Pension Schemes Bill

Debate between Lord Willetts and Baroness Bowles of Berkhamsted

Committee stage
Monday 19th January 2026 Grand Committee

[Lord Willetts (Con)]

I am not against such payments. As I say, I think this is highly discretionary—there would be a negotiation. I absolutely understand that argument, and we have all received letters from the people suffering financial distress in some circumstances because of not having pre-1997 inflation protection. But I just want to bring in another consideration and try to find out where it would fit in when the employers or the trustees are reaching a decision.

The Government have a policy, or rather we now have on a cross-party basis, a successful policy of auto-enrolment. The levels of pension contribution to the next generation, who are not in these schemes, are way lower than the pension contributions that have generated these large surpluses. It would be great if we could see increasing contributions. Where might a decision fall if an employer says, “We have now turned our scheme into surplus because of the work of the company, and one thing we could do with the money is to put some enhanced contribution into the auto-enrolment pensions of the next range of employees, whose pension rights at the moment will be far lower than those of the people covered in this debate”?

[Baroness Bowles of Berkhamsted (LD)]

I am quite pleased to follow the noble Lord, Lord Willetts, because I feel that we are fishing slightly in the same pond. I added my name to the amendment proposed by the noble Baroness, Lady Altmann, and I support doing something for the pre-1997 people. When you look at something as long-term as pensions and you have different cohorts coming in, moving along and coming out, you have to somehow get into cohort fairness. You will always have the circumstance that people have paid into something and then they get something out when there is something else in the pot. We will come to this even more so when we start to deal with private assets, so I shall not go on at length here, because I will go on at length there. I am in the same camp as the noble Lord, Lord Willetts, in thinking that you do not say that it is clean cut and these people are in and those people are out—you have to look at fairness more broadly across the piece.