Pension Schemes Bill

Sarah Edwards Excerpts

2nd reading
Monday 7th July 2025 Commons Chamber

[Sarah Edwards (Tamworth) (Lab)]

I am delighted to speak in this debate. In a former life, I was a trustee of a pension scheme and sat on its investment sub-committee. In my new incarnation, I am the chair of the all-party parliamentary group on pensions and growth.

Pensions sound boring to many, and they sound far away to the young. It might be easier to engage people if we talk about income in retirement. People are not saving enough; it is typically hard to think about, and it is a scenario that could be 30 years away for some. Albert Einstein said:

“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.”

Paying into a pension pot from an early age exponentially increases the pension pot. That is one of the reasons why I am passionate about people understanding pensions—or, rather, their retirement income—and what we can do as a Government to boost them. The sooner we start, the wealthier we can all be in retirement.

The Pension Schemes Bill aims to strengthen pension investment by supporting around 20 million people who could benefit from the reforms through better outcomes and greater value in private sector pension schemes, increasing the amount available to them. I support the aim of the Bill to enable the reforms of investment management in the local government pension scheme in England and Wales. The aim of these reforms is to ensure that the management of LGPS investments delivers the full benefits of scale, including greater expertise, better value for money and improved resilience.

One of the key engines of growth will be unlocking the potential in our local authority pension funds to direct investment towards the UK and, in particular, local regional development. It is vital that investment reaches beyond those areas that fall under mayoral control. I therefore encourage the Minister, in taking the Bill forward, to foster emerging ideas on how local authority pension pools can help to review potential local investment opportunities to achieve the best outcomes.

[Matt Rodda (Reading Central) (Lab)]

My hon. Friend is making an excellent speech. She has convened a very powerful group—indeed, the former City Minister played an active part in its most recent meeting. Does she agree that this Bill is particularly important for our high streets and many other entrepreneurs in our local communities, to try to find new forms of investment to help them boost business?

[Sarah Edwards]

I thank my hon. Friend for that contribution. It is absolutely essential that we ensure that investment is getting to our high streets and towns, not just our cities, and that people see that change when they walk around.

I urge the Minister to take a supportive approach towards pools that are currently in transition, since they cannot necessarily reallocate assets while they are not members of the new pool that they are going to join. Their investment strategies are therefore effectively on hold until they join the new pool. I also ask him to liaise closely with colleagues in the Ministry of Housing, Communities and Local Government during the process of local government reorganisation. Whatever the new framework is for local government in Staffordshire, the pension fund will still be there. Local authority workers in my Tamworth constituency are part of the Staffordshire LGPS. It is one of eight authorities that are jointly own LGPS Central, which last year reported £29.9 billion in assets under management. The sheer scale of such funds is what underlines the link between pensions and growth.

The British growth partnership, announced in October 2024 by the Chancellor of the Exchequer and the Secretary of State for Business and Trade, sits alongside the British Business Bank, and its primary goal is to stimulate investment from UK pension funds into high-growth, innovative companies, thereby supporting the UK economy and creating new jobs. The partnership aims to raise hundreds of millions of pounds from institutional investors, including pension funds, to invest in UK venture capital. That will be supported by a cornerstone investment from the Government. Investments will be made on a long-term, fully commercial basis, independent of Government influence, leveraging the expertise and market access of the British Business Bank to identify potential companies. That will offer pension funds fruitful investment opportunities that deliver for their members as well as for the British economy.

By unlocking domestic investment, the partnership seeks to enhance the UK’s competitiveness in future industries, particularly in the technology and innovation sectors. I am fortunate that in my constituency I have an innovative technology company called PI-KEM, which has grown its business and workforce over the past 34 years. By linking pension funds to growth, it will be possible to have more such companies creating opportunities for skilled employment that sees Britain at the forefront of markets.

However, there is one area of caution: a trend towards Government finances being pooled into funds of which there is limited parliamentary oversight. While I understand and recognise the power of the larger funding pools, I must raise my concerns over how the funds will be reported on and how we will ensure that both taxpayer and pension member money is stewarded appropriately through the British growth partnership.

As the chair of the all-party parliamentary group on pensions and growth, it has been a great pleasure to meet with colleagues and hear from a variety of industry sectors about where they see the strengths and challenges in these proposals. I take this opportunity to thank the Minister for agreeing to attend a meeting of the APPG to assist us in gaining a greater understanding of the approach that he is taking in the next stages of the discussion of the Bill. I also take this opportunity to invite colleagues to come along and join us on Wednesday.

Chapter 2 in part 1 of the Bill reforms the regime governing trustee payments of surplus to employers and enables surplus to be paid out of more defined-benefit schemes. It is stated that trustee oversight and the regulatory framework will ensure the responsible and secure sharing of surplus funds.

The triennial revaluation of a scheme may determine that there is a deficit or a surplus, but despite being calculated by highly skilled actuaries, both are only a snapshot in time. For example, a scheme being evaluated this spring would have reflected the moment at which the US President’s decision to introduce tariffs hit asset prices. An alternative set of circumstances could have created an apparent surplus. I have been through this process as a trustee, and I have put on record—and must put on record again—my scepticism about whether the potential figure is the true one when it comes to the surplus. I ask the Minister to reassure my constituents, and pension scheme members in general, that he recognises that the interests of scheme members must always be the priority. It would also be welcome to understand how “surplus” is to be defined and calculated, as I have received at least four different versions by canvassing the pensions industry.

In chapter 4 of part 2, provision is made for providers of automatic enrolment and pension schemes regulated by the Financial Conduct Authority to change the way in which a pension pot is invested, to transfer a pot to a different pension scheme with the same provider, or to transfer a pot to another provider without individual member consent where it would be in the best interests of members, taken as a whole. I welcome the fact that the Bill states that a range of safeguards and procedures must be followed before an override or transfer can occur, as sadly, it is often difficult to engage members in the details of their pension. That is particularly true where a number of small pots are accrued early in a working life, which has become the norm in many communities with the rise of insecure work.

As such, I also welcome the efforts that this Government are making to create fair and secure work, because when that is coupled with a well-funded pension, working people are protected not just at work but when they sit on their retirement beach, thinking about how their working career contributed to that welcome rest. Will the Minister ensure that the safeguards are clear and given real prominence in discussion? There is a real need for such fallback powers, but there also needs to be a positive narrative about encouraging engagement.

Chapter 1 of part 2 confers powers on the Secretary of State to make regulations to evaluate and promote the provision of value for money by pension schemes. It will enable defined-contribution occupational schemes to be compared based on the value they provide, rather than just their cost. There is an argument that too high a focus on cost—management fees, for example—has had a detrimental effect on investment by pension funds. This stems from an approach that says that if the employer chooses a fund simply based on cost, the fund may look to minimise that cost, and may achieve that through the tracker funds that have come to characterise much of the market. That is potentially why little investment has occurred in the UK so far. Therefore, by pushing forward on the value for money agenda, the Minister can encourage more investment in the UK, strengthen competition in the sector, and ultimately offer better returns to members.

Chapter 3 of part 2 will require multi-employer DC pension schemes to participate in a default fund of at least £25 billion if they are to be used for automatic enrolment purposes. The aim is to encourage smaller funds to merge into larger ones that are more likely to invest in the productive finances of the UK. I suggest to the Minister that there are two issues here, the first of which relates to the market for assets. In any market, the price of a good rises if there is a shortage of that good. In this instance, the Government are being innovative and asking the pensions industry to invest in productive assets, which can include infrastructure and regeneration schemes that are vital to the places where people live. It is therefore vital that we balance the pace and scale of the development of new profitable investment opportunities with the use of any regulations to push investors in a particular direction.

To use an analogy, the Tamworth is a rare breed of pig. Unless an appropriate opportunity were available to expand supply first, any ministerial direction to buy stock of the Tamworth pig would just result in a spike in its price and poor returns for investors.

[Matt Rodda]

My hon. Friend is making a wonderful speech. May I also say that there is a wonderful pig from Berkshire as well, which has distinctive markings? However, moving away from animals, perhaps my hon. Friend wishes to say a little more about the success of the type of legislation she describes in Canada and Australia. It has delivered real value in those countries’ economies and real value for pension savers.

[Sarah Edwards]

Absolutely. There have been some really interesting changes arising from those countries’ reviews of their pensions markets, and I will be very interested to hear what the Minister has to say about what he has learned from those changes. Certainly, in the meetings that we have attended, we have learned a lot about some of the various initiatives that are driving real growth and real change in those countries.

I urge the Minister to focus on the process of expanding the pipeline of suitable projects, while building on the Chancellor’s success—and, I am sure, his own—in creating a voluntary framework for industry and Government through the Mansion House accord.

[Dame Meg Hillier]

My hon. Friend has referred to good opportunities. I think it was Islington council’s pension scheme that invested in social housing in its area. That gives a good return because, by and large, people pay their rent—it is a steady return over a long period of time. Given the desperate need for housing in this country, does my hon. Friend agree that that would be a real opportunity for these funds as they get bigger?

--- Later in debate ---

[Sarah Edwards]

I absolutely agree. It is incredibly important that we make sure those investments are being driven towards the things that are going to change lives, and building houses will change lives. The other thing that my hon. Friend will be very aware of is the fact that the state pension is calculated on the basis that people are going to own a house in retirement. As we know, we are heading to a point at which many people will not own a home and their income in retirement may therefore not be enough, so we need to be alive to that situation.

In conclusion, this Bill offers a great deal to my constituents, with the prospect of better pensions through investing for the future so that living standards are higher. For younger generations, there is a real need for investment now in the long-term future of the British economy, so that they can eventually retire with an appropriate income to sustain them. There is also a need to channel that investment beyond our major cities and mayoral authorities to our shire districts, in order to deliver the change that lies at the heart of this Government’s mandate, and the Bill offers an opportunity to do that. I believe that it offers lots of positive opportunities, but as always there will be challenges. Like a good pension fund trustee, I ask the Minister to take the Bill forward with a listening ear as he seeks to link pensions and growth for the long-term benefit of us all.

Household Support Fund

Sarah Edwards Excerpts

Wednesday 31st January 2024 Westminster Hall

[Sarah Edwards (Tamworth) (Lab)]

It is a pleasure to see you in the Chair, Mr Hosie, and to be making my first Westminster Hall speech in a debate secured by my right hon. Friend the Member for East Ham (Sir Stephen Timms).

I am not alone in this Chamber in expressing deep concerns for my constituents, who face a cost of living crisis that they neither asked for nor deserve. Just this afternoon, I was speaking in Parliament with the Trussell Trust, which warns of an unprecedented level of demand for food banks across the country. In my constituency, the demand for its food banks has risen by 44% since 2022 and by an alarming 101% since 2018.

I have been heartened and genuinely inspired by the community spirit shown in Tamworth during these tough times by the work of the Community Together CIC, led by Lee Bates; the Tamworth Co-operative Society, which donated stock to produce 450 food parcels for children and their families at Christmas; and the Heart of Tamworth community project, which runs weekly lunch clubs for those who are lonely, isolated and vulnerable. The Manor House project has played a crucial role in our community, offering counselling services, a food bank and many other initiatives. My constituent Liz Wadsworth created the community-run Tamworth Pantry, which has repurposed an old bus into a mobile community support station.

Now is not the time to withdraw support from struggling households. We need assurances from the Government that the household support fund will continue past March 2024. Between April 2023 and March 2024, Staffordshire County Council will have received just over £11 million from the household support fund. If the fund is not continued, it is extremely likely that councils will not be able to afford to replace that funding. A Lichfield District Council cabinet member wrote to me on the state of the council’s finances:

“How can councils fill in the gaps when it comes to supporting the most vulnerable, when they are struggling with the pressures of providing statutory services under the extreme cuts of the last 10 years?”

The Government must extend the household support fund.

[Stewart Hosie (in the Chair)]

I call Preet Kaur Gill. Is that Preet? [Interruption.] Apologies! I call Yasmin Qureshi.

Autumn Statement Resolutions

Sarah Edwards Excerpts

Monday 27th November 2023 Commons Chamber

[Sarah Edwards (Tamworth) (Lab)]

I am grateful to be able to make my maiden speech in this debate on the autumn statement.

For many people, the primary concern is how they will get through to the end of the month. Pockets are empty, cupboards are bare and many are filled with despair. I must apologise, for I know a maiden speech should start with a more uplifting tone, but I would be remiss, in my place on these green Benches, if I forgot to be a voice for my constituents and simply glossed over the crisis in which they find themselves.

It is only right that I pay tribute to the many community organisations that have stitched together the supportive fabric that many now rely upon and the threads that hold it together, such as Heart of Tamworth, whose hub provides a solace from that despair, whether it be through the dementia café or the food pantry. Like a quilt, it always has a warm welcome.

The people of Tamworth and the villages voted for a prosperous future and for change, and it is to my constituents that I turn first. I thank them for placing their trust in me to restore their voice in this House. I am immensely proud to represent the great constituency of Tamworth, complete with its spectacular villages, and I will endeavour to champion the issues that matter to my constituents at every opportunity.

I am proud to be Tamworth’s first female MP. Women have been able to stand for Parliament only since 1918. To date, just 563 female MPs—not even amounting to a full House—have been elected. That sets my recent by-election victory, with the second largest swing since 1945, in an even starker light, making me even prouder to have been elected against the odds. I draw a parallel with my predecessor Brian Jenkins who, also as a by-election candidate, was elected against the odds in 1996. I am grateful to him for his support during my campaign.

I was elected with the knowledge that Tamworth boasts a unique history, having been fortified in 913 with the building of Tamworth castle by Æthelflæd, the lady of the Mercians, whose leadership legacy left behind that stunning heritage asset adored by the town and visitors alike. Our sense of identity is rooted in the stories of the past, and the historic market town of Tamworth is proud of its medieval heritage. With my own passion for heritage, the honour of representing a place with so much tangible heritage is hard to articulate, but I intend to find creative ways to support the regeneration of Tamworth through its priceless heritage and, in particular, its high street, which so many people have told me needs regenerating. People like Sam, a female entrepreneur who runs Roasters, which has been a staple part of the high street for more than 30 years, ensuring that people can always get a hot pork sandwich, complete with the crackliest, crackly crackling they will ever crunch. Or women like Sarah, who runs Christopher’s and provides the town with a gorgeous boutique hotel and restaurant. She kept the business going despite the turmoil that faced hospitality during the pandemic.

The Tamworth Co-operative Society is still an integral part of the town and has featured greatly in its development. Founded by philanthropist and social entrepreneur William MacGregor in 1886, it championed, above all else, fair prices and quality products for the poor and working classes, flying in the face of the profiteering shopkeepers of the time.

As a parliamentarian, it is also important to be humble and not to brag about my constituency, so I will refrain from telling the House that we are also home to the Tamworth Tap, which this year was named by the Campaign for Real Ale as the country’s best pub.

But a high street cannot flourish without people visiting and feeling safe. Concern about antisocial behaviour and a desire to have a closer relationship with local police has made my constituents feel that their town centre needs more visible policing. It is for this reason that I would like to pay tribute to my predecessor Sir Robert Peel, the distinguished parliamentarian and first leader of the Conservative party, who was known for his commitment to his country first and his party second. He was a visionary who sought to improve the social system that supported communities, establishing the Metropolitan police on the principles of policing by consent and its place within the community. The well-known principle that the police are the public and the public are the police is still, to this day, what makes policing in this country stand apart from that in many others.

It is therefore all the more troubling that Tamworth no longer has a police station with a front desk or custody cells, and my constituents have raised with me their concerns over antisocial behaviour and safety within their communities. Policing should have a community focus and should be accessible; it should give people the sense that the police reflect them and their needs. That is why I campaign to have a front desk reopened in Tamworth and for the re-establishment of community policing.

The communities I serve include incredible villages such as Elford, Edingale, Whittington, Drayton Bassett and Shenstone, whose community library boasts an incredible programme of activities and a rather fancy coffee machine that is such a repeat draw that it has almost single-handedly stamped out late returns.

Colleagues will know that I am a devoted dog owner and, as a former Crufts competitor, I have set my sights on the much-coveted, highest political accolade: Westminster dog of the year. Tamworth is a proud dog owning constituency, and I met many along the campaign trail, including little Reggie the lost Pomeranian. Estimates by campaign colleagues who were out door knocking put Tamworth dog ownership at approximately 100%, although I am sure the House of Commons Library would rightly disagree with such a loose application of anecdotal evidence.

In conclusion, Tamworth has a rich, strong history, and my constituents are rightly proud of it. However, reflecting on the current cost of living crisis and the desire for the opportunity to live a life less burdened, they rightly want where they live, and the community they are part of, to thrive. The people of Tamworth voted for a fresh start and a positive vision for their town and villages. During the campaign, they were clear in setting out their priorities for change, and having spent over a decade giving working people a voice in the workplace, I intend to be their voice and champion in the constituency and here at Westminster. Thank you, Mr Speaker.