Pension Schemes Bill

Baroness Noakes Excerpts

Report stage
Monday 23rd March 2026 Lords Chamber

[Baroness Nichols of Selby (Lab)]

My Lords, I am just going to ask a question because I am slightly confused. The noble Baroness did say that it was not just a problem of this Government, but could she explain why the previous Government did not take this on?

[Baroness Noakes (Con)]

My Lords, I have added my name to the amendment of my noble friend Lady Neville-Rolfe, and I congratulate her on pursuing this important topic. I will make just three brief points in support of the review that my noble friend’s amendment calls for.

First, we need greater transparency about the current and future costs of public sector pension obligations. The Government’s Whole of Government Accounts provides some information, but it is massively out of date—the latest available are for 2023-24, and the only certain conclusion from those accounts is that the value of future pension liabilities is so dependent on the underlying accounting and actuarial assumptions that the numbers have no real meaning. That is why the Public Accounts Committee of the other place has constantly called for more information to be given on the gross cash amounts and timing of the pension liabilities—but so far, the Government have refused.

Secondly, the real question is not about numbers—interesting though they are to people such as me—but a political one. It is a fact that defined benefit private sector pensions are now unaffordable and will likely never be seen again in the private sector. How fair is it that the private sector pays the taxes that fund the public sector pension benefits that cannot be afforded in the private sector? How long will the British public accept that?

Thirdly, the Government’s policies are biased against private sector pension provision. The private sector has had to pick up the tab for Gordon Brown’s pension tax raid and the regulatory burdens imposed by the Pensions Regulator. It has had to fund the huge deficits that emerged after the long period of low interest rates, as well as the Pension Protection Fund. The Chancellor’s latest raid on salary sacrifice schemes with national insurance was aimed squarely at the private sector. Little of this ever affects public sector pensions. However, when the rules that affect all employees start to impact public sector employees—for example, judges and doctors—the Government bail them out. This is a policy bias that does not stand up to scrutiny. My noble friend’s review is long overdue.