some of the various initiatives that are driving real growth and real change in those countries.

I urge the Minister to focus on the process of expanding the pipeline of suitable projects, while building on the Chancellor’s success—and, I am sure, his own—in creating a voluntary framework for industry and Government through the Mansion House accord.

[Dame Meg Hillier]

My hon. Friend has referred to good opportunities. I think it was Islington council’s pension scheme that invested in social housing in its area. That gives a good return because, by and large, people pay their rent—it is a steady return over a long period of time. Given the desperate need for housing in this country, does my hon. Friend agree that that would be a real opportunity for these funds as they get bigger?

--- Later in debate ---

[Sarah Edwards]

I absolutely agree. It is incredibly important that we make sure those investments are being driven towards the things that are going to change lives, and building houses will change lives. The other thing that my hon. Friend will be very aware of is the fact that the state pension is calculated on the basis that people are going to own a house in retirement. As we know, we are heading to a point at which many people will not own a home and their income in retirement may therefore not be enough, so we need to be alive to that situation.

In conclusion, this Bill offers a great deal to my constituents, with the prospect of better pensions through investing for the future so that living standards are higher. For younger generations, there is a real need for investment now in the long-term future of the British economy, so that they can eventually retire with an appropriate income to sustain them. There is also a need to channel that investment beyond our major cities and mayoral authorities to our shire districts, in order to deliver the change that lies at the heart of this Government’s mandate, and the Bill offers an opportunity to do that. I believe that it offers lots of positive opportunities, but as always there will be challenges. Like a good pension fund trustee, I ask the Minister to take the Bill forward with a listening ear as he seeks to link pensions and growth for the long-term benefit of us all.

Household Support Fund

Sarah Edwards Excerpts

Wednesday 31st January 2024 Westminster Hall

[Sarah Edwards (Tamworth) (Lab)]

It is a pleasure to see you in the Chair, Mr Hosie, and to be making my first Westminster Hall speech in a debate secured by my right hon. Friend the Member for East Ham (Sir Stephen Timms).

I am not alone in this Chamber in expressing deep concerns for my constituents, who face a cost of living crisis that they neither asked for nor deserve. Just this afternoon, I was speaking in Parliament with the Trussell Trust, which warns of an unprecedented level of demand for food banks across the country. In my constituency, the demand for its food banks has risen by 44% since 2022 and by an alarming 101% since 2018.

I have been heartened and genuinely inspired by the community spirit shown in Tamworth during these tough times by the work of the Community Together CIC, led by Lee Bates; the Tamworth Co-operative Society, which donated stock to produce 450 food parcels for children and their families at Christmas; and the Heart of Tamworth community project, which runs weekly lunch clubs for those who are lonely, isolated and vulnerable. The Manor House project has played a crucial role in our community, offering counselling services, a food bank and many other initiatives. My constituent Liz Wadsworth created the community-run Tamworth Pantry, which has repurposed an old bus into a mobile community support station.

Now is not the time to withdraw support from struggling households. We need assurances from the Government that the household support fund will continue past March 2024. Between April 2023 and March 2024, Staffordshire County Council will have received just over £11 million from the household support fund. If the fund is not continued, it is extremely likely that councils will not be able to afford to replace that funding. A Lichfield District Council cabinet member wrote to me on the state of the council’s finances:

“How can councils fill in the gaps when it comes to supporting the most vulnerable, when they are struggling with the pressures of providing statutory services under the extreme cuts of the last 10 years?”

The Government must extend the household support fund.

[Stewart Hosie (in the Chair)]

I call Preet Kaur Gill. Is that Preet? [Interruption.] Apologies! I call Yasmin Qureshi.

Autumn Statement Resolutions

Sarah Edwards Excerpts

Monday 27th November 2023 Commons Chamber

[Sarah Edwards (Tamworth) (Lab)]

I am grateful to be able to make my maiden speech in this debate on the autumn statement.

For many people, the primary concern is how they will get through to the end of the month. Pockets are empty, cupboards are bare and many are filled with despair. I must apologise, for I know a maiden speech should start with a more uplifting tone, but I would be remiss, in my place on these green Benches, if I forgot to be a voice for my constituents and simply glossed over the crisis in which they find themselves.

It is only right that I pay tribute to the many community organisations that have stitched together the supportive fabric that many now rely upon and the threads that hold it together, such as Heart of Tamworth, whose hub provides a solace from that despair, whether it be through the dementia café or the food pantry. Like a quilt, it always has a warm welcome.

The people of Tamworth and the villages voted for a prosperous future and for change, and it is to my constituents that I turn first. I thank them for placing their trust in me to restore their voice in this House. I am immensely proud to represent the great constituency of Tamworth, complete with its spectacular villages, and I will endeavour to champion the issues that matter to my constituents at every opportunity.

I am proud to be Tamworth’s first female MP. Women have been able to stand for Parliament only since 1918. To date, just 563 female MPs—not even amounting to a full House—have been elected. That sets my recent by-election victory, with the second largest swing since 1945, in an even starker light, making me even prouder to have been elected against the odds. I draw a parallel with my predecessor Brian Jenkins who, also as a by-election candidate, was elected against the odds in 1996. I am grateful to him for his support during my campaign.

I was elected with the knowledge that Tamworth boasts a unique history, having been fortified in 913 with the building of Tamworth castle by Æthelflæd, the lady of the Mercians, whose leadership legacy left behind that stunning heritage asset adored by the town and visitors alike. Our sense of identity is rooted in the stories of the past, and the historic market town of Tamworth is proud of its medieval heritage. With my own passion for heritage, the honour of representing a place with so much tangible heritage is hard to articulate, but I intend to find creative ways to support the regeneration of Tamworth through its priceless heritage and, in particular, its high street, which so many people have told me needs regenerating. People like Sam, a female entrepreneur who runs Roasters, which has been a staple part of the high street for more than 30 years, ensuring that people can always get a hot pork sandwich, complete with the crackliest, crackly crackling they will ever crunch. Or women like Sarah, who runs Christopher’s and provides the town with a gorgeous boutique hotel and restaurant. She kept the business going despite the turmoil that faced hospitality during the pandemic.

The Tamworth Co-operative Society is still an integral part of the town and has featured greatly in its development. Founded by philanthropist and social entrepreneur William MacGregor in 1886, it championed, above all else, fair prices and quality products for the poor and working classes, flying in the face of the profiteering shopkeepers of the time.

As a parliamentarian, it is also important to be humble and not to brag about my constituency, so I will refrain from telling the House that we are also home to the Tamworth Tap, which this year was named by the Campaign for Real Ale as the country’s best pub.

But a high street cannot flourish without people visiting and feeling safe. Concern about antisocial behaviour and a desire to have a closer relationship with local police has made my constituents feel that their town centre needs more visible policing. It is for this reason that I would like to pay tribute to my predecessor Sir Robert Peel, the distinguished parliamentarian and first leader of the Conservative party, who was known for his commitment to his country first and his party second. He was a visionary who sought to improve the social system that supported communities, establishing the Metropolitan police on the principles of policing by consent and its place within the community. The well-known principle that the police are the public and the public are the police is still, to this day, what makes policing in this country stand apart from that in many others.

It is therefore all the more troubling that Tamworth no longer has a police station with a front desk or custody cells, and my constituents have raised with me their concerns over antisocial behaviour and safety within their communities. Policing should have a community focus and should be accessible; it should give people the sense that the police reflect them and their needs. That is why I campaign to have a front desk reopened in Tamworth and for the re-establishment of community policing.

The communities I serve include incredible villages such as Elford, Edingale, Whittington, Drayton Bassett and Shenstone, whose community library boasts an incredible programme of activities and a rather fancy coffee machine that is such a repeat draw that it has almost single-handedly stamped out late returns.

Colleagues will know that I am a devoted dog owner and, as a former Crufts competitor, I have set my sights on the much-coveted, highest political accolade: Westminster dog of the year. Tamworth is a proud dog owning constituency, and I met many along the campaign trail, including little Reggie the lost Pomeranian. Estimates by campaign colleagues who were out door knocking put Tamworth dog ownership at approximately 100%, although I am sure the House of Commons Library would rightly disagree with such a loose application of anecdotal evidence.

In conclusion, Tamworth has a rich, strong history, and my constituents are rightly proud of it. However, reflecting on the current cost of living crisis and the desire for the opportunity to live a life less burdened, they rightly want where they live, and the community they are part of, to thrive. The people of Tamworth voted for a fresh start and a positive vision for their town and villages. During the campaign, they were clear in setting out their priorities for change, and having spent over a decade giving working people a voice in the workplace, I intend to be their voice and champion in the constituency and here at Westminster. Thank you, Mr Speaker.