Pension Schemes Bill (Sixth sitting)

John Milne Excerpts

Committee stage
Tuesday 9th September 2025 Public Bill Committees

[John Milne (Horsham) (LD)]

To add briefly to the comments of my hon. Friend the Member for Torbay, I emphasise that with new clause 3 we are taking a non-prescriptive approach. It says that

“the Secretary of State must have regard to the need to identify and mitigate barriers faced by new market entrants in the defined contribution pensions market.”

It is a very gentle ask. We are all very aware of the issues today, but will they still be in everybody’s mind in the future?

[Torsten Bell]

I will come back on the question about the word “product” and definitions. I reassure the Committee that I will go away and make sure that is clear if it is not clear enough already.

The core Liberal Democrat question is, are we baking innovation in? It is a good question for us all to be asking. I think the answer is yes. To broaden the conversation out slightly, we want to see innovation from existing providers as well. We anticipate that there will still be 15 or so large providers in the 2030s. That is still a highly competitive market. Not just looking at costs but also at customer service and all the rest in the value for money regime should be a spur to that innovation. That is a key part of the set of clauses we were discussing last week.

I should explicitly note that the scale tests do not cover the most obvious innovation that is likely to come in the market in the coming years, which is CDC schemes. By their nature, if they are to be successful, they will get to scale anyway, but to make their path easier and to be clear that we do see a role for CDC innovation moving forward, those are not part of these requirements. The innovation pathway exists for exactly this reason, as we have discussed.

Several Members have raised a question about consultation. I confirm that there is a requirement for a public consultation, which should certainly learn lessons that go beyond the experience of the pensions industry to the wider financial services sector—lessons of competition entry. We talked about that in the banking sector earlier, but the same thing would apply, for example, to other parts of the insurance sector and others. We will take that away. We are very conscious at the moment, in our wider approach to regulation, of providing earlier authorisation, where that can be done. I suspect we may come back to that in the superfunds discussion later this week.

Amendment 112 agreed to.

Amendments made: 113, in clause 38, page 44, leave out lines 21 and 22 and insert—

“(a) the scheme in question has strong potential to grow so as to meet the scale requirement under section 28A,

(aa) the scheme in question has an innovative product design, and”.

This amendment ensures that the eligibility conditions for new entrant pathway relief are more precisely articulated.

Amendment 114, in clause 38, page 44, line 34, leave out from “of” to “(including” in line 35 and insert “ “strong potential to grow” and “innovative product design” ”.

This amendment is consequential on Amendment 113.

Amendment 115, in clause 38, page 44, line 36, leave out from “has” to end of line 37 and insert “strong potential to grow or an innovative product design”.

This amendment is consequential on Amendment 113.

Amendment 116, in clause 38, page 45, leave out lines 1 and 2.—(Torsten Bell.)

This amendment is consequential on Amendment 129.