Pension Schemes Bill

Lord Hendy Excerpts

Thursday 5th February 2026 Grand Committee

I thank the other noble Lords who have tabled amendments in this group in advance for their contributions, and the Minister for her response. I beg to move.

[Lord Hendy (Lab)]

My Lords, I shall speak to Amendment 218C; I express my gratitude to the noble Baroness, Lady Janke, for supporting it. This amendment would require the Secretary of State to make regulations to ensure that pension schemes invest their funds in a manner that is

“consistent with those provisions of human rights and international law which have been ratified by the UK”.

It would require scheme managers to take appropriate steps to identify, prevent and mitigate the risks that investments may contribute to adverse human rights impacts. These obligations would apply to investments globally.

As the Prime Minister of Canada pointed out in his powerful speech at Davos, it seems

“that the rules-based order is fading, that the strong can do what they can and that the weak must suffer what they must”.

At such a time, we are under an obligation to do whatever we can to uphold the rule of law. The rule of law includes, of course, the duty on nation states to honour and put into effect the obligations that they have explicitly undertaken to observe by ratification of the relevant treaties.

The great jurist Lord Tom Bingham made state compliance with international obligations his eighth principle of the rule of law in his seminal book of the same name. He said:

“The rule of law requires compliance by the state with its obligations in international law as in national law”.


Consistent with that, the current Ministerial Code, binding on British Ministers, requires them as an overarching duty to comply with the law, including international law and treaty obligations laws.

This point was reinforced by my noble and learned friend the Attorney-General in the House when he said of compliance with international law:

“We should all be immensely proud of it, and this Government will seek at every turn to comply with our obligations”.—[Official Report, 26/11/24; col. 680.]


He developed that point in a lecture to the Royal United Services Institute on 29 May 2025, in which he gave this rejection:

“The claim that international law is fine as far as it goes, but can be put aside when conditions change ... The international rules-based order soon breaks down when States claim that they can breach international law because it is in their national interests … The argument … that the United Kingdom can breach its international obligations when it is in the national interest to do so is a radical departure from the UK’s constitutional traditional, which has long been that ministers are under a duty to comply with international law”.


Today, 81 years after the end of the Second World War, in which tens of millions of people gave their lives, the global edifice of international law, erected specifically to prevent the repetition of such horrific events, is in tatters. No matter how justified the perpetrators believe it to be, the fact is that Russia is conducting war on Ukraine; the Israeli state has attacked Gaza and permitted attacks on Palestinians in the West Bank; and the United States has attacked Venezuela and abducted its president, and threatens military and economic attack on Greenland, Iran, Cuba and other states. Iran is waging war on its own people. There are many other conflicts around the world where the United Nations conventions are flouted, humanitarian law is breached and war crimes are committed. As legislators, we have a duty to do what we can to sustain international law and restore its impeccable norms throughout the world.

Amendment 218C is intended to play its part. The pension schemes to which the amendment would apply include the Local Government Pension Scheme, which is one of the largest public sector pension schemes in the UK, with more than 6 million members and managed assets of some £392 billion. It is made up of 86 pension funds, most of which are, as I understand it, administered by elected councillors sitting on a pensions committee. There are other public sector pension schemes, too—they are, like the LGPS, equally emanations of the state—but the amendment would also apply to private sector schemes. It is the UK’s duty to ensure that the entities it regulates and over which it has power do not place it in a situation in which it is non-compliant with its international obligations—in other words, obligations that it has voluntarily ratified and by which it continues to be bound.

The provisions of this Bill evidence the regulatory power that the UK state exercises, and can exercise, over pension schemes within its jurisdiction. The Government have the power to ensure that the pension schemes regulated by the Bill do not put the United Kingdom in breach of its international obligations. The UK must adhere to its fundamental international law obligations in all circumstances—obligations such as the prohibition of genocide, the prohibition of war crimes, the upholding of the Geneva conventions, the elimination of racial discrimination and apartheid, and respect for the right to self-determination. That goes without saying. However, the UK must also refrain from rendering aid or assistance to another state’s serious breaches of these peremptory norms. It must co-operate with other states to take all reasonably available measures to bring to an end any such violations of those peremptory norms.

The amendment would require the Secretary of State to produce guidance to administering authorities to give effect to the duties, by requiring an end to investments in companies that aid or assist in the commission of grave violations of international law. It would also issue directions to administering authorities in the event of non-compliance. Local administering authorities must ensure that their investment strategies give effect to the prevention and non-assistance duties. They must refrain from making new investments in companies involved in serious breaches of international law and take reasonable steps towards divesting from such companies.

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I echo the wise words of the noble Lord, Lord Pitt-Watson—it is a pleasure to hear him participating for the first time in the Committee, and I am sure we look forward to many more constructive contributions from him—about the issues relating to Amendment 218C and the realities of pension fund investing, where the vast majority is in passive investments. I also caution about the uncertainties involved in making judgments about what international law does and does not say, and about temporary or more serious findings. There is often an indicative finding, which is undone later. It seems to me that expecting the Government or trustees to be able to assess what international law says when there is so much uncertainty could be the thin end of the wedge in terms of putting extra duties on trustees—they already have so many—and may cause significant difficulties or extra costs. That is not to say that I disrespect or have concerns about responsible investing per se. I think there is a role, and it will be up to trustees to make their own decisions in this arena, rather than for those to be mandated. I look forward to hearing other noble Lords speaking and to the response from the Minister.

[Lord Hendy (Lab)]

I am sorry to interrupt the noble Baroness, but I emphasise that this amendment is to propose regulations that will be drafted by the Secretary of State. One would expect the Secretary of State to determine whatever issues there are about international law. By the way, international law itself is quite clear. It is about whether the factual situation on the ground meets the particular requirements of international law, but I think that could all be dealt with in regulation.

[Baroness Altmann (Non-Afl)]

I understand the point that the noble Lord is making. I am just not convinced that one would want to put this type of responsibility on the Government. Of course, judgments in international law change from time to time, and trustees are investing for the very long term. I recall the example of Myanmar given by the noble Lord, Lord Pitt-Watson. There are difficult issues that I understand the Government might regulate for. How pension trustees then build that into their asset allocation is another layer of complexity that I have concerns about, but I certainly have every sympathy with the intentions of the noble Lord, Lord Hendy, and the noble Baroness, Lady Janke. It is a difficult one. I just caution that getting to that level of prescription could be the thin end of the wedge for pension trustees, who already have so many responsibilities upon their shoulders.