Pension Schemes Bill

Blake Stephenson Excerpts

2nd reading
Monday 7th July 2025 Commons Chamber

[Blake Stephenson (Mid Bedfordshire) (Con)]

We all share in the ambition to ensure the sustainability of pensions, and to provide the best possible income for all our constituents in retirement. Given the time, I will keep my comments reasonably short, but having come to this place from the City—though I did not work in the pensions industry—and as an officer of the all-party parliamentary group for pensions and growth, I look forward to providing more detailed scrutiny of the Bill as it progresses through the House.

I rise to share concerns about the Bill, some of which have been shared with me by City institutions. First, I am concerned that this Bill demonstrates a broader problem with this Government’s approach to the economy. Rather than seeking to support free enterprise and entrepreneurship in order to grow our economy, the Government seek state-led interventions, and want to direct funding to Government-approved investments. That is the wrong approach, as many hon. Members have said this evening.

On scale and asset allocation reforms, I am concerned that the Government seem to believe that they, and regulators, should direct how pension funds invest, rather than schemes acting in the best interests of their members—a matter raised by my right hon. Friend the Member for North West Hampshire (Kit Malthouse). Trustees who are directed to invest in assets by the Government or regulators may need to be protected by safe harbour provisions in the event that their investments perform less well than alternatives that they may have chosen. Has any consideration been given to such safe harbours in the Bill? It is not clear why these reforms are necessary. In his closing remarks, will the Minister say why, given that policies such as the value-for-money tests and small pots consolidation are already in progress, he feels that these additional requirements are needed?

I am also concerned to find that Ministers propose making it a statutory requirement for schemes to follow a specific route when considering transferring into a superfund. Trustees have a fiduciary duty to their members—we have heard a lot about that in the debate—and this direction from Ministers runs counter to that duty. Will the Minister provide assurance to the House on those points?

Turning to the sustainability of UK pensions, I would welcome further clarity from Ministers on their proposals for powers to pay a surplus to an employer. How confident is the Minister that the thresholds set for the release of surplus are sufficient to protect member benefits? That is particularly important, given that scheme surpluses have emerged only recently. Does the Minister plan to specify the authorised uses for surplus return? For example, will surplus be protected from being paid to overseas parent companies?

I welcome the Government’s desire to ensure that our pensions system is sustainable and contributes to UK economic growth. I am just not as enthusiastic about some of the Government’s instincts to deliver Government-led investment, at the expense of market-led growth. I look forward to scrutinising the Bill further as it progresses.