Live Debate: Commons Chamber

Urgent question: To ask the Secretary of State for Foreign, Commonwealth and Development Affairs if she will make a statement on imminent US military strikes on land targets in Venezuela, and the implications for UK foreign policy.

moments for the front benches to swap over. To the next business this afternoon. Urgent Question Calum Miller.

13:48

Calum Miller MP (Bicester and Woodstock, Liberal Democrat)

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Thank you, Madam Deputy Speaker, to ask the Secretary of State for foreign, Commonwealth and Development Affairs to make a statement on imminent US military strikes on land targets in Venezuela and the implications for UK foreign policy.

13:48

Mr Hamish Falconer MP, Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office) (Lincoln, Labour)

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Madam Deputy Speaker is my hon. Friend, the Minister for North America said to the House yesterday. Questions of US military action in the Caribbean and Pacific are questions for the US. The UK has not been involved in US strikes in the Caribbean. The Foreign Office currently advises against all but essential travel to Venezuela due to ongoing crime and instability. As always, our travel advice remains under regular review to ensure it reflects our latest assessments of risks to British nationals.

UK stands with Venezuelan people in their pursuit of a fair, democratic and prosperous future. Nicolas Maduro's claim to power is fraudulent. The UK continues to call on the Venezuelan authorities to publish the results of the 2024 presidential election in full. This government announced sanctions against 15 more members of Maduro's regime in January. The UK will continue to work with our international partners to achieve a peaceful, negotiated transition in

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Venezuela, which ensures that the will of all Venezuelans is respected. Calum Miller.

13:50

Calum Miller MP (Bicester and Woodstock, Liberal Democrat)

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Calum Miller. I'm grateful that this urgent question was granted, Madam Deputy Speaker, and to the Minister for that answer. At oral questions that answer. At oral questions yesterday, the Foreign Secretary and the Minister for the Americas both stated that UK was committed to upholding international law. Last night, Donald Trump announced that US military strikes against Venezuelan land targets would, and, I quote, start very soon. Does the Minister believe that such an action would be legal? Over recent weeks, the US has acted with complete impunity in the Caribbean, conducting unilateral military strikes in international waters with no due process.

Let me be very clear. President Maduro is a threat to democracy and civil liberty. He is an ally only to dictators like Vladimir Putin and President Xi. Yet the UK's response to the culture of impunity in the Oval Office must be robust and consistent. We must always hold those who breach international law accountable. And by failing to, we risk normalising abuses which are eroding the international liberal order, all to the benefit of strong men like Maduro, who reject entirely the rule of law.

So I have several questions for the Minister. Have US strikes in the Caribbean already violated international law? What steps has the government taking, including on halting intelligence sharing to ensure the UK cannot be complicit in other US violations? Has the UK been complicit in illegal actions already taken by the US, including the alleged double tap operations authorised by War Secretary Hg-csf? And does the Minister believe that War Secretary has authorised the commitment of war crimes? Finally, can the Minister confirm what further steps the government is taking to sanction Maduro and his associates, and to work with international allies to strengthen our collective diplomatic and economic pressure on his regime?

13:51

Mr Hamish Falconer MP, Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office) (Lincoln, Labour)

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Madam Deputy Speaker. As this House will understand, we must be very careful on making assessments. We, of course, continue to stand by international law. I am not in a position to provide a detailed assessment of the strikes conducted by the US, which are clearly a matter for them. As the Foreign Secretary and indeed the Minister for North America said during calls yesterday. The Liberal Democrat spokesperson asks whether we were involved in the strikes. I confirm again as we confirmed yesterday, that we were not.

He will understand that I won't comment on intelligence matters from the Dispatch Box and he asks about our policy towards Venezuela. It remains, I set out we do not accept the legitimacy of the current administration put in place by Nicolas Maduro, but we do remain.

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We do maintain limited engagement with Venezuelan officials when necessary. Thank you.

13:52

Richard Burgon MP (Leeds East, Labour)

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Speaker. This is an enormous US military build up under Trump. One of the largest in decades. Retired US generals, along with US politicians, including Republicans, are warning that Trump's strikes off the coast of Venezuela are already violating international law. Yesterday, the government told me that no British troops are aboard the US warships near oil rich Venezuela, despite reports to the contrary. But what is the government doing to try to stop Trump from taking this dangerous escalatory path, which he dangerous escalatory path, which he now says could include land strikes?

13:53

Mr Hamish Falconer MP, Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office) (Lincoln, Labour)

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As the Minister for North America was clear to my hon. Friend yesterday, the US, the UK is not involved in these operations. There have been, as my hon. Friend mentions, has been much reporting and speculation in the US media and indeed in the US Congress. And I think it's appropriate for me to comment on the deliberations of their House on these questions.

13:54

Rt Hon Wendy Morton MP (Aldridge-Brownhills, Conservative)

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Shadow Minister Wendy Morton. Thank you, Madam Deputy Speaker. I'm grateful to the hon. Member for Bicester and Woodstock for securing this urgent question. Venezuela may be a thousand miles away, but instability there has a direct impact on the safety and prosperity of the British people here. The restoration of democratic institutions is essential if Venezuela is to escape the political, economic and humanitarian crises imposed on its people by Nicolas Maduro's authoritarian regime. The Maduro regime is propped up by the same axis of authoritarian states that undermine the rules based international order and foster instability around the world.

We know the shocking level of smuggling that comes out of Venezuela, and at a moment when our allies appear to be taking decisive action, the world is watching how Britain responds. So I'd like to ask the Minister what discussions are taking place with President Trump's administration about the objectives and scope of any imminent US military action, and what would be the implications for the wider UK US defence partnership, particularly our joint counter-narcotics operations? The House will also expect clarity on how the government intends to hold the Maduro regime to account.

What further diplomatic pressure, targeted sanctions and coordinated international action is the UK pursuing to support Venezuelans fighting for a peaceful, democratic transition? Can the Minister also update the House on the government's position regarding Venezuela's provocation and aggression towards Guyana? The risks of escalation and the steps being taken with Caricom partners? And finally, given the scale of organised crime linked to the regime, what additional measures are being deployed to disrupt drug flows, money laundering and criminal networks that threaten communities here in the UK? Are Interpol and our intelligence partnerships being fully leveraged? Britain cannot afford to be a bystander.

The government must demonstrate clarity, conviction and leadership at this crucial moment. Thank you. Mr.

13:55

Mr Hamish Falconer MP, Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office) (Lincoln, Labour)

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I thank the hon. Lady for the important questions. The US is, of course, the UK's principal defence and security partner. We have extensive discussions with them on a wide range of shared security objectives, including, of course, counter-narcotics. We are committed to fighting the scourge of drugs and organised crime, including with our partners in Latin America and the Caribbean, and we are, of course, continuing to work with our international partners to achieve a peaceful, negotiated transition in

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Venezuela, which ensures that the will of all Venezuelans is respected. Doctor Scott Arthur.

13:56

Dr Scott Arthur MP (Edinburgh South West, Labour)

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Doctor Scott Arthur. Thank you, Madam Deputy Speaker. One of my guilty secrets is I like to listen to CNN in the evening. So I do know that people in the States are divided on this issue. Some may call it fake news. Of course, of course. Yeah, the. But I'd be interested to know if when the Minister started by talking about sanctions, have we assessed the impact of these sanctions on Venezuela? And what efforts are we making with civil society there to protect human rights and and really respect the fact that we are not engaging with the way in which the United States is trying to deal with the drug trade there.

But are we able to show leadership in the region by trying to restrict the drug trade in a way that definitely fits with international law? And when did you last speak to his counterpart in the States, in an effort to reach a peaceful solution on this issue?

13:57

Mr Hamish Falconer MP, Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office) (Lincoln, Labour)

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Thank you, Madam Speaker, on my hon. Friend's last question. I understand the Foreign Secretary has been in discussions with her US counterparts in recent days on these questions. He asks an important question about civil society. We strongly condemn the ongoing repression against civil society and members of the opposition in Venezuela, and we continue to call for the unconditional release of those arbitrarily detained, including members of civil society and independent media, such as through

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the UK publish statement to the Human Rights Council in its most recent session. So Julian Lewis.

13:58

Rt Hon Sir Julian Lewis MP (New Forest East, Conservative)

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So Julian Lewis. President Trump would no doubt argue that there's a parallel between this situation and George Bush senior's invasion of Panama in late 1989. But does the Minister agree with me that it will be interesting to see what sort of outcry there is if something like this goes ahead from either Russia or China? And if there isn't, would that not suggest that there's some sort of understanding between these three major powers, that they each leave each other to get on with, shall we say, unilateral actions within what they regard as their own spheres of influence?

13:58

Mr Hamish Falconer MP, Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office) (Lincoln, Labour)

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Mr. and offers the opportunity both to make historical comparisons and comment on the conduct of other powers. I'll avoid the temptation on both. Clearly the British position is international law is vital, counternarcotics action is important and we support both.

13:59

James MacCleary MP (Lewes, Liberal Democrat)

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James MacCleary.

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Presidency clearly has no legitimacy after he was so roundly defeated in last year's elections, defeated in last year's elections, and has continued to refuse to release any evidence to show that he was victorious, as he claims. he was victorious, as he claims. However, does the Minister agree with me that the presidency of Venezuela is a decision for the Venezuelan people to make in a peaceful, democratic way, supported by the international community? Not by the international community? Not a decision for the US president to

13:59

Mr Hamish Falconer MP, Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office) (Lincoln, Labour)

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make under threat of military force. Madam speaker, I'm grateful to the hon. Gentleman for providing an the hon. Gentleman for providing an opportunity to provide a slightly fuller commentary. The UK is clear the outcome of the 2024 presidential elections in Venezuela was neither free nor fair, and therefore Nicolas Maduro's power claim to power is fraudulent. The National Electoral Council of Venezuela has not yet published the results of the elections. However, results published by the opposition appear to show Edmundo Gonzalez securing the most votes in the presidential election by a significant margin, clearly, proper process and a free and fair election is the way to determine the leadership in Venezuela.

14:00

Rt Hon Dr Andrew Murrison MP (South West Wiltshire, Conservative)

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Andrew Murrison. sharing with our allies, does the Minister agree that both Sigint and Humint isn't pick and mix when it comes to the Five Eyes community? And will he assure the House that we will continue to provide the information that the US needs in order to deal with Venezuelan cocaine, most of which lands up in Europe? And I need not remind the Minister that deaths in this country were up by a third in 2022, 2023, and will he ensure that we do not apply an overly loyally approach in our dealings with an ally that is doing its best to tackle the scourge of drugs in the US and in the rest of Europe, in particular on the streets of Britain? Mr.

14:01

Mr Hamish Falconer MP, Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office) (Lincoln, Labour)

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I thank the hon. Gentleman, my predecessor, for the question. We stand by the principles of international law. I won't provide a detailed commentary, obviously, on intelligence matters, but I will say that the Five Eyes remains a vital, vibrant and free flowing intelligence sharing arrangement which allows us to tackle a range of threats, including the illegal drug trade, which is having such a impact, obviously, in America, but to here too in the UK. And I see it in my own constituency, as I know many others will across the House.

Speaker.

14:01

Stephen Gethins MP (Arbroath and Broughty Ferry, Scottish National Party)

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Nicolas Maduro is no respecter of the international rules based system, but we must be. We do not want to see chaos in Latin America, but we are seeing the biggest military build-up in the Caribbean since the Cuban Missile crisis, the biggest US military build-up since the war in Iraq. What lessons would the Minister draw from previous regime change that the UK government had been involved? And what advice would you give to his US counterparts?

14:02

Mr Hamish Falconer MP, Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office) (Lincoln, Labour)

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Again, Madam Speaker, tempting to indulge in some historical analysis, but but mostly the advice that we give to our friends and allies, we would do so privately. Clearly it is. It is important that Venezuela, the rights of Venezuelans to free and fair elections, are respected in the way that I outlined in the previous answer to the Liberal Democrats.

14:02

Rt Hon Mark Pritchard MP (The Wrekin, Conservative)

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Mark Pritchard. continue, if I may. Of course, President Reagan had his famous wobble over the Falkland Islands, and I think eventually came to the right decision supporting the UK at that time. But of course, how we liaise with the United States as their closest ally, certainly in our eyes, we're their closest ally, whether it's the other way around. Let's wait and see. But it could be Venezuela today. It could be Cuba tomorrow, it could be Haiti, and so on and so forth.

So I think we need to be candid with the United States. We need to uphold international law, and we need to encourage our cousins across the water to show restraint, while recognising the need for them to counter the very, very bad drug trade that's going with the United States and affecting crime in the streets in many, many cities there. But of course, the three impacts potentially out of this is one, the growing malign influence already in the region of both China and Russia, and how this might impact the proximity to Commonwealth countries such as Trinidad and Tobago or Guyana.

So there are unintended consequences of something that the United States might feel is completely legitimate. And of course, finally, is the issue of does it legitimise Putin's actions in Ukraine?

14:04

Mr Hamish Falconer MP, Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office) (Lincoln, Labour)

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Yes. experience the hon. Member brings to these questions. I want to be absolutely clear about the pre-eminent role of international law and how important that is to this government, and that the actions that we take and those are, of course, points that we make to our allies as well.

14:04

Edward Morello MP (West Dorset, Liberal Democrat)

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Edward Morello speaker. suspect he grants the President Trump far too much credit in understanding the Monroe Doctrine. But that's an aside to the Minister. What legal advice has the government received or obtained in regard to the legality or possible legal implications of support for the US, albeit through intelligence sharing, for any potential strikes on Venezuela?

14:05

Mr Hamish Falconer MP, Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office) (Lincoln, Labour)

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Amanda Hack speaker of the House. No Ministers receive legal advice on a range of matters relating to

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foreign policy, and that advice is subject to legal professional privilege. Jeremy Corbyn.

14:05

Rt Hon Jeremy Corbyn MP (Islington North, Independent)

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Thank you. Madam Deputy Speaker. I compliment the Member for Bicester and Woodstock on getting this urgent question today. Could this urgent question today. Could the Minister be very clear what the US is doing is illegal in bombing vessels at sea, in international waters and potentially in territorial waters? The harassment of Trinidadian fishing, fishing communities likewise, and the now threat of bombardment on Venezuelan mainland is completely illegal within all sections of international law. Has the British government made any representations to the US on this? And what role did the British government play at the United Nations in the discussions about this? And does he accept this is an incredibly dangerous, massive build-up of military force in the Caribbean that can only be dangerous not just to the people of Venezuela, but the people of every other country and island within the region? Surely there should be some move towards peace rather than allowing this military confrontation, confrontation to develop?

14:06

Mr Hamish Falconer MP, Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office) (Lincoln, Labour)

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Thank you, Madam Speaker, and the right hon. Gentleman brings considerable experience of Latin American issues to this House. On the legal position, I don't think I have very much more to add. Clearly, there has been extensive reporting over the last few days of some specific US strikes. I want to reiterate to the right hon. Gentleman that they were not strikes in which the UK had any role, so we're not in a position to provide the the fuller explanation that we would had we been involved, which we were not.

And on his wider question about his views about

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Build-up in the region, I think the House has heard them. Martin Wrigley. Thank you, Madam. Deputy Speaker.

14:07

Martin Wrigley MP (Newton Abbot, Liberal Democrat)

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Thank you, Madam. Deputy Speaker. I thank the Minister. For his answer. So far. Can I just reiterate on the legality of the US bombing ships that are simply accused of carrying drugs? And is the Minister willing to actually say whether he thinks that is legal or not legal

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in international waters? Yes. I want to be absolutely clear. Madam Deputy Speaker the UK

14:07

Mr Hamish Falconer MP, Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office) (Lincoln, Labour)

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government stands behind international law in relation both to the law of the sea and international humanitarian law in every forum. That is what we will stand for. I am not in a position to make assessments on individual strikes for the reasons that I've set out, but I want to once again underline our position in relation

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both to IHL and the law of the sea. No question. Jim Shannon Madam Deputy Speaker, can I thank the Minister very much

14:07

Jim Shannon MP (Strangford, Democratic Unionist Party)

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can I thank the Minister very much for his careful and thoughtful answers on an issue that concerns us greatly, given the widespread concern about the potential for civilian casualties from these strikes near Venezuela, what assessment has been made to ensure that UK cooperation in the region does not in any way contribute to harm to civilians and remains fully consistent with our human rights obligations? Thank you.

14:08

Mr Hamish Falconer MP, Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office) (Lincoln, Labour)

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As everyone, speaker, the hon. Gentleman asks an important question in a courteous way. The prospects for the people of Venezuela must be at the heart of our deliberations. As I say, we have been engaged with civil society with, where necessary, the Venezuelan government themselves, and we'll continue to keep the human rights of the people of

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Venezuela in our hearts. Can I thank the Minister for his responses this afternoon? I'll just responses this afternoon? I'll just

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allow the front bench to swap over. Thank you.

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Thank you. Ten minute rule motion Yasmin Qureshi. Thank you, Madam Deputy Speaker.

14:09

Ten Minute Rule Motion: Fireworks (Noise Control etc)

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Thank you, Madam Deputy Speaker. I beg to move that leave be given to bring in a bill to make

14:09

Yasmin Qureshi MP (Bolton South and Walkden, Labour)

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14:19

Legislation: Remaining Stages of the Pension Schemes Bill

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Now. We will begin with new clause 30, with which it will be convenient to consider other new clauses and amendments as listed on the selection paper. I call the

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Minister to move new clause 30. Thank you, Madam Deputy Speaker. Can I thank all? Can I start by Can I thank all? Can I start by thanking all hon. Members for their valuable contributions during the passage of the bill to date, in passage of the bill to date, in particular, members of the public Bill Committee who offered line by line scrutiny, they have challenged line scrutiny, they have challenged the government, but always done so constructively, including the shadow Economic Secretary, the Member for Wyre Forest who is not

14:20

Torsten Bell MP, The Parliamentary Under-Secretary of State for Work and Pensions (Swansea West, Labour)

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14:39

James Wild MP (North West Norfolk, Conservative)

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Minister James Wild. Thank you very much, Madam Deputy Speaker. And before speaking to new clauses 24 and 25 and to new clauses 24 and 25 and amendments 14 and 15 and 16, I begin by reiterating the position adopted by my hon. Friend for Wyre Forest, the shadow Economic Secretary to the Minister, acknowledged is not here today, but that we do support many of the planned changes in the bill, because fundamentally, we all want a pension system that is more accessible to the average person and gives all our constituents dignity in retirement.

We want to see a bill that helps make the system work better, and some measures will undoubtedly do that. Equally, the higher tax Budget of which the Minister was a controlling mind is relevant, and we know from media reports that he feels passionately about that Budget using industrial language perhaps more used to industry rather than a think tank, and certainly not for the chamber. And we also know that because of the briefings that appeared in the press, hundreds of thousands of people drew down their pensions, prematurely damaging their savings income as a result.

And of course, the Budget also increases taxes on pension contributions. So taxing people's income, savings and pensions more is the wrong political choice. However, as I say, there is very much we agree with in the bill, but there are some fundamental issues remaining. Arguably the most pressing is the bill does not address pensions adequacy. Research on pensions UK shows that over 50% of savers will fail to meet retirement incomes set by the Pension Commission, and the simple, uncomfortable truth is that this will affect millions of people.

And that's despite the introduction of auto enrolment and of course, the triple lock under the last conservative government. So this bill was an opportunity to do more, but it doesn't currently. So we are giving the government another chance through new clause 25, which would require the Secretary of State to conduct a review within five years and to recommend further measures. Now, we recognise the second phase of the pension review is ongoing, and we have faith in Baroness Drake to lead that review.

But we do have concerns it won't report until 2027, and we maintain that this part of the pensions review should be fast tracked. So perhaps the Minister could at least clarify when in 2027, which quarter we can expect that report to be published. Moving on to amendment 14, this changes the wording on the eligibility conditions for the new entrant pathway relief back to the form that it was in when the bill was first introduced. This means that schemes would qualify for relief if they simply demonstrate strong growth potential and an ability to innovate.

We on these benches, all of us here today, understand the economies of scale and agree about the need for it. However, we do have concerns about the changes to the eligibility requirements. The benefit of the existing market is the diversity that it provides, the choice that creates competition and incentivises innovation. As it stands, though, measures in the bill will disadvantage niche or boutique funds. Specifically, if the amendment is made at committee is enacted, existing companies that previously qualified for the pathway will now be excluded.

And we can take the example of Penfold having launched its workplace pension in 2022. It's grown quickly to over £1 billion of assets under management, tripling the rate since the start of 2024. Even with this trajectory, the timing of the scale test gives insufficient time to reach the £10 billion threshold for the transition pathway. Therefore, we agree with the CEO of Penfold when he said the original draft then created the scale everyone agrees is vital while still leaving room for challenges to innovate without the threat of a hard scale deadline that deters private sector investment.

He is right. These are exactly the type of businesses that the government should be supporting. Coming to the issue of indexation to pre 1997 pensionable service. We all want pensioners to have dignity and retirement. However, when people have done the right thing and put money in their pension, but it is not followed through, that does not give pensioners the dignity they deserve. It's also the case that issues around the pre 1997 indexation is time sensitive, like the infected blood scandal, and the longer the can is kicked down the road, the smaller the problem will sadly become.

Therefore, we broadly welcome the commitment the Minister has given to taking primary powers and government. New clauses 31, 32 and 33. As our new clause 24 was seeking to achieve a similar outcome as the government. However, we do pay tribute to the lobbying from groups like Pension Action Group and the Deprived Pensioners Association, and the shadow Economic Secretary wanted to acknowledge. My hon. Friend for Herne Bay and Sandwich for his continued representations on this issue, and the Minister has already been pressed by a number of members about the concerns from organisations such as the Pensioners Working Group, who want to understand further how the government will ensure that these groups are not forgotten.

The final issue I want to turn to, Madam Deputy Speaker, is the part of the bill we have our most fundamental disagreement with, namely, Mandation. Amendment 15 would prevent the use of the reserve mandation powers until the government produces a report on the reasons why the powers are needed, the effect of the use of such powers, and resolves any issues raised in that report. It simply asks the government to undertake an analysis of the barriers pension funds are facing, rather than rushing to use Mandation as perfectly reasonable, and amendment 16 would remove the power altogether.

So let's be in no doubt this is a bad policy. First, it goes against the fiduciary duty of trustees to act in the best interests of savers. As the Minister has said many times, better returns for members are what is most important, and we agree with that. So how does forcing pension funds to invest into what the government wants them to invest in guarantee the best return for those members? Governments particularly, but not uniquely this one don't always know best, and it certainly doesn't know better than the professionals.

Secondly, currently, trustees and fund managers bear a legal responsibility to protect and grow these savings. If mandated investments fail, who would be accountable for the losses? And thirdly, this measure risks politicising the process. The role of trustees is to secure the best return for members, not follow political whims. This is taxpayers hard earned savings, not the government's. And the government has already secured a commitment from industry to invest more into the UK, which we support through the Mansion House accord.

We only have to look at comments from the Abi, the Pension Management Institute, Aviva, the society for Pensions Professionals and many others to see they oppose this Mandation power industry doesn't agree with the approach the government's taken and neither do we, which is why in committee we voted against these powers and why we intend to move our amendments today. To conclude, Madam Deputy Speaker, there is much agreement on the bill. However, there are important issues still to be addressed, especially around that reserve mandate and power.

It's fundamentally wrong, and I urge the Minister to listen to industry and to back our amendments. Thank you.

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Mr. Dame Nia Griffith. Thank you very much indeed. Madam Deputy Speaker, and I rise to Madam Deputy Speaker, and I rise to speak to my amendment, which is speak to my amendment, which is number 22 on the Order Paper. Now, there's a group of pensioners who've worked hard for very prestigious companies. These

14:47

Dame Nia Griffith MP (Llanelli, Labour)

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14:58

Steve Darling MP (Torbay, Liberal Democrat)

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15:08

Neil Duncan-Jordan MP (Poole, Labour)

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official with responsibility for the Local Government Pension Scheme, and I think it's important that we and I think it's important that we see pensions as a force for social good. My amendments are therefore good. My amendments are therefore aimed at making our occupational pensions more progressive. Now, we pensions more progressive. Now, we should remember that these funds represent the deferred wages of represent the deferred wages of millions of workers and directing pension funds towards socially pension funds towards socially beneficial projects is one way the government can rewire our economic model so it delivers for ordinary working people.

Workers money should be invested, in my view, in areas such as green technology and social housing, stable, reliable sectors that also build a better future for the very people whose contributions fund them. Now, whether this is done through an expanded national wealth fund that could direct investment into socially useful projects or some other mechanism, it would clearly help boost much needed growth and GDP. And what could be more progressive, Madam Deputy Speaker, than using workers pension funds to build the council houses we so desperately need? This would be a tremendous step forward, which would not only ensure a solid investment for the funds, but provide decent homes for people at affordable rents.

New clause five in my name seeks to address this, and I hope the Minister will do more to encourage schemes to redirect their investments in this way. Now. Likewise, amendment three recognises that the voluntary approach to disinvestment in fossil fuels hasn't worked. We know that the LGPS currently invests over £16 billion in fossil fuels, whilst 85% of all pension schemes lack a credible climate action plan. The environmental crisis is the greatest challenge facing us all, so workers wages shouldn't be fuelling the climate catastrophe fundamentally, Madam Deputy Speaker, there is no retirement without our environment and I hope the government can emphasise this position to trustees more fully.

We need a commitment from all LGPS schemes and pools that they have a five year plan to end their relationship with these harmful investments. Now, the overwhelming majority of the public would also be horrified to see their savings invested in illegal wars abroad in relation to the genocide in Gaza. We know that over £12 billion of LGPS funds is invested in companies that support the illegal settlements in some form or another, produce arms or fuel for fighter jets used in the war.

We must ensure pension funds are not complicit in war crimes and human rights violations, whether in Gaza or elsewhere in the world. The Minister will have seen the very strong cross-party support for my amendment number two, and I would urge him to give a commitment in the strongest possible terms that the LGPS should not be involved in funding breaches of international law in any form. I understand that many of them will have money in tracker funds that are connected to arms companies, but this needs to be challenged.

And if that means disinvesting from arms manufacturers that are implicated, then so be it. That brings me to the important area of worker representation. Having a seat at the table is one way in which we can influence how money is invested, and that's why it's so important we ensure there is a voice for trade unions on all future pension boards and committees outlined in amendment one in my name. At the moment, there is currently no requirement for worker representation on the boards of LGPS pools, with the government seeking to reduce the number of these pools down to just six.

It gives us an ideal opportunity in law to guarantee proper worker representation. Fundamentally, it's vital that the workers who pay into these funds have a fair voice in decisions about how their money is invested. And I hope the Minister will begin talks with local government trade unions to see how we can bring this about now, last week's Budget announcement on the pre 97 pension indexation was obviously welcome, and many members have already quoted that in their contributions.

But only those schemes who who were eligible for indexation and are members of the Pension Protection Fund and Financial Assistance Scheme, will see the benefit. Hundreds of thousands of retired workers whose pension funds were taken over by other companies, such as Hewlett Packard, and I've got constituents in my constituency who fall into that category taken over by other companies over the years and are still in operation. They won't be protected in the way that the Budget intended for that other group, and the money they put into their company pensions prior to 1997 will continue to be frozen.

Now, I know the Minister recognises that the value of their pensions over this period has become virtually worthless, and that's why the government must put pressure on trustees and of all schemes to pay some of their surplus funds and ensure their former staff get the pensions they deserve. Madam Deputy Speaker, in concluding the Pension Schemes Bill provides an almost once in a lifetime opportunity to help the environment and society more generally in the way it invests. The £3 trillion in UK pension funds could be used to address this.

The istoric transfer of wealth away from ordinary working people towards the wealthiest individuals and corporations in our society, and given that pensions account for 40% of wealth in the country, change must include considering how this vast pool can be used to improve the lives of those whose payslips created it. The call to use our money and make pensions more progressive is therefore overwhelming, and I look forward to hearing the Minister set out in the strongest possible terms, the commitments the government is

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making to bring that about. Sir Roger Gale.

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Thank you, Madam Deputy Speaker. There is clearly a very great deal of good in Pension Schemes Bill. That's why it went through committee so relatively easily, and committee so relatively easily, and I don't wish to be in any way dog in the manger about that. And I'd like to recognise the fact that like to recognise the fact that there is a great deal of good in it, but I want to focus on the issues but I want to focus on the issues raised in New Clause 22, a new clause 24.

I don't pretend to be

15:16

Rt Hon Sir Roger Gale MP (Herne Bay and Sandwich, Conservative)

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clause 24. I don't pretend to be expert in these matters, but I do know injustice when I see it. I thought, as I think you probably know, Madam Deputy Speaker, for many years for the uprating of frozen overseas pensions for overseas expat citizens. That is a shame from which the reputation of this country will take a long time to recover. And we are, I fear, about to endorse yet another such shame. There's absolutely no doubt, I think, in most people's minds, that the 1995 Pensions Act was flawed.

This is an unintended consequence that was not foreseen, that it's taken this long to get to grips with it is wrong, but we now have the opportunity to try and get

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it right. Yeah, yeah. The right hon. Lady, the Member

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The right hon. Lady, the Member for Llanelli, in an excellent speech, set up store very clearly indeed, and I have huge sympathy for the new clause that she has tabled. Were it to be called, I tabled. Were it to be called, I would vote for it without any question. She's made it very plain, question. She's made it very plain, and it is very plain that there is no suggestion that any redress no suggestion that any redress should be retrospective, no question of any vast back back payments to those whose pensions have been affected.

So while I heard what the Minister said and listened very carefully about retrospection, and I, by the way, agree that retrospective legislation normally ends in tears, this is not retrospective in that sense. So we come to how to get this right. It seems to me that the government's proposals, with respect, are hugely complicated and unnecessarily so, and don't actually do the job. New clause 24, tabled by the opposition front bench. And I know that the my own frontbench has put a lot of effort into trying to get this right, gives a get out in the form of a lack of surplus that I believe would enable those companies who have neglected their duties until now to carry on neglecting those duties, and that for that reason, my personal preference would be for new clause 22.

I represent. The remains of the Pfizer empire in sandwich. Not entirely surprisingly, therefore, I have a significant number. One is a significant number by the way, of constituents who are affected by the pre 1997 clause in the 95 act. I find it quite appalling that companies of the size. And international importance that have been named today, including Pfizer in my own constituency, and it's a good employer, should have put themselves in the position that they now are in, where in some cases for up to 25 years, pensioners have not been rewarded

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in the manner to which I believe them to have been entitled. Yeah.

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Yeah. As I say, for my money, Pfizer is an excellent company, does good is an excellent company, does good work, is a good employer. But somewhere along the line in the back office, probably somewhere in back office, probably somewhere in the United States, a decision has been taken not to uprate pensions. been taken not to uprate pensions. That is quite simply wrong. So I'd say to the Minister, well, I say to the Minister, well, I understand that he comes to this with a reasonably open mind and a with a reasonably open mind and a good heart.

I don't think his proposal does the job. I'm not certain that the opposition frontbench amendment does the job. I do believe that if it were to be carried, the right hon. Lady's amendment new clause 22 would do the job, and I hope that further and very serious consideration will

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be given to adopting that resolution. Thank you. Very much, Debbie Abrahams. Thank you.

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Very much. Madam Deputy Speaker. And I. Rise in support of the government's new clauses. And government's new clauses. And particularly those that relate to the pre 1997 pensionable service indexation scheme rules allow. This will mean that pensioners whose pension schemes became insolvent through no fault of their own, and which have failed to keep pace with inflation, will now have this rectified. And, as I mentioned rectified. And, as I mentioned yesterday in my Budget speech, this will benefit more than 250,000 pension Protection Fund and Financial Assistance Scheme members.

I particularly pay credit to the Pension Action Group and the Pag, which was formed in 2003 following the collapse of the Allied Steel and Wire Pension scheme that thousands of workers without employment or the promised occupational pension, they are not covered by the Pension Protection Fund and introduced by the Pensions Act. In 2004, the members of the defined benefit schemes, whose employer went bust before the 6th

15:22

Debbie Abrahams MP (Oldham East and Saddleworth, Labour)

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of April 2005, the Pensions Action Group campaign first for the Financial Assistance Scheme to be set up for the members of the scheme that went bust, and then for scheme that went bust, and then for the improvements benefit for improvements to benefits to bring improvements to benefits to bring them in line with that of PPF members. In the last Parliament, members of the Pensions Action Group gave evidence to Work and Pensions Select Committee on the hardship experienced due to the hardship experienced due to the policy of not indexing pre 1997 benefits, and as a relatively new chair, I remember hearing personally a separate meeting from them and it was just so moving.

And within weeks different members were unfortunately because of their age, were were not were dying and not going to their families and they were not going to have the benefits that we are now seeing rightly given to this group. Those members have most of their service, have most of their service before 1997, and most were in schemes that provided for indexation on all members pensionable service. Non indexation of compensation meant that the average award award, about £2,700, was progressively lower than the amount expected from the original pension scheme.

Terry Monk told the committee people should get what they paid for. End of story. Richard Nickel said people paid extra effectively for full indexation. It's only fair that it goes to those who have paid for it. I would also pay credit to the Deprived Pensioners Association, who gave evidence to committee about the impact of indexation of pre 1997 benefits on the PPF members. Having heard their evidence, the Committee recommended that the government legislate to allow both compensation schemes and PPF to provide indexation on pre pre 1997 benefits where scheme rules allow.

So I am incredibly grateful to the Pensions Minister for listening, but also to the to the Work and Pensions Secretary who who came to the committee a couple of weeks ago and listened to concerns from from members, including the hon. Member opposite. It is right what has happened. And

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and again, I just reiterate my thanks. Thank you. Manuela Perteghella.

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Manuela Perteghella. Thank you, Madam Deputy Speaker. I will speak to two new clauses

15:24

Manuela Perteghella MP (Stratford-on-Avon, Liberal Democrat)

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standing in my name. First, new clause three concerning the use of the SR one form to ease the burden on people with a terminal illness, seeking support from the Pension Protection Fund or the Financial Assistance Scheme. And secondly, new clause 19 on fossil fuels and climate risks. These issues are very different in nature, but they share a common thread. Both seek to improve the governance, fairness and long term resilience of our pension systems. I would also like to speak in support of new clause 11 as it seeks to remedy HSBC unjust clawback policy that the Midland clawback campaign has been fighting against.

But let me begin with new clause three concerning terminal illness and the use of the special rules. End of life form one. This amendment was born out of the experience of one of my constituents, Nigel. Nigel was diagnosed with incurable stage four pancreatic cancer, and he told me about the issues that he had with providing several forms, several bits of papers, several applications to providers just to demonstrate eligibility and terminal illness. So he came to see me to tell his story and the challenges that he had, the hurdles that he encountered on a very, very what was a very stressful time after diagnosis.

point.

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Yes, please. Thanks. Jim Shannon Madam Deputy Speaker. I've been contacted by some of the Northern Ireland Assembly members Northern Ireland Assembly members about this very issue. It's about those who find themselves were in those who find themselves were in death occurs or suddenly, or the illness comes on very quickly and in relation to the threshold. So whenever the Minister perhaps comes to summing up at the end, can he hope to hopefully address that hope to hopefully address that issue? For those Northern Ireland Assembly members who ask me this very question, they ask today, the hon.

Lady is right. Well done to

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hon. Lady is right. Well done to her for highlighting issue. Thank you. Thank you to the hon. Member. And yes, it's this is Member. And yes, it's this is already when people get a terminal diagnosis. It's a time of full of grief, full of stress. And so this new clause seeks to fix these bureaucratic barriers faced by people with terminal illness trying to access compensation or assistance from the Pension Protection Fund or the financial assistance scheme. And as I said at the moment, when time is precious and stress is already immense, too many people are forced to navigate repeated administrative hurdles simply to demonstrate what another arm of the state has already accepted.

The new clause would require the Secretary of State to set out a clear, fair and straightforward process for demonstrating terminal illness one that places the least possible administrative burden on the individual. Critically, where the Department for Work and Pensions already holds a valid SR one form confirming a terminal diagnosis, that form must be shared with the PPF or FAS. The person should not have to start again, from scratch and again provide several forms, several applications, and once the necessary information has been received, the PPF and thus should be required to make payments within a defined time frame.

These are not abstract procedural improvements. They would materially affect the quality of the precious time a terminally ill person is left. This clause reflects the explanatory statements intent to allow a valid SR one form to serve as sufficient proof of terminal illness for these purposes, reducing duplication and speeding up support, and it is a modest, humane and pragmatic change, and I hope the Minister will consider it. In his concluding remarks. Madam Deputy Speaker, I turn now to new clause 19 fossil fuels and climate risk.

This clause would require the Secretary of State to make regulations to require specific schemes to exit investments in firms significantly exposed to thermal coal, and thereafter to review whether the restriction should extend to oil and gas expansion. This is a financial risk measure as much as it is a climate one. Despite welcome climate reporting requirements in the 2021, Pension Schemes Act schemes remain heavily invested in the most damaging fossil fuels. These investments are doubly harmful.

They risk becoming stranded as technology and policy move on, and they depress returns across the rest of the portfolio by contributing to climate damage that ultimately, as we already heard, drags down the entire global economy. This amendment provides a measure proportionate and financially rational way to divest. It does not force an immediate blanket divestment from all fossil fuels. It allows for stage action following consultation, subject to parliamentary approval, and grounded firmly in the fiduciary duty set out in the 2021 act to secure effective governance of

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climate related risks. Yes. Thank my hon. Friend, for giving

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Thank my hon. Friend, for giving way and for speaking to this important clause, because I think it speaks to something very fundamental, which is that pensions fundamental, which is that pensions are about planning for the future, and climate change is about making sure that we've got a future for sure that we've got a future for all, and having pension funds supporting anything that undermines the outlook for future generations the outlook for future generations is should be prevented in any which way we can.

So I just wanted to amendment.

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amendment. And I think that the my, my. My hon. Friend for his, for his intervention is important intervention is important intervention on on this on this issue and nine new clause 19 does not create a precedent for ministerial direction of investments more broadly. If that's an issue, it is in fact a much narrower than the government's own proposed reserve power. Nor can existing measures substitute for action. Now, large schemes remain invested in the most dangerous fossil fuels, and the government has not yet even consulted on transition plan requirements for pension schemes, meaning enforcement is unlikely before the end of this decade.

So I urge the Minister to acknowledge that transition plans alone are too little, too late, and we must address pension fund climate risks this decade. So new clause 19 provides a route to do so responsibly and effectively. So taken together, these two new clauses one addressing long term systemic financial risk and the other addressing immediate human need, seek to make our pension system more responsible, more resilient and more compassionate. And I hope the Minister will consider both in that spirit. Finally, I will speak in support of new clause 11.

New clause 11 would introduce an independent review into state reduction in defined benefit pension schemes. This is necessary because Midland Bank, now HSBC outdated, outdated and clawback policies, has misled 51,000 former employees and deprived them of the pensions they were promised. This policy abandoned by most organisations in the 1980s, allows HSBC to still deduct the value of an employee state pension using a 77 year old formula, with payslips disguising this as state deductions. This eats the lowest paid staff hardest and disproportionately affects women, and for the same reason of long standing injustices, I also support all those new clauses and amendments in relation to the indexation of pre 1997 benefits.

So this bill, in conclusion, Madam Deputy Speaker, is a chance to make pensions fairer, greener, more ethical and put some of this

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historic injustice right. Thank you. Liam Byrne.

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Thank you very much indeed, Madam Deputy Speaker. And let me begin by congratulating the Minister on bringing the bill Minister on bringing the bill forward to this stage. He has been one of the country's practical idealists since I first began idealists since I first began working with him in 2008, and he is demonstrating those credentials once again in stewarding this bill once again in stewarding this bill with such expertise and intelligence through the House today. He, like me, has long been today.

He, like me, has long been concerned about the endemically low investment rates in this country, now languishing at the lowest in now languishing at the lowest in the G7. But he, like me, has also been concerned for many, many years that we build up in this country a system of universal basic capital, so that the wealth that we create in this country is wealth that is more fairly shared. Now, Madam Deputy Speaker, I rise to speak to you, clause 17, which is in my name, and let me begin by saying enormous thank you to 33 members from all sides of the House who have added their names in support of this amendment, that cross-party support, that depth of support, shows us something important.

It tells us that here in this House there is a broad and deep support for the principles that are enshrined in the clause, because there is a shared belief across this House that working people should be able to use their savings to build a richer and stronger country into which to retire. So my amendment calls for something very simple. It calls for something that has been missing for far too long. As we know, pension funds trustees have fiduciary duties to the people that they represent and the people they serve.

But, Madam Deputy Speaker, the the truth is that that duty needs clarity. And for too long, that clarity has been missing. What we have instead is confusion. And from that confusion comes a caution. And from that caution comes a world in which pension schemes are simply not investing what they could and what they should in the productive assets of our country. Now, the flight of British savings from investing here has long bedevilled this country. It's a sight to behold.

We're not short of savings, but what we are desperately short of is investment. We have somehow magicked a situation where we have £3 trillion worth of long term savings in this country, and yet we have the lowest investment rate in the G7. That is something that I think that this bill will help turn around. I think this bill will help break that curse. There is much in this bill that is welcome. The consolidation of funds, the consolidation of Pots, the simplification of structures, a stronger framework for long term investment.

But for all of the bill's virtues, as it is drafted today, we are still left with this core problem. That and unless we solve this core problem, the bill's noble ambitions will be defeated by its notable omissions. We risk creating bigger and better managed funds that still fail to invest in our country and still fail to invest in our country's future. It will fail to channel the investment

15:36

Rt Hon Liam Byrne MP (Birmingham Hodge Hill and Solihull North, Labour)

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that we need into affordable homes, into net zero investments, into cleaner power systems, into cleaner power systems, into affordable transport systems, into the social care that we all need for the future, into regeneration for the future, into regeneration and into the national infrastructure of growth. It will fail because it fails. Currently fail because it fails. Currently drafted to clarify exactly what it is that pension fund trustees can is that pension fund trustees can consider. Now we want, Madam Deputy Speaker, we want pension fund trustees to have the freedom to trustees to have the freedom to invest in good things here, not out of some patriotic flourish, but of some patriotic flourish, but because it is plainly in members best interests.

When national investment grows and national productivity rises, and when pension pots are get bigger, they will get bigger, faster. If we have a country that is more productive and growing faster than it is today, when a country grows, the returns that shaping retirement grow with it. Many schemes today simply do not feel that they have the permission to make those investments. They are unsure of the law. They fear litigation. They worry that looking at system level risks from low productivity or high housing costs or climate stress might fall out of their legal remit.

And this is where the problem lies. It's a paradox that I don't think we can any longer ignore. We ask trustees to act in members best interests. And yet the law today is so unclear that many trustees feel unable to invest in the very things that could secure the long term interests of their members growth, productivity, and the living standards on which members will one day rely. Today's rules were built to ensure prudence, but what they are doing is creating paralysis.

We have a framework that was meant to safeguard the future, which is in practice, preventing pension savers from shaping that future. And yet schemes want to do more. Members expect them to do more, and our country needs them to do more. But all of this can only happen if Parliament now provides the clarity that the courts have not now. This is not an academic matter. I know at a recent conference, fewer than 1 in 5 practitioners said fiduciary duty was completely clear.

I think 31 industry leaders have now written to the pensions Minister to request this legal clarification, including a dozen chief executives. Publicly. The chief executive of Nest, the UK's largest defined contribution scheme, has said much the same today. Fiduciary duty dates back to case law, which is centuries old, back to a 19th century brick factory in Pontefract and the inheritance of a market lease. At some point in 1726. I'm afraid these cases simply cannot answer the questions that trustees must answer today.

They cannot help with the challenges trustees face today. Have globalised portfolios of system wide risks, intergenerational impacts, real world living standards, and their members. And that's why the spirit of new clause 17 is so important. Modest as it is, it doesn't alter the statutory purpose of pension schemes. It doesn't ask a single saver to accept lower returns. But what it does is cut through the confusion and allow government to bring forward regulations and guidance that spells out clearly and consistently what trustees must consider and what they may consider when making investment decisions.

Now, I very warmly welcome the Minister's commitment today to introduce new legislation. I hope that if he gets his skates on, he can table that as an amendment in the other place, once the bill moves from our precious hands. But I say to the Minister today that mere guidance is not enough, because sometimes guidance can be ignored. Guidance doesn't eliminate liability risk and guidance doesn't give trustees a solid statutory floor. So I urge the Minister to ensure that the legislation that he brings forward does deliver guidance, which is statutory in its bite.

And I would urge him to go big, to go broad and to be specific, to go big by pairing guidance with underpinning regulation that gives trustees legal clarity, to go broad by ensuring that every single kind of scheme falls within the ambit of the legislation, and to be specific, by explaining precisely what those powers can be used for, and the way in which they can be allowed to ensure productive investment. This clarity, if we get it right, could avoid the need to resort to the mandating powers that some in this House have objected to.

It could unlock investment by giving schemes confidence to act rather than fear to hesitate. We have a duty, I think, in this House, a profound duty to ensure that the maximum amount of pension savings in this country not only yields that return to give comfort to savers in their golden years, but does a double duty, helps provide the productive investment which we need to be to build a bigger and richer country. After all, a nation that invests is a nation that builds, and a nation that builds is a nation that will grow its pension pots.

To help ensure that pension savers do enjoy their golden years in comfort. The steps that I think that we have announced today and heard today from the Minister, go some distance to helping us deliver on the spirit of new clause 17. And I'm very grateful to the Minister for his announcement today, which could unlock billions of pounds into affordable homes, into clean energy and comfort in retirement for millions of the people we came to this House to serve.

15:42

Ann Davies MP (Caerfyrddin, Plaid Cymru)

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Ann Davies.

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Madam, can I thank the Minister for his opening remarks this afternoon? The Pension Schemes Bill afternoon? The Pension Schemes Bill has provided an opportunity for the Labour UK government to address long standing pension injustice and long standing pension injustice and such injustice is include the British called a staff sorry British called a staff sorry superannuation schemes scandal. I keep saying the BBC triple S is so keep saying the BBC triple S is so much easier to say, whereby a surplus sharing arrangements are billions heading to the Treasury, billions heading to the Treasury, while former work mine mine workers pensions eroded and the lack of pensions eroded and the lack of indexation for p97 pension accruals under the Financial Assistance Scheme and the Pension Protection Fund causing hardship for pensioners, addressing these scandals is exactly what my two amendments, new clause two and new Clause six, set out to do.

The new clause two required the Secretary of State to set out a timetable for transferring the whole of the BC triple S Investment Reserve to members on commit to a review on how future surplus will be shared, and the coal mining legacy of South Wales extends to my constituency of Caerfyrddin, with the Amman and Gwendraeth Valley is bearing the scars of previous industry, it is then no surprise that my constituents were amongst those whose funds had been withheld, causing immense hardship for those pensioners who had paid into the system for decades.

In fact, it affected over 180 residents within my constituency, 20 of which came to a drop in earlier this year to share their stories of how this long running issue had affected their lives. When the hon. Member for Aberdeen North kindly raised this same amendment on my behalf at Committee stage, the Minister's answer gave some hope for a long awaited action. I therefore welcome the recent confirmation that the UK government has finally listened and has implemented the transfer of the full 2.3 billion reserve to trustees, and I pay tribute to the hard work of my constituents and to former mine workers everywhere for their long fought campaign to make this day a reality.

On behalf of my 180 constituents, I thank the Minister, former allied steel and wire workers have also campaigned tirelessly to receive their rightful dues in retirement. And when the company went bust in 2002, former Allied steel and wire employees lost their livelihoods and their pensions, which they had worked hard for and relied upon for security. Later in life, the Financial Assistance Scheme, the The farce and the Pension Protection Fund PPF were introduced to provide some relief to pensioners in such situations.

But pension contributions made before April 97th were not inflation proofed, leaving pensioners without the secure retirement that they were promised. And that's why I put forward two amendments at Committee stage to extend the indexation of compensation, and the underpass and PPF to cover both pre 97 and post 97 service, and reimbursing members for the annual increases. They should have rightly have received. After the Minister of Pensions responded to the amendments that the amendments could not work, I went back to the drawing board.

You know we never give up in Wales, you see, do we? I sought advice to address his concerns. New clause six is the result of that advice, requiring the Secretary of State to make regulations to provide for that indexation. Now, I welcome the recently announced action by the UK government to finally start addressing this injustice, but limiting pre 97 indexation to a 2.5 cap. For those whose schemes are generally offered, it simply doesn't go far enough. And I would add that as of earlier this afternoon, I have still not received an answer to my written question asking how many FAS and PPF members will not benefit from the government's measure because of this caveat, and I would welcome a response hopefully within the next few days.

The UK government should instead adopt my amendment, which provides no cap on inflation, includes reimbursements to make good losses and specifies application to transfer members ill health payments and to payments to surviving dependents. Affected pensioners must be at the heart of action to address the pension injustices that they have faced for so long, and I urge the UK government to listen to continued concerns and to make the necessary changes to deliver real justice for former workers. That means providing full pre and post 97 indexation and backdated.

Please Rother Valley.

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Gloucester Scott Arthur. Thank you, Madam Deputy Speaker,

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Thank you, Madam Deputy Speaker, and I do thank the Minister for introducing the debate and I do want to speak in support of the want to speak in support of the government's new clauses, 31 to 33, and also speak within the context of new clause 22. But before I do that, I think it's really good that the debate today has brought people together. I think after four days together. I think after four days of debate on the Budget, there seems to be a lot of agreement today, which is a good thing, and today, which is a good thing, and in particular where we are also agreeing on the P97 Budget measures, which were announced last week.

Nobody mentioned them much in their speeches over the last few days, but today we're all talking about it. I think that's a really good thing. So and I warmly welcome the government's confirmation in last week's Budget that we will legislate to allow the Pension Protection Fund and the Financial Assistance Scheme to provide some inflation protection in p97 pensions. This is an issue I have campaigned on alongside colleagues across the House, and I am genuinely pleased to see real, concrete progress included in the new amendments to the pensions Bill before the House.

And I thank the Minister for meeting me in the Treasury in the week running up to the Budget and for drawing the Chancellor into that discussion. We did get our picture taken in the Chancellor's office. One of my constituents spotted there was a mouse trap in the Chancellor's office. So it shows that the Treasury even hangs onto the crumbs as well as the pounds and pennies. For years, more than a quarter of a million PPF and FAS members have seen a significant part of their pension frozen, left to lose value year after year.

In last week's announcement begins to right that wrong, and it matters deeply for people in Scotland. More than 26,000 pensioners will be helped by

15:49

Dr Scott Arthur MP (Edinburgh South West, Labour)

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this change. That is, 26,000 former workers in manufacturing, retail, hospitality and countless other hospitality and countless other industries. And having spoken to many constituents constituents in this position, I know many of them this position, I know many of them have felt forgotten. So this reform sends a message that have not been forgotten, and also that they have forgotten, and also that they have been listened to, which I think is even more important. But this decision is important not only for what it delivers, but for what it signals.

And by acting, the government has effectively acknowledged the lack of p97 indexation was an injustice, and recognising that injustice in the recognising that injustice in the public system, I feel that the government has established an expectation in the private sector that almost must also must look at this. The private sector requires encouragement in this area as a number of companies, primarily under US ownership in my assessment, are not currently providing regular regular discretionary increases on P97 pension payments. Many of my constituents pensioners who used to work for the likes of ExxonMobil, who has been mentioned a few times, and also Johnson and Johnson have told me of sponsoring companies taking a ten year funding holiday from pension payments into the fund while simultaneously blocking indexation of payment of payments.

I take the view that the money in these funds does belong to the pensioners, and the funds themselves are responsibility to move that money from the fund into the pensioners pockets and hopefully into the tills of local businesses in my constituency. The Pensions Regulator itself notes that 17% of P97 pensioners receive no inflation protection, not because of actuarial need but because of the scheme. Rules enable companies to do so, and for a long time this was an academic matter because inflation was so low.

But over the five years it's eaten some pensions alive and pensioners are now really feeling it in Edinburgh South West who are affected by this. And I hope very much that the private pension schemes will that do not already provide significant, significant indexation to p97 pensions but have the financial capacity to do so, and many do will see the signal from the government's changes to the PPF and the FAS scheme and improve their own schemes for the benefit of pensioners.

However, I do have some slight concerns about the bill in that it might not go far enough in terms of actually forcing them to do so. Forcing them to make those improvements. But I do have great faith in the negotiating powers of the Minister. Instead, while it is hoped that the surplus release enabled by this bill will help underpin additional corporate investment in the UK, there is a risk in cases such as Exxon-mobil that it may simply enable these companies to move those money in that funds outside the UK and into the bank balances of shareholders in other countries.

And I think that money, it really does belong in those pensioners bank accounts. But there is a credible argument for also using it to invest in the UK, and it does not seem like a good outcome for that money to be lost to our economy. And this can be avoided by addressing the issues of trustee governance. And while some trustees undoubtedly do act in the interests of scheme beneficiaries, scheme rules do not always allow it, and contrary guidance from the Pensions Regulator may be may be non-binding.

Additionally, trustee boards often lack the independence, particularly when you see a majority or even all the members have been appointed by the employer. Perhaps a conflict of interest. Mindful of this, I commend the Minister for announcing that his department will consult on a trust-based pension scheme on Trust-based pension scheme governance, strengthening the member voice and supporting lay trustees. Working closely with the Pensions Regulator to ensure trustees act in the interests of all beneficiaries and comply with the law and their scheme rules.

And again, this money belongs to those beneficiaries. So I have high hopes for this review as we need significant reform if we are to secure meaningful protection for pensioners. The urgency is clear. Many of these individuals and their spouses are of advanced age. I hope none of them hear me say that. I do not think that is an insult. And and we need to act quickly if we want them to benefit. Addressing this injustice requires not only technical improvements in governance and trusteeship, but the political will to act.

And I am proud that this Labour government is stepping up to act. Looking at this issue in detail, we have seen progress last week in the Budget and there is a commitment to do more. And before then, Madam speaker, I just want to touch on two slightly aligned issues. I think we have spoken a lot here about people who have private pensions p97 across the House, and we worry that these pensions are not enough to support them. Each week in my constituency in Oxgangs will go to community mail, where I meet people who do not have any any private pension.

They survive on the state pension, often quite difficult circumstances. So when we talk about poor pensioners, it is right that we think about P97 and others with private pensions who are struggling. But we should not. We should never forget who is really feeling the cost of living crisis. And secondly, I do have to thank my union and the UQ for the work they have done over many years to protect my pension. I know I am going to benefit from that, and hardly a month goes by without me getting an email from them saying there's some risk to pensions in the university somewhere in the UK.

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So I do commend them on their work. And with that, Madam Speaker, I thank you. Kirsty Blackman.

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Thank you very much. Madam Deputy. Speaker, I appreciate the chance to speak in this debate, especially to speak in this debate, especially without time limits. It's lovely. I absolutely love a very technical debate in the chamber. debate in the chamber. Unfortunately, not quite enough members do to be nice to see huge numbers. Delighted to talk about numbers. Delighted to talk about the technical aspects of of legislation, but having been a veteran of previous finance bills, I'm aware that there is not often a huge turnout for some of these

15:55

Kirsty Blackman MP (Aberdeen North, Scottish National Party)

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huge turnout for some of these things. I'm going to start with, I'm going to be thankful as well, as I have a few criticisms for the government's position throughout the bill. We'll start with a couple of issues around the timing of things. It is appreciated that the changes are being made, and in fact, the member from Edinburgh South West mentioned the Budget speeches. I did mention in my Budget speech how delighted I was that the change had been made and how great it was that the pre 1997 indexation would be taking place.

However, at that stage when I made my speech on Thursday, we had not yet seen the government's amendments. I was aware that there were going to be government amendments, government amendments, because it had been announced. However, we did not have the opportunity to properly scrutinise those amendments or to consider whether the amendment should be amended because of the timeline in which the the details were provided. And I do appreciate that the Minister put in the amendments in advance of the deadline, and that's great.

However, there's there's questions that I potentially would have asked and may have put down some amendments around if I had been able to see those in advance, particularly talking about the 1997 indexation. I apologise if on Thursday, when I was talking about this, I mentioned the FSA instead of the FAS apologise to the Food Standards Agency. I did not mean any anything towards them. If I do that again, I apologise. In terms of the PPF and the FAS.

The PPF got in touch with me last week and I had a good meeting with them about what this indexation will look like and how many members potentially will be impacted. They had suggested that they were getting in touch with 165,000 members, which I thought was a very significant number, with impressively fast turnaround in the time that they were looking to reach out to those members. It is significant numbers, and I do appreciate that. I am, however, concerned that the uplift is does not involve a one off payment in order to bring the pre 1997 contributions up to some sort of level, the the contributions were made pre 1997.

So the compound interest on that would be unbelievable. It would be very very significant if there is no one off payment to be made and no recognition of the fact that the indexation has not taken place, then you are looking at adding 2.5% a year on to on a tenner or whatever, instead of 2.5% every year up until now, which would be significantly different some. I do appreciate that the change has been made. I also appreciate that the PPF levy is still going to be have the potential to reduce to zero, and the PPF plans are still intended to to go ahead.

And it's still it's still able to meet its financial obligations, even with the changes that have been proposed by the government. However, I would appreciate it if the government could consider whether there would be the possibility of a small one off addition to the pre 1997 accrual that that members have, in order that it will bring them closer to what the pension should have been if they had had that indexation previously. Just in terms of the group of people that are affected, it is those older pensioners, some of whom are very unwell, a number of whom is the member, the chair of the select committee mentioned are no longer surviving, no longer with us.

The chair also mentioned Terry Monk, who has been in regular contact with me via email, and I would thank him and all of the members who have fought so hard for this. They have achieved something. I expect they will probably go on fighting for more. I can understand that and I would be happy to back them in search for more justice here. In terms of some of the other issues that have been brought up today around the fiduciary duties, I think the Member for Birmingham Hodge Hill, I think me and him probably have a similar idea of what best interests looks like and what the words best interests mean, or what the interests of of scheme members mean.

Some of the ideas that he was talking about, about investments, are ones that I would fully align with. However, we can all define best interests in different ways. The shadow spokesperson talked about the the fact that fiduciary duties mean that you've got to get he said something like the best returns. It's not actually the best returns, it's the best interests. Some people could define best interests as best returns, but some people may not define best interests as best returns. They might define best interests as better transport systems for the majority of the scheme beneficiaries who live in a certain area.

For example, if there was a more efficient transport system, if there was more housing, if there was better schools and

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hospitals, that would significantly benefit those members in that area. Aberdeen North giving way on

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Aberdeen North giving way on this point, she is absolutely right about this. Many members would, of course, say that a less a more course, say that a less a more equal country, a less unequal country is something they want their investments to help create, their investments to help create, not least because we now know from the work of the OECD and the IMF that more unequal countries are

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countries that grow more slowly. Absolutely. And I do think that there's a real possibility for productivity real possibility for productivity growth if there is better patient capital investment, not just in social housing and renewable energy social housing and renewable energy projects, which I would dearly love to see. And I've spoken a lot about, particularly social housing. But even in even in tech and appliances, for companies to use that capital investment that's invested for the long term will have a significant or could potentially have a significant impact on productivity.

So I think the minister's announcement around fiduciary duties and around that definition, although there will absolutely be political argument about what best interests mean about how we define best interests, at least trustees will have the benefit of the guidance there, and they will not necessarily labour under a misapprehension that they have to get the best possible return in financial terms. And I would just draw the government's attention to the Future Generations Act, which I talk about a lot in Wales, because the Future Generations Act is about making the best decisions for the future.

It's not necessarily about chasing economic growth at any time, at any cost. It's not necessarily about, you know, building certain things. It's about ensuring that future generations are best provided for. And I think some of the lessons that could be learned from that could be put into the fiduciary duties consultation that is coming forward about what best interests actually means and how it could potentially be defined. Talking also about the powers and the direction, I think we've we've largely covered some of that around fiduciary duties.

I'm pretty relaxed about the ability of there being some mandation and some requirement, not least because of the points that the member from Birmingham, Hodge Hill, made about the growth in the economy that is likely to occur. Should should capital be invested more here? Should capital be invested in those things that will reduce, that will increase productivity? I think there probably is a balance to be struck between benefiting pensioners of today. Perhaps if there is a lower return for pensioners 30 years in the future, then we are again causing a level of generational unfairness that we may need to think about.

How does that balance up? Does that new hospital or that new social housing provide enough of a benefit for those younger people who will become pensioners in 30, 40 years? Does does does that stack up? And I think it's not going to be an easy decision to make looking at all of these. But I do generally think that we should we can look at Mandation. I do not have an ideological position against it, like some of the conservative beliefs. However, the the requirement in one of the amendments for report to come back on what those mandatory mandation powers will look like.

I am happy to support the conservative amendment on that, because I think the more transparency from the government, the more transparency from everybody in this place, frankly, the better. And therefore I think a report on it is, is absolutely grand. A couple of other things to mention. The new clause three around terminal illness. I think it's a really neat solution to a problem. Our local authority implemented a tell us once thing where if you had had a bereavement in your family, for example, you only needed to go and tell the local authority once and your council tax bill would be changed, your you would no longer get various charges, your benefits would be changed, everything would be changed.

But only having to tell that distressing story once, I think therefore the the solution proposed a new cluster is a neat one in order. I think the Minister may come up with some issues around data sharing potential of between the PPF and the DWP, but if the Minister could come up with a way in which people do not have to go through, having to tell their distressing story numerous times, having to explain again to somebody else that they are terminally ill, and having to provide a huge amount of paperwork in order to do that, when they've already had to do that to DWP.

I think that would be hugely helpful. And my understanding from my conversation with the PPF on Friday is that they are pretty good at supporting members. They're pretty good. And if they if and I, I felt like they would be willing to be flexible about this should they get direction from the Minister and should the data sharing issues be sorted out? But I'm just guessing there. I'm not putting words in their mouth, I just feel like they are a very member focussed organisation and might be quite keen to support their members in in

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that regard. Last. Yeah. Thank you, Madam Deputy Speaker. This is a very slight aside. Isn't This is a very slight aside. Isn't it interesting that when it comes to claiming benefits from councils or across government agencies, there are so many silos and there there are so many silos and there are so many barriers to organisations talking to each other. But when it comes to stopping the But when it comes to stopping the benefits, when someone passes away, all of a sudden all these departments speak to each other and it happens overnight.

Thank you, Madam Speaker.

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Madam Speaker. I would like to say much more in the way of conversation between between government departments. We've got things like gateway benefits, which allow people to have eligibility for for other things. Sometimes even those don't. Those don't work either. You know, you've got eligibility for Universal Credit, but you don't necessarily get the follow through on free school meals, for example. Any of those things that we can do to make that path smoother for people, either in the cessation of benefits or in the the agreement on eligibility, I think would be would be really helpful.

But yeah, I do agree with him. We have seen some issues around carers, for example, being chased for overpayments which weren't their fault and yet yet they are being chased for those. Just as I said, another couple of things that are within the content of the bill in terms of the consolidation of small pots, again, I support the government's move on this. I think it's incredibly sensible that small pots are consolidated. I think the pensions dashboard, which I'm famously a massive supportive supporter of and have never been critical of the timelines at all that have occurred.

When the pensions dashboard comes online, I think we will see a rush for consolidation anyway. But but I think that consolidation, particularly for those people who have not touched the pot, that's what this is all about. Small pots that haven't been touched, making sure that they get a return from that is totally sensible. Guided retirement and the mid-life MOT that have also been mentioned in the a number of the amendments that have been put forward, and particularly around the ensuring that people are given the correct advice at the correct time, I think is incredibly important.

I think when the government's doing its sufficiency review, when we're looking at the adequacy of pensions and what people will get when they hit retirement, I think potentially a review like that and the consultation that's being undertaken there will conclude, and I would be very surprised if it did not conclude, that more people need more advice earlier, because the more advice that you can have on your pension, the more the more money that you can put in at the earliest possible time on your pension, the bigger your pension will get.

I already mentioned compound interest here. If you put in £100 in your pension, if you put in £100 in your pension fund, you're 21. It will be significantly bigger than if you by by the time you retire than if you put in £100 in your pension when you're 40. It is just the fact that those things, those things happen. So the more advice that we can give people at various important life stages, but particularly significantly before retirement, would be really helpful. So I think that's another thing that will be included.

And then just the last thing I wanted to mention is around the local government pension scheme, the Member for Boston and Skegness made a press conference speech where he talked about the local government pension scheme and how terrible it was about how much money they were spending on fees. That was in September, after the Second Reading of the pensions Bill, at which he didn't speak about this. We've had the Committee stage of the pensions Bill, which he did not put forward any amendments on this specific thing.

We've now got the Report stage, and he hasn't shown up to to raise this. It's almost as if reform MPs are seeing things in press conferences and not doing any actual work. I have told him I was going to mention him in advance of saying this, so it's almost as if they just they just make statements in press conferences and don't do anything like not show up today. So I wanted to highlight the fact that should a member have been particularly keen to make changes to the LGPS to cap, for example, the level of fees that they can pay, which are probably not unreasonable? The LGPS is phenomenally successful in terms of returns for its members.

If people had wanted to amend the bill, they could have amended the bill, but they would have to show up in order to amend the bill. So I would suggest to those media organisations that are very happy to cover press conferences. Could you please ask those members who are giving press conferences what they're actually going to do in order to get their policy to happen? Because if they've got the opportunity, they should use that opportunity rather than just shouting from the from the sidelines.

Madam Deputy Speaker, I'm, as I think I've made clear, largely supportive of this bill. I'm supportive of an awful lot of the things in it. I'm supportive of the direction of travel. I'm supportive of many of the technical measures, which are great fun to have a good look at. I do have probably some concerns around the pre 1997 indexation. I'm delighted that it's happened. However, I think there's more that could have been done. I'm very interested to follow the progress of the fiduciary duties, statutory guidance that is coming through, and I'll also be following the progress of the sufficiency adequacy review that is happening.

And in relation of whether or not Mandation powers take place. And just lastly, on the new clause three that is put forward, please can we make it easier for members who are terminally ill to have that conversation? And if the Minister could commit to taking away that, and considering how the PPF and the FAS can more easily get that information without requiring people to jump through significant

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hoops, then I would very much appreciate it. Thank you Jayne Kirkham. Thank you, Madam Deputy Speaker,

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Thank you, Madam Deputy Speaker, first, I'd like to welcome the real progress on the P97 fund, and I progress on the P97 fund, and I would like to speak. I have not as much specific technical knowledge as most of the people in this as most of the people in this chamber, and I wasn't on the bill committee. But I did look at some of the amendments and I did want of the amendments and I did want come, want to come and make some comments upon them because I was lucky enough to chair a local government pension scheme committee, government pension scheme committee, which I think was very well run and sit on a Poole oversight board.

So I'm going to talk mainly about my I'm going to talk mainly about my experience and use that as an example. I think our LGPS in Cornwall was a very good example of responsible investment and good practice in the sector. So this bill would consolidate LGPS funds into six pools from eight, on the basis that would be effective in achieving scale, diversification of assets and cost savings. Bracknell so the pool that Cornwall was in isn't going forward as as a new pool forming.

Brunel was costly and as I said, a Second Reading, the Cornwall Fund was only due to break even from forming that pool this year. So the costs involved to move in to another fund are expected to be high. And that does concern me as that may impact members, though of course we hope those costs will be recouped by investment growth as a result of that consolidation. Being in a bigger pool did enable funds to invest in local infrastructure like housing, transport and clean energy, and Cornwall was very good at that.

We used our 2.3 billion, which isn't a huge fund. When we think of the size of many of the pools we're talking about now, to do some of that kind of thing, we invested in affordable rental housing near Camborne, where 67 new homes were built on a brownfield site, so I'm looking forward to seeing the infrastructure projects that will be possible with that further consolidation. I did raise concerns at the Second Reading that moving to larger funds may affect the local links.

Brunel is a strong south west Poole, but of course it covers as far as up to Oxford and so we still manage within that pool to be effective on a local level. The Environment Agency was part of our pool, so I noted the amendment on that. And it was tricky because the Environment Agency did have

16:13

Jayne Kirkham MP (Truro and Falmouth, Labour )

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slightly different rules. So that did impact on our pool somewhat. But I am pleased that the scheme But I am pleased that the scheme managers now will have a duty to cooperate with strategic authorities, as the inability to do authorities, as the inability to do that often did lead to maybe unintended consequences. If we were looking at investments that may be looking at investments that may be at some stage, if you're talking about social housing, may even be about social housing, may even be the same as the local authority.

So it would make sense to be able to talk to them about those kinds of talk to them about those kinds of investments. So we don't do silly things like compete against each other about responsible investment other about responsible investment in Cornwall. We had a strong, responsible investment policy, and our carbon neutral date was actually earlier than the rest of the pool. By five years, we were able to maintain those policies and our ESG focus by having a strong presence on that oversight board, which enabled us to influence the pool and be a bit different within the pool.

And I hope that will continue so that pools don't end up kind of being at the at the lowest common denominator level when it comes to things like social impact, investment and ESG matters, but will instead be raised up to the highest. And we did have in our local fund, obviously, employers and employees on our board, and that worked on trust and on our pension committee, and that worked very well. In fact, the union reps and the employers gave some very valuable input.

And I do think that would be valuable on the larger pools as well. Our local Social impact fund was, in the end, 7.5% of our investments. We could channel our investment into that rented housing and local renewables in Cornwall, as well as more widely around the UK. And I'm hoping that local government pension schemes will still be able to set their own local investment targets in this way, even through working with those with those local authorities. I welcome that new guidance on fiduciary duties.

I think the trustees do need that confidence, because it can be uncertain what we can and can't invest in, and they are nervous about that. When I chaired the committee, we wanted to make sure our local impact portfolio enabled us to combine our fiduciary responsibilities to our members with delivering that social and environmental positive change in Cornwall, where we were and where our members lived and worked. But that uncertainty did did produce concern at some, at some times.

So to conclude, I'm really supportive of the bill and the bill's aims. Cornwall Pension Fund did benefit from its initial consolidation into the pool by being able to invest in local infrastructure, and we did make responsible investment one of our top priorities, which I believe has continued since I stepped down as chair. There are issues to do with consolidation and that growth, which I do, would like the Minister to look at, and I look forward to hearing his response. Vikki Slade thank you, Madam Deputy Speaker.

I welcome the overall thrust of this bill and mention measures such as the pension pot consolidations are long overdue and will make a real difference to savers, particularly those small savers. Every new year I try to tidy up the numerous tiny pots from pensions, from jobs I've had in my 20s and 30s pot so small that the cost of a financial planner and exit fees would wipe them out. So this reform is great news for consumers who have been on low incomes and have moved from job to job.

And I would urge the government to go further by lifting the threshold. After all, a pension pot of £10,000 will only generate a payback of around £50 a month, barely enough to cover a basic weekly shop. So the bill goes in the right direction. It doesn't go far enough, it doesn't move fast enough, and I am concerned that it leaves groups of pensioners who did the right thing by saving for the future considerably out of pocket. Like others in the chamber, I welcome the long overdue decision to provide some indexation for pre 1997 pensions in the PPF and FAS.

But let us be clear, this is not full justice. These pensioners have endured decades without inflation protection and a CPI increase capped at 2.5% starting in two and a half years time. Two years time at a time when the cost of living has soared, is going to still leave people struggling. They expected fairness and parity with post 1997 benefits, and what they've received is a compromise that does fall short of restoring their full dignity and security in their retirement. And I call on Ministers to support the calls of many people, including the hon.

Member for Anna Turley, to ensure that pensioners outside the PPF and the FAS are fully supported. The case of pensioners is a long running injustice that I have been dealing with since the first days that I arrived in this place. Employees who were often nuclear scientists and safety engineers were promised pensions no less favourable than their civil service scheme, and many worked at the Winfrith Atomic Energy establishment, just outside my constituency in Dorset. I've met and talked to a number of them, including Peter, Phil, Sally, Michael and also Jonathan, who wrote to me saying nearly 20% of the pensioners have died since the campaign started in 2012, including colleague and campaigner Derek Whitmell.

He said this has echoes of the Post Office and infected blood scandals and delays by the government are simply unacceptable. And that, he went on to say this is in sharp focus for me now with Derek's passing. Madam Deputy Speaker, they trusted the promise that the government gave them at the time. Yet after E8 collapsed, their pensions were cut by almost half, with inflation protection stripped away, and the fund today holds far in excess of what's needed to restore their pensions in full.

But yet thousands of them remain short changed. I do recognise the changes in the pre 1997 pensions announced last week, but it is woefully inadequate. It's not just unfair, it's a breach of trust. And my hon. Friend from Didcot and Wantage, his new clause one calls for an independent review so he can finally deliver justice for those pensioners, just as we have started to do so. And I welcome these changes from the existing government on many of the other historic scandals. This is one of those scandals.

Turning to another, whilst the government's intention to allow surplus sharing of defined benefit schemes is welcome, the bill as drafted leaves pensioners exposed. UK DB schemes hold an estimated £222 billion in surplus, yet 88% of those funds have failed to use those surpluses to restore pensions eroded by inflation. Companies like BP transfer the assets to insurers in bulk annuity deals worth £50 billion annually, whilst pensioners see their living standards. For my amendment 17, 18 and 19 seek to put fairness at the heart of the process.

Amendment 17 ensures surplus sharing principles apply even when schemes are wound up. Amendment 18 requires consultation with members before the surplus is extracted and amendment 19 reinstates trustee consent and obliges trustees to consider

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whether pensions have kept pace with inflation and past requests for discretionary increases. Good morning.

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Good morning. Of course. I'm grateful to Finn for giving way because I have several BP way because I have several BP pensioners. Obviously BP, having operated the terminal in Shetland operated the terminal in Shetland for many years, the injustice they suffered that left them with a pension worth about 11% less than pension worth about 11% less than it should have been because of the decisions of the trustee in 2021 decisions of the trustee in 2021 and 22, showed the inadequacy of the control and the independence of the trustee in relation to the company.

Does she agree with me that that is something that really requires urgent attention here?

16:21

Vikki Slade MP (Mid Dorset and North Poole, Liberal Democrat)

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I thank. next line of mine, John, who works at the BP depot, which farm which is the largest onshore oil site in in England, in Poole Harbour. He told me that his pension had been eroded by 11%. We probably had the same letter and even modest requests for discretionary interests. Increases made by the trustees have been refused by the parent company. Those discretionary increases were affordable. They wouldn't have required any additional funds from the company. And one of another of my constituents, Susie, who sits on their steering group, told me that the issue affects 56,000 pensioners from BP alone.

But the change, a small one, would support pensioners from many other companies. No. Madam Deputy Speaker, I want to end by talking to new clause three, tabled in the name of my hon. Friend from Stratford upon Avon, and I do so in memory of my own mum, Lynne Foster, who died before she could access her pensions, and in support of my constituent Judith, who came to see me about her sister Alison, who died after receiving a terminal brain tumour diagnosis, Alison found that the paperwork required to access her lump sum meant that she would have to articulate and confront death, somet simply couldn't do anything else.

It meant that as a result, she missed out on funds that could have made her last few months more bearable and potentially accessing treatments that might have given her a little bit more time of life with her family. This very simple clause would have allowed her medical team to make that declaration on her behalf, via SR one, and to reduce the administration for all concerned. This bill goes a long way in improving the lives of pensioners, but the pensioners that are missing out and the small changes that could be made can really make a huge difference.

And I really urge the Ministers to think about the impact they can have on lives by little tweaks that won't cost the government anything, or very much

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at all. Thank you Peter Swallow. Thank you, Madam Deputy Speaker.

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Thank you, Madam Deputy Speaker. Can I say at the outset how much I've enjoyed the debate today and I wanted to particularly highlight wanted to particularly highlight the contributions of my hon. Friend the Member for Llanelli who who very powerfully raised some of the very powerfully raised some of the issues that I'm going to go on to address in my speech, and also purely because I enjoyed the fiscal purely because I enjoyed the fiscal geekery, the contribution from the Member for Aberdeen North, who I think rivals the Minister himself

16:24

Peter Swallow MP (Bracknell, Labour)

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think rivals the Minister himself for enthusiasm for financial issues, and I can. What a delight it was to experience that. It is very welcome to have the opportunity to speak on this bill, which touches on several issues close to to constituents of mine in Bracknell Forest. But Madam Deputy Speaker, it's also worth briefly recognising the strong action the Chancellor took in the Budget last week to support all pensioners by raising the state pension by up to £550, only possible because of Labour's steadfast commitment to the triple lock on pensions.

That's real action on pensioner poverty. At a time when both the Conservatives and Reform have flirted with scrapping the triple lock. Similarly, this bill delivers real benefits to private pension savers across the country by simplifying and streamlining the system. The measures in this bill will increase their returns by around 3,300,000 and will increase their returns around 3,300,000 workers on defined contribution schemes in the South East alone stand to benefit by around £29,000 more for their retirement, while simultaneously helping to unlock around £50 billion for investment in the UK economy.

And members only have to follow the Minister on Twitter to see why. It's so important that we increase investment in the UK economy after many years of underinvestment by the previous government. I want to thank the Minister for the work that's been undertaken to get the bill to this stage, and particularly welcome other measures which make provision for further action. On an issue close to many in Bracknell Forest. The slow erosion of pre 1997 defined benefit pensions. It's for this reason I want to focus my remarks today on amendment NC 22, which calls for the indexation of pre 1997 pensions.

I sympathise deeply with the spirit of this amendment. The erosion of pre 1997 pensions is an injustice and one that urgently needs addressing. It's important to say that not all pre 1997 schemes are in surplus, and whilst I agree that it is through no fault of their members, legislating to index would put these entire schemes at risk and it's not a risk. I believe any sensible government would be willing to take, but it is vital that this Bill marks the beginning of further action to bring justice for those with pre 1997 defined benefit pensions, whose schemes are now in generous surplus.

And I was delighted to hear the Chancellor's announcement in the Budget, and carried through with the amendments before us today that members of the Pension Protection Fund will have their accruals protected from inflation, ending years of degradation. In doing so, I welcome the recognition in principle that those with pre 1997 pensions are indeed facing this injustice, and that action must be taken to rectify it. I've met with many constituents who were formerly employed by HP and later HP, which used to be based in Bracknell.

They are now members of the pension scheme and have seen their returns decimated. And I've spoken to other pensioners in other schemes too, many of them mentioned by honourable and right hon. Members across the House already in today's debate. It is not right that people who have worked hard and paid into their pension are now faced with ever diminishing life savings through no fault of their own. Despite many schemes, including HP having significant reserves. Madam Deputy Speaker one of my constituents, Ed, began drawing from his pension nine years ago.

In that time, he has seen his pension increase only three times by three separate percentage increments of 3%, 1% and 1%. Had his pension risen in line with inflation, he says he would have seen his pension increase by around 38% over the years to 2025. And because of this, because of this, the real life impact is a dramatic fall in his living standards. It is not alone. And constituents in Bracknell and across the country should not have to fight anymore to make themselves heard and achieve justice.

We are at an opportune moment to do what we can to help put this right. In this bill, the government is reforming the use of surpluses, rightly strengthening the hands of trustees to act as it has itself done for the PPF scheme, for which, as I said earlier, it effectively acts as a trustee. So it's leading by example here. I'd like to thank both the Chancellor and the pensions Minister for meeting me to discuss all of this before the Budget. I know that the pensions Minister has been clear on his expectations of trustees following this bill, including in his contribution today, and I thank him for his comments and specifically on strengthening guidance for trustees, because today must be the beginning, not the end of the story.

I have already written to the trustees of the HPP scheme, urging them to use the powers contained in this bill to right the wrong. Madam Deputy Speaker, I want to take this opportunity to once more call on the trustees of the HPP scheme and other schemes similarly in surplus, to do everything in their power to ensure pre 1997 pensions are protected from inflation, and I want to do so from the floor of this House, because I think it is really important.

We are as clear as possible that trustees will be given the powers to act and should follow through on that, with concrete action to protect pensioners. It's the right thing to do and with the powers the government is granting in this bill,

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it is now within their hands to do it. Thank you John Milne. Thank you.

16:30

John Milne MP (Horsham, Liberal Democrat)

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Thank you. Madam Deputy Speaker. And I'm speaking to new clauses eight and 13 in my name, among others, with a 13 in my name, among others, with a title like the Pension Schemes Bill, this piece of legislation was probably never destined to grab headlines, but that. I'm sorry, Minister, but it's the case. But that that is a pity, because it does contain some genuinely intelligent measures developed over years with significant cross-party support, and it really could go some way to boosting UK plc.

And that is something we all wish for, directing more of our pension fund savings into UK investments is a long overdue mission. However, it is not just what you do but how you do it. And as I argued in bill committee, I'm not convinced the government has the right balance with its plans to take sweeping powers of mandation. Yes, we should be concerned about the very low level of pension fund investment into the UK. But the reasons behind this are not some kind of trustee treason.

Rather, it's a logical and predictable response to the UK's regulatory framework and a market which has had an overemphasis on costs which discourage any kind of active management strategy. Mandation, however, is the wrong solution. There are other ways we could reach the same outcome, but through partnership, building on the consensus achieved with the Mansion House Accord. So I strongly urge the government to look again at creating more ready made investment vehicles. The biggest risk with Mandation is that it could force pension funds to make suboptimal investments, because they're chasing the same limited supply of UK assets as everybody else.

Besides more support for innovation and start ups, I do see, along with some other members who've spoken today, a fantastic opportunity for large scale investment in social housing, care homes, high streets, environment, environmental schemes and infrastructure that would bring huge social rewards as well as boosting growth, which is of course the the government mission. But that won't happen unless the government helps local and regional authorities to pump prime the system with a stream of investable product. It seems like a small ask to me, and I really do hope that the government will reconsider.

However, I am pleased to see a positive response from Ministers to some of the amendments we fought for in committee, and that doesn't always happen. The scandalous treatment of P197 pension savings by some companies has been left unresolved for decades. So I do welcome that. This government is is the first to act. And the decision to link compensation payments from the PPF and FAS to CPI inflation. Now, of course, this is far from a complete solution and indexation only applies going forward.

But given that up till now there had been no sign of compensation of any kind for any group, I will take this as at least a partial win. So I pay tribute to the persistence of all my Horsham constituents who have raised pre pre 97 indexation with me time and again. Compensation by the PPF is certainly a solution, but we're in danger of missing a once off opportunity to also access pension surpluses. This bill will give trustees increased access to surplus savings, which have built up in many funds over recent years, and that's very good.

But without some kind of extra push from the government, it seems to me likely that none or little of the money will actually go towards p197 pension Injustices. In Work and Pensions Select Committee last week, I asked the Secretary of State whether he really believed that the legislation, as it stands, would indeed help people. And I think I got a kind of yes Minister kind of answer. I quote he said, I'm not going to call stumps on brand new legislation before it has had a chance to have effect.

So let's see what effect it has. I think that is not good enough. The companies who have not so far been shamed into action over a quarter of a century, are not going to miraculously discover altruism today. Some form of compulsion is required. So I hope that the p97 cause will be taken further in the Lords, where the balance of power gives the Liberal Democrats somewhat more leverage than we had in committee. Yes, it's a wonderful institution. So democratic is it? Anyway, moving on.

I also welcome the decision to I also welcome the decision to abolish the Pension Protection Fund levy, which which has been had become effectively redundant. This was the subject of another Lib Dem amendment. It's a move that will reduce hidden fees for pension schemes and pass those savings directly to savers. Other things, however, are still missing. As someone with a professional background in pensions communications, I have argued during committee bill committee for the government to enable free universal pension guidance at the age of 40, amongst other stages, when there is still time to change outcomes rather than waiting all the way to the moment of retirement itself, there is a ticking time bomb of pension inadequacy that must be addressed today.

Pensions guidance is an incredibly low cost way to improve outcomes. The Pension Wise service would be an excellent vehicle for this, and it's ready and made waiting for us to use it. So I say to the Minister, if his government won't back NCAA, will he meet with me and with members of industry to look at how an auto enrolment trial could finally move this proposal forward? And that brings me to NC 13, tabled by myself and the hon. Member for Torbay.

This amendment seeks to strengthen the people focussed elements of this bill by using pension services to offer free, accessible guidance to the groups we know are under saving. So if we look at minority ethnic savers, their pension pots average £52,000. Now that is less than half of the £115,000 that applies to white British savers. Consider also that women are, on average, set to retire on just 13,000 a year, compared with 19,000 for men. And that's a third less. And disabled workers are approaching retirement, with average pension savings of £47,980.

And that is just one third of the UK average. The government rightly says it wants people to be independent, financially resilient and able to pay their own way. But that can't happen if entire groups, women, ethnic minorities, disabled people are destined to retire, to retire on a fraction of what others are provided with. So to conclude, there's a lot to like in this bill, but legislation opportunities only come up once in a blue moon, and there's a lot more that could be done here.

So I ask the government

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to support NC eight and 13. Thank you. Elaine Stewart.

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Elaine Stewart. Thank you, Madam Deputy Speaker. I also rise to speak to the new I also rise to speak to the new clause 22. And and I want to begin by recognising the work of Hewlett-Packard Pensioners Association and in particular Association and in particular Patricia Kennedy from Ayrshire, who had hoped to be in the gallery today, however, was too ill to today, however, was too ill to travel. Patricia has been a driving force to keep this issue alive. But of course this is not only about

16:37

Elaine Stewart MP (Ayr, Carrick and Cumnock, Labour)

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of course this is not only about one individual, it's about all p197 pensioners. Earlier this year, I was proud to host Patricia and many of her fellow campaigners in Parliament. That meeting made it clear that human cost of inaction, pensioners who have seen their incomes erode for decades, families struggling because the system has failed them. That is why amendment 22 matters. At its heart, 22 sets a simple principle pensions earned before 1997 should not be left to wither away.

And it also follows a principle that the government has already adopted. I welcome the Minister's comments and his opening remarks to work with trustees to ensure that the scheme and schemes import surplus, like Hewlett Packard Enterprise, would work to benefit those pensioners. And I would also ask if good cooperation was not forthcoming, would the government be looking to other legislations and a means to correct that course? Because of many of these schemes are backed by profitable multinationals, yet discretion has failed.

It has failed. The wood group has failed Hewlett Packard Enterprise, it has failed STMicroelectronics with also Atos, Sema and American Express, with AIG, with Pfizer, with IBM, with Chevron, NC Scotland, NCR Scotland, Lloyd's Register and with Johnson and Johnson. Some pensioners have gone ten, 15 and 23 years without a single increase. This is not fairness. NC 22 would correct this. I am sure that we all agree on this side of the House that pensioners should not depend on the whims of employers, and we should be wary of accidentally creating an entrenched situation where pensioners and failed schemes receive protection, while pensioners insolvent schemes remain unprotected.

This to me seems inconsistent. New clause 22 would address this inconsistency to ensure that every pensioner, regardless of when their service was accrued, has security and dignity and the dignity they deserve. And I thank the Minister for meeting me to talk over my

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worries on this bill. Thank you Susan Murray. Thank you very much, Madam

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Thank you very much, Madam Deputy Speaker, I'd like to start by thanking my hon. Friend the

16:40

Susan Murray MP (Mid Dunbartonshire, Liberal Democrat)

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by thanking my hon. Friend the Member for Torbay and the Member for Mid Dorset and North Poole, who have clearly devoted a lot of time and care to scrutinising this bill, along with others, of course, and bringing forward constructive amendments. The UK pensions market is currently worth around around £3 trillion. As we've heard a staggering sum. The hon. Member for Birmingham Hodge Hill and Solihull North have already has already highlighted the opportunity for national investing, as well as the opportunity to improve the quality of life for pension holders.

Yet for too many people, the rules and regulations that determine what they will receive in retirement are opaque, as anyone who has worked through the bill will know and often deeply confusing. And that is why I welcome the Liberal Democrat proposals to introduce a simple traffic light system, helping people to understand the scheme and how well their pension is performing. However, understanding is only one part of the picture. People must also be confident that their pension is being managed legally and ethically.

I therefore welcome the amendment from the honourable from the hon. Member for Poole, which would ensure that British pension funds are compliant with UK's duty, not to aid or assist serious breaches of international law. After the horror we've witnessed in Gaza over the past two years, and judging by the strength of feeling from my both my constituents and from members across this House, I believe this safeguard would be warmly welcomed. I cannot speak in this debate without raising the pre 1997

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pensions. Like others, I would. Stress for interrupting her, just as she's getting on to a point just as she's getting on to a point that that she knows I care deeply about. But I just wanted to tease out what she was talking about, about ethical investment. And I think what I'm struggling with here is that her front bench has spoken against Mandation, and then she very passionately talks about ethical investment and the need to ethical investment and the need to ensure that I just wanted her to address the fact that there is a conflict here.

I am deeply conflict here. I am deeply sympathetic to both viewpoints. I understand both viewpoints, but I also accept and recognise that also accept and recognise that there is a conflict. You either have a system where pension schemes are given clear guidance on what they should invest in, or you don't, and you can't have both. So I just wanted her to really address that conflict and really come down on one side of the fence or the other and not, if I may very gently say, do the Lib Dem thing of sitting on that fence too much.

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Susan Murray, thank you very much for your intervention. And and I appreciate the point that you make, but I think the important make, but I think the important thing is that there is clear guidance for pension funds in terms guidance for pension funds in terms of making sure that we do not assist breaches of international law. And I think that that makes things very clear and quite, quite easy to understand for them to, to carry on with. So I, I've mentioned carry on with.

So I, I've mentioned my constituency of Mid Dunbartonshire has many pensioners who are reliant on schemes that don't provide annual indexation. And that's why I was pleased to add my name to the Liberal Democrat. New clause seven. It takes a nuanced and responsible approach, calling for an assessment of the position faced by pre 1997 pensioners and for options to address the reality of their effectively frozen over many years pension. And as for many of the pension holders as possible to be fully supported when schemes that are in surplus, as the hon.

Member opposite mentioned, when these schemes that are in surplus are able to make sure those pensioners have a better quality of life. Ultimately this is about fairness and openness in our system. Pension schemes hold an almost unimaginable amount of money and are among the most powerful, powerful financial actors in in our economy, which could help to reduce the inequity in our communities. They are too large and too complex for any individual saver or campaign group to challenge alone, and it therefore falls to us in this House to ensure that the operating fairly, ethically and transparently, and that people who contribute to them and who rely on them can retire with dignity and confidence.

Thank

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you. Clive Jones. Thank you very much, Madam Deputy Speaker. My constituent Deputy Speaker. My constituent David worked for three M for 31

16:45

Clive Jones MP (Wokingham, Liberal Democrat)

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David worked for three M for 31 years, 23 of them pre 1997. His pension payment for service prior to 1997 has not increased since 2008, since when it has lost 40% of its purchasing power. Other constituents have lost more. Another constituent of mine worked for ExxonMobil, who he says gave him written documentation that he would receive annual increases at 80% of RPI. But since legislation changed in 1995, this has not happened. They are just two of the 40 plus constituents of mine who have contacted me about the injustice experienced by pensioners, whose pension schemes are failing to provide an inflation increase on their service prior to 1997, and I know many more across the country face the same injustice.

Their stories are deeply troubling, troubling rather than enjoying a well-earned retirement, pensioners are left struggling to keep pace with the cost of living, often

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surplus. Member. Give way? Yes, I.

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Give way? Yes, I. Thank the hon. Member for giving way because I have a very similar constituent who has a similar constituent who has a similar example of the discretionary increases. They had 80% of RPI and in 2023 they were reduced to half. in 2023 they were reduced to half. And this has left them, amongst others, unable to afford the bills for their homes and bills, etc. And for their homes and bills, etc. And whilst I'm pleased to see the issue of the pre 1997 pension indexation in the Budget for PPF and FAS in the Budget for PPF and FAS members, I remain concerned for constituents like this.

So does the hon. Member agree with me that hon. Member agree with me that there does need to be a plan for these people impacted by the sudden decrease in the inflation payments.

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I think the hon. Member for her intervention and I absolutely agree with you. There does need to be with you. There does need to be some sort of plan sooner rather than later. Rather than enjoying a well-earned retirement, pensioners are left struggling to keep pace with the cost of living, often whilst their pension schemes are in surplus. The government appears to recognise this injustice and is recognise this injustice and is proposing to use surplus funds in the PPF to provide inflation the PPF to provide inflation increases.

On some pre 1997 pensions. I ask, therefore, why are pensions. I ask, therefore, why are we not seeking to resolve the same issue for company defined benefit pension schemes? Many of these pension schemes have a funding surplus, but choose not to use this to support their former employees, despite often being asked to do so by trustees who are ignored by foreign based employees. But employers? Surely that cannot be right. Research by the Pensions Regulator revealed that even among schemes whose rules allow for discretionary benefits, less than one third had provided these benefits in the previous three years, employer discretion has failed in practice and will continue to fail unless Parliament acts.

The Pension Scheme Bill fails to address this issue, only amending the original legislation can ensure fairness for those with pre 1997 service. The Society of Pension Professionals argues that legislation on the issue of pre 1977 1997 benefits is unnecessary, but the evidence is clear. Discretion more often than not is exercised to the detriment of pensioners. As I've said, trustees lack the authority to act and pensioners are left behind. Madam Deputy Speaker, the problem appears to be concentrated in a small number of large companies.

They were meant to provide long term financial security for their employees. We must remember that all defined benefit schemes paid levies into the PPF, creating a surplus that now funds indexation. If pensioners in the PPF deserve protection, then so do those in live schemes who helped build the surplus of those schemes. The government has taken a first steps by restoring indexation. For some, it must now take the logical step extend inflation protection to all pre 1997 pensioners in live schemes.

And I'm Deputy Speaker I believe pre 1997 pension Service should receive inflation protection on the same statutory basis as post 1997. This is about fairness, dignity and justice for those who worked hard, paid into schemes, were made promises and now deserve security in retirement. Pensioners affected by this injustice live in every constituency and they deserve the support of this House of Commons and the government. Our constituents affected by these injustices simply ask for fairness and hopefully the Minister will make sure it happens soon.

Thank you Ayoub Khan.

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Thank you, Madam Deputy Speaker. I'm hoping to dedicate a large portion of my speech in relation to portion of my speech in relation to the amendment that I'd put forward towards this bill. But before I do, can I swiftly acknowledge the can I swiftly acknowledge the amendment from the members, hon. Members of Poole, Birmingham Hodge Hill and Solihull North, Stratford Hill and Solihull North, Stratford upon Avon and Llanelli? Whilst a pension fund should no doubt ensure that they deliver sufficient returns to their clients, they must also reflect on the duties they have, not only towards those that have, not only towards those that make contributions, but also towards society at large.

That means not using public money to prop up industries that rail prop up industries that rail against our primary objectives, whether that be preventing violations of human rights, upholding our commitment to net zero, delivering unfettered justice for those who have been wronged, as in the case with those whose pension contributions prior to 1977

16:51

Ayoub Khan MP (Birmingham Perry Barr, Independent)

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1997 had not risen with inflation. So I wholeheartedly align with the hon. Member for Mid Dunbartonshire hon. Member for Mid Dunbartonshire in terms of having ethical parameters. But but to move on to my own amendment, which was my own amendment, which was submitted, I was hoping to bring focus to the practices of pension funds that fall under Local funds that fall under Local government pension scheme, the pension funds that makes provision for the employees of schools, universities, local authorities, police forces, just to name a few.

These pension funds preside over £390 billion in assets under the management of members of the management of members of the investment banking sector. Given that much, if not all, of the funding that flows from our schools, councils and the like come from taxpayers money, we have a right to make sure that none of it is being put to waste. But, Madam Deputy Speaker, I regret to report that these local government pension funds are heading for an absolute embarrassment of riches. While public money sits idle in a vault lining the pockets of the investment bankers that manage them.

We are experiencing deep funding crises across our schools, our universities and our local councils. From the moment these pension funds were established year after year, we have seen the same tactics deployed by those that preside over them. Council, schools and others end up putting too much of their budgets towards employer contributions, leaving them with less money to spend on things that matter. Whilst obscene amounts of money are left to be used as a lucrative plaything for the investment banking sector. When calculating the money that councils, schools and like must pay into their employees pension, the pensions funds first estimate that annual rate of return that they expect to get from the assets.

To do this, they enlist the work of an actuary firm using one of the Big Four, which takes into account market conditions and various risk factors, to come up with a figure. The work of these actuaries is incredibly precise, and yet every year they end up drastically underestimating how much these local government pension funds will grow over the next year. Why? Because the Local Pensions Board sets the assumptions and parameters on which they make such calculations, often with the intention of overstating things that might that may hit the fund's assets, like market volatility and uncertainty.

From there, they then, by default, skim a substantial percentage of the fund's assets, usually around 0.5%. And while that may not seem a lot when you realise that, for example, West Midlands Pension Fund holds £21.2 billion worth of assets, that means at least £1 billion is being scraped off the top every year. Madam Deputy Speaker when you combine a highly conservative estimate for the growth with lofty management expenses, you get one thing and one thing only. Our councils, schools and key institutions end up putting more than they need into the banking sector under the guise of securing their employees a comfortable retirement.

And then once they get to the end of the year and have a mysteriously exceeded their artificially conservative projections for growth, the pension fund managers are left with even a bigger pot of money from which they take the mandatory percentage fee. It is this repeated cycle of grossly inflating the contributions of our state institutions that is resulting in more and more taxpayer money being used not to fix our crumbling public services that benefit society at large, but for city bankers to make big bets on the market and make profit.

It is the equivalent of the pension fund setting the rules of the game, marking their own homework and keeping the proceeds for themselves rather than refunding them to those who put it put into the system. It has gone to the point where even the scheme advisory board, which advises local pension boards, has said that they need to stop overcharging their clients and underestimating their growth. And yet, unfortunately, all the power lies in the hands of the Secretary of State to make the changes that would put much needed investment back into our schools, councils and the like.

If I may just give an example, Madam Deputy Speaker, research by David Bailey and John Clancy of the University of Birmingham and Birmingham City University has shown that Birmingham City Council has handed over £1.2 billion in employer contributions to the West Midlands Pension Fund in the last ten years, and by 2022, the council was being asked to pay an extra 37% on top of its standard bill. When the nine other core city councils in the UK were on average asked to pay around 17%.

And so Birmingham City Council are calculated to have overpaid the West Midlands Pension fund, roughly £547 million in 2023. The Birmingham City Council declared section 114 bankruptcy just this year, proving council tax rises of 21% and £300 million in cuts to vital services. Madam Deputy Speaker, if we are being hypothetical, had that payment never been made, Birmingham City Council wouldn't have needed to declare bankruptcy nor approve Budget cuts that reduced its offer to a bare bones skeleton services.

The implications that clamping down on the excesses of local pension boards would have on local councils, schools, universities and the British taxpayer is truly incomprehensible. And yet, as things stand, we are shying away from rebalancing the books, from deploying all our government's investment into public services that we can. And that leads to my own amendment, which relates to putting a cap on the investment expense that can be claimed on LGPS pension funds. In the case of West Midlands Pension Fund, the management expenses charged amounted to a 4% increase in employer contributions.

That means by charging 60 basis points in management fees, Birmingham Council taxpayers are paying £13.4 million to the investment management managers. That works out at £50 and every band d council taxpayers bill. If my amendment was selected and put in place, it would be only £3.30 on every taxpayer's bill in the same period. The pension fund has consistently failed to report whether the investment management expenses it charges go and who it benefits. Madam Deputy Speaker, as I say, my amendment, had it been called for a cap to be implemented on the fees which investment bankers can take from these pension funds, and while this would certainly mark a great step in ensuring that excessive wealth gets put into the hands of the private sector, we must also ensure that more is done to ensure that our schools, our councils, pay no more in employer contributions than they must so they can put more investment into things that really matter, whether that be local government funding for adult social care or school children with special education needs, or being able to put more teaching staff in our classrooms.

Thank you, Madam.

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Witney Minister to wind up. Yeah, yeah, yeah. Thank you, Madam Deputy Speaker,

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Thank you, Madam Deputy Speaker, with leave of the House, I will respond to as many of the points raised as I can manage, and I want raised as I can manage, and I want to thank hon. Members for their speeches today. They've shown not only the depth of knowledge in this House, but also the breadth of House, but also the breadth of pensions issues that matter to all of us and to our constituents. I will start by thanking those who will start by thanking those who have welcomed some of the changes we've introduced and set out today on the PPF.

The hon. Friend from Oldham East and Saddleworth and from Edinburgh South West. I appreciate their remarks, and when

16:58

Torsten Bell MP, The Parliamentary Under-Secretary of State for Work and Pensions (Swansea West, Labour)

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17:24

Division

17:59

Legislation: Remaining Stages of the Pension Schemes Bill

some of the biggest promises we have made to the public that the prospect of a comfortable retirement, with the option of leisure, which hon. Members may leisure, which hon. Members may choose not to take in later life, is there for the many, not just the few. We need not just to encourage few. We need not just to encourage people to save, but to ensure those savings work as hard as possible for them to deliver that

18:00

Legislation: Remaining Stages of the Pension Schemes Bill Torsten Bell MP, The Parliamentary Under-Secretary of State for Work and Pensions (Swansea West, Labour)

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comfortable retirement. That is ultimately what this occasionally technical bill is all about. Better returns means better retirements, and there are few things more important than that this bill. This bill adds wind to the sails of some of the major changes already underway in our pension landscape. Most importantly, it pushes ahead with the shift towards larger, better governance schemes. Governance schemes better able to access and deliver returns for savers and to invest in a wider range of assets. It introduces a new value for money framework, so schemes are judged on performance and service, not just cost.

It removes one of the big barriers to people engaging with their pensions, consolidating small, inactive pension pots, and it delivers reforms to ensure people are building up a pension, not just a savings pot, with a simple default pension that do not require each of us to become a financial expert. As we approach retirement for defined benefit schemes, the bill strengthens the local government pension schemes, puts more trustees in the driving seat for managing scheme surpluses, and addresses the lack of pre 97 indexation within the PPF and the FAS.

These are real improvements, improvements shaped by constructive debate and detailed scrutiny both in this place and from across the pension industry. I again want to thank members on both sides of this House for their contributions and for the clerks for taking us through the Committee stage. I would also like to thank the Bill team Jo, Amanda, Mike, James, Sagar, Saadia and Steve and the many officials across DWP and the Treasury who have worked behind the scenes to support the government bringing forward this important legislation.

And I appreciate that it is not a short bill. Thank you very much indeed. The PPF, the FCA and the TRP have also played important roles for

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which I am grateful and I commend House. Hey.

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Hey. The question is the bill be read a third time? And I call the shadow Secretary of State Helen Whately.

18:01

Helen Whately MP (Faversham and Mid Kent, Conservative)

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Secretary of State Helen Whately. Thank you, Madam Deputy Speaker. As this bill nears the end of its journey through our house, I'd also like to take a moment to acknowledge some of the people who've played their part from the former pension Ministers, including the hon. Member for Sevenoaks and the former hon. Member for Hexham. To my hon. Friend for Wyre Forest, who can't be with us today, my hon. Friend for South West Devon who also can't be here today. And my hon. Friend for North West Norfolk, who did such a brilliant job speaking earlier this afternoon, and the hard working members of the Bill Committee, including my hon.

Friend for Mid Leicestershire. There will also be many civil servants who have worked on this bill and pensions experts who have contributed, and I'd like to thank them all for their hard work and expertise. And can I also say, finally, congratulations to the current pensions Minister, the lucky one who gets to be here to see this bill off to the other place. Madam Deputy Speaker, we on this side of the House don't agree with all of the bill, but there is a lot in it that we do welcome, particularly the parts he inherited from us, the consolidation of fragmented pension pots, the introduction of the value for money framework and the pensions dashboard.

These will help people manage their pension savings and get better returns. We also welcome the government's amendment of the bill, reflecting our new clause to index pre 1997 pensions, for which there is also significant consensus across the House. This will provide some dignity for pensioners who have seen their pensions eroded over the years, and we hope the government continues to work with campaign groups to see this through. I'd also like to thank my right hon. Friend for Herne Bay and Sandwich and my right hon.

Friend for Hereford and South Herefordshire for their representations on this. But, Madam Deputy Speaker, the bill also has some serious flaws. Nestled within the sensible reforms they inherited is a power no government should wield the power to mandate. How pension funds invest today, the job of a pension fund manager is to make the best possible decisions for their fund about where to invest. Their sole objective is the interests of those members. It is their legal duty and Mandation would change that, because mandation means the government will be able to tell pension funds how to invest their assets.

We should not for a minute underestimate the significance of this. Ministers I know have insisted this is merely a backstop, a tool they hope never to use. But a threat made just in case is still a threat. And pension trustees know it. I say to the hon. Gentleman pensions Minister, a Minister should always consider the worst thing that someone else might do in their position. In essence, I'm not a bad man. But what might a bad man do? He might be confident he won't abuse the power.

But what if someone else had it? The pension sector does not support this plan. Earlier this year, the hon. Gentleman told them, and I quote, to chillax. He may be intensely relaxed, but I do say to him he's also intensely wrong. Trustees are the custodians of people's life savings. They aren't there to carry out manifesto pledges or pet projects, and he should not put himself or any future pensions Minister in a position to tell them to, instead of forcing pension funds to invest in the UK.

Ministers should ask why they haven't been investing and then do something about that. Our amendment 15 gave them the opportunity to diagnose these problems and resolve them, but we've just seen they voted it down. In any event, they should stop making Britain a worse place to do business ramping up taxes on employment, slapping on red tape and briefing bad Budget news out for months in advance to kill confidence in every sector of the economy. As my hon. Friend said earlier, our other concern with the bill is the relationship between scale and innovation.

We agree with the need for scale, but the government should avoid blocking the emergence of new entrants and the scaling up of existing smaller players. And finally, I will mention pension adequacy. While this bill should help people manage their pension savings and boost their returns, it falls short on tackling the serious problem of people under saving for later life. There are millions of people who simply aren't saving enough for old age. The government should be acting now on this, not delaying the next phase of the pensions review and attacking pension savings at every turn.

First they came for pensioners winter fuel payments, then they came for SIPs and last week they came for salary sacrifice. And that wasn't a small tweak. The cap on salary sacrifice will net the Treasury nearly 5 billion of extra tax revenue in 20 29, 30, money that would otherwise have gone into people's pensions. Madam Deputy Speaker, we have made our points, argued our position and put amendments to a vote so we won't be voting against this bill. Third Reading tonight.

But can I urge the government to listen to the wise and many expert words that will be spoken when the Bill is debated in the other place, and use

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that opportunity to fix it? Kirsty Blackman. Thank you, Madam Deputy Speaker. I figured, seeing as I only had about 17 minutes in the Report stage, that the House deserved to hear from me again in terms of Third Reading. I'll be I'll be very brief about what our views are here. brief about what our views are here. The members spoke about people's understanding of of pensions, and I continue to have concerns about the continue to have concerns about the understanding that people have with defined contribution schemes, because it is very confusing when because it is very confusing when you are given a number of how much money is in your defined contribution scheme about what that actually will mean when you hit actually will mean when you hit retirement.

It's very different from the defined benefit schemes. And given the massive increase that we've seen in the numbers of people investing in defined contribution schemes rather than defined benefit schemes, we will continue to see issues with this. Unless there is an incredible amount of education takes place so that people can understand what it is that they might get in pension, rather than just what the total pot amounts to. The the Minister has made a number of changes to the bill that I appreciate and not not least the pre 1997 indexation for PPF the fiduciary duty announcement that he made today, I think, is incredibly helpful in clarifying for trustees what their objectives are.

He also mentioned the fact that the Abi has come up with an agreement as well, and it is in my experience of having done significant numbers of bill committees, very unusual for so many changes to be made. And I do appreciate that the Committee stage was listened to and the concerns that were raised by members all around the the room at Committee stage, some of which have been tackled during the the course of the of the progress. I have raised concerns about the short notice that we had for some of the amendments, and the fact that we did not have proper ability to scrutinise the government changes, both at Committee stage and at this stage.

Just lastly, I would like to thank Matt and Fergus, who helped me with with some of this, and I would like to say that it is rare for us to have pension bills come forward, and I'd love to to see another one shortly, probably. Given that the Minister has made commitments around fiduciary duty, I would expect that there would be a bill to follow that. He said that he expects that to be in primary legislation with guidance to follow. I think also, the adequacy review may hopefully kick up requirements for legislation to come through as as a result of this, I think this House should get more used to talking about pensions as as the generations shift, the state pension will become a smaller percentage of what people will be relying on in retirement, and the auto enrolment and defined contribution schemes mean that significantly more people will be relying on that, so ensuring that they have got the best possible outcomes for retirement is something I think that we all around the House can support.

So we need to have the legislative framework that keeps pace with how people are actually investing now for the future, rather than how people invested 20 or 30 years ago. So I, as a Minister, will be aware. I would be delighted to debate more pensions bills as they come forward, and we'll do our best to provide cross-party support wherever we can.

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The question is that the Bill be now read a third time, as many that opinion, say aye. I Connor Rand no. opinion, say aye. I Connor Rand no. The ayes have it, the ayes have it. I'll give the front Benchers a few moments to shuffle over.

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Yes.

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With the leave of the house I will bundle the size motion number three Financial Services and markets. Motion number four

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markets. Motion number four financial Services and markets. Motion number five on energy. Minister to move. I beg to move.

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The question is, as on the Order Paper as many say aye. of the Paper as many say aye. of the contrary, no the ayes have it. The ayes have it. I now come on to motion number six. Church of England General Synod, second England General Synod, second Church Estates Commissioner to move the question is as on the Order the question is as on the Order Paper, as many of the contrary. No. The ayes have it. The ayes have it. I come to motion number seven on the Church of England General Synod measures second Church Estates Commissioner to move.

The question Commissioner to move. The question is as on the order papers in that opinion say aye. Contrary. No. The opinion say aye. Contrary. No. The ayes have it. The ayes have it. I now come on to the presentation of public petitions. Petition.

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Petition. Sharon Hodgson. Thank you, Madam Deputy Speaker, on the eighth day of the UN, 16 days of activism against Gender based Violence, I rise to present a based Violence, I rise to present a petition on behalf of Washington and Gateshead South constituents on pornography. Pornography has never

18:11

Petition Mrs Sharon Hodgson MP (Washington and Gateshead South, Labour)

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pornography. Pornography has never been more accessible than it is today, and we know that what is viewed online does not stay online. We therefore must ensure that safeguards are in place so that those participating are safe, but also to protect the influence it has on the younger generation who are watching, and then go on to believe that the violence they see in pornography is normal. The petitioners, therefore, request that the House of Commons urge the government to extend safeguards applied to pornography offline, to pornography distributed online, and to legally require all pornography websites access from the UK to verify the age and permission of every individual featured on their platform, and give performers the right to withdraw their consent at any time to the continued publication of pornography in which they appear and the petitioners

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remain. ET cetera. Petition. Pornography and violence against women.

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violence against women. Petition Sarah Russell. Thank you, Madam Deputy Speaker.

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Thank you, Madam Deputy Speaker. I rise to to present a petition on Sunday Rail Services in Congleton. In presenting this petition, I In presenting this petition, I would like to thank the councillors from the Progressive Coalition on Congleton Town Council, Richard

18:13

Petition Sarah Russell MP (Congleton, Labour)

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Congleton Town Council, Richard Eady and the Congleton Sustainable Travel Group for acquiring the the relevant signatures. The petitioners, therefore, request the House of Commons to urge the Department for transport and the independent regulator, the Office of Rail and Road, to require a Sunday train service for Congleton of at least six trains each way between Stoke and Manchester, facilitated by a more equitable share of the northern train crew resource and a requirement, at least in the interim, for certain CrossCountry trains, to make an additional stop at Congleton throughout the day on Sundays, and to confirm and commit to a date when a sufficiently robust seven day timetable will resume for Congleton and the petitioners

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Petition Petition Sunday. Petition Sunday. Rail Petition Sunday. Rail services

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in Congleton. I beg to move that this House do

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now adjourn. The question is that this House do now adjourn, and I call Charlotte Cane on potential merits Charlotte Cane on potential merits of government support for the Ely Area Capacity Enhancement Scheme. Charlotte Cane.

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Charlotte Cane. Thank you, Madam Deputy Speaker, and I draw members attention to my register of interest as a District councillor for East Cambridgeshire. The outline business case for Ely The outline business case for Ely Area Capacity Enhancement Scheme shows that for every £1 invested, there will be a return of £4.89. So you may wonder, Madam Deputy Speaker, why we need a half hour debate on what is so obviously a great scheme? Yet successive governments have failed to deliver the scheme.

There have been feasibility studies, consultations,

18:15

Charlotte Cane MP (Ely and East Cambridgeshire, Liberal Democrat)

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task groups aplenty. Funding was even promised to just in time for the 2024 election, although we the 2024 election, although we could all see at the time that the many promised schemes totalled far more than the money available. So I wasn't surprised when the incoming Labour government acknowledged that the outgoing conservative the outgoing conservative government had not put funding in place for the project. £500 million is a lot of money to find, but it is a lot of money to find, but it would deliver almost a quarter of £1 billion in return.

So I hope that the government will commit to the the government will commit to the funding soon. The outline business case was submitted in March 2022, case was submitted in March 2022, after which progress was held at a red signal where it remains to this day. I was disappointed that the Ely Junction project was not one of the projects progressed in the Spending Review, but I've been heartened by the department's response to my written questions, in which they recognise the undeniable benefits of the scheme.

The Ely Area Capacity Enhancement Scheme would upgrade the railway to allow more trains to run through Ely to improve connectivity and reliability for passenger services,

18:16

Adjournment: Potential merits of Government support for the Ely Area Capacity Enhancement Scheme Charlotte Cane MP (Ely and East Cambridgeshire, Liberal Democrat)

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18:28

Lilian Greenwood MP, Government Whip, Lord Commissioner of HM Treasury (Nottingham South, Labour)

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11:00

Oral questions: Wales

House House of House of Commons House of Commons - House of Commons - 3 House of Commons - 3 December

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