Budget Resolutions

Debate between Torsten Bell and Richard Tice

Wednesday 26th November 2025 Commons Chamber

[Richard Tice]

The truth is that if we carry on going this way, nothing will be affordable, because this Chancellor is heading us towards bankruptcy as a nation. The reality is that nothing becomes affordable if we go bust under the Minister’s and the Chancellor’s mismanagement of this economy, so we need to change course, because all the data is bad.

I cannot believe the borrowing numbers, Madam Deputy Speaker! The OBR is forecasting that borrowing in this year alone will be some £21 billion higher—

[Torsten Bell]

It will fall every year!

Pension Investment in UK Equities

Debate between Torsten Bell and Richard Tice

Tuesday 25th November 2025 Westminster Hall

[Torsten Bell]

He may not have been paid at all. His focus at the beginning of his remarks on growth and one of its key enablers, investment, was right. If we stepped back and forced ourselves to ask, “What is the one thing the British economy needs more of?”, it would be public and private investment. As several hon. Members have said, the UK has the second largest pension scheme in the world, worth £2 trillion. It is our largest source of domestic capital, underpinning not just the retirement we all—or at least most of us—look forward to, but the investment on which our future prosperity depends.

That is why this Government launched and concluded a review of pensions investment within a year of taking office. Those reforms are now being taken forward through the Pension Schemes Bill, as the hon. Member for South West Devon (Rebecca Smith) pointed out. First and foremost, the Bill includes measures to deliver bigger and better pension schemes in the DC market. It requires multi-employer defined contribution pension providers to hold at least £25 billion in assets by 2030 or to be on track to do so by 2035.

That requirement will drive scale and sophistication in workplace DC schemes so that they are better positioned to invest in a fuller range of asset classes, including specialist private markets such as venture capital, which we have not heard much about today but which are key. The biggest gap in UK capital markets is growth finance: the gap that holds back our science and tech start-ups, scale ups and pre-initial public offering companies. That does not take away from the challenges we are raising about public markets, but if we look at our capital markets as a whole, that is our biggest gap.

Pensions can be a key source of funding for those economically critical investments and sectors, which my hon. Friend the Member for Buckingham and Bletchley (Callum Anderson) set out, as he has done many times in the discussions on the Pension Schemes Bill. This is not just theoretical; it is actually starting to happen. Legal & General is investing in post-quantum cryptography and Nest is investing in energy generation. Last week, the Chancellor and I met with Aegon UK, NatWest Cushion and M&G, which have all confirmed that they will invest £200 million in the British Growth Partnership, a fund managed by the British Business Bank investing in cutting edge British businesses and building on British strengths in areas such as clean energy, advanced manufacturing and the medical technology that other Members have talked about in the past.

As we have heard, Members are well aware of the Mansion House accord, a voluntary commitment by 17 major DC funds to invest 10% of their main default funds in private assets by 2030, including 5% in UK private assets. That will boost investment across a range of asset classes, including growth market equities, which we have not touched on much today. That is welcome news driven by a focus on giving savers better returns and showing how pension funds can contribute directly to making Britain the best place to start up, scale up and ultimately list companies. I should emphasise that we should think about our capital markets as a ladder up which firms can climb. Our job is to make that climb easier, not just to focus on the ultimate destination.

Several Members raised the question of transparency. The Pension Schemes Bill includes a new framework under which DC funds will need to disclose their investments in more granular detail, including UK-overseas and asset class split. We will be able to see in more detail what individual schemes are doing. We are doing that so that we can measure their value for money. For the first time, we will be able to see where those funds are invested.

Finally, as Members know, the Bill includes a reserve power, which has been discussed today, to ensure that the change that the pension schemes themselves say is needed in the interest of members happens. I will repeat what I said on the “Making Money” podcast—it is very exciting that the hon. Member for South West Devon had time to tune in. I am confident that this power will not need to be used, given the progress the industry is already making. It is designed as a proportionate backstop to the commitments that the industry has already made, with strong safeguards to protect the interests of pension savers.

On mandation, I note—as gently as possible, given the excellent tone of this discussion—that I have spent much of the last six months hearing strong opposition to any mandation backstop while hearing, often from the very same people, language that does not directly contradict that, but gets close to calling for mandation, whether it is social housing, public equities or anything else. I just gently note that tension before as gently moving on to set out some of the wider steps that the Government are taking to support our capital markets, because they go far beyond pensions. It is important to note that although UK equity markets have faced some challenges in recent years, London’s markets remain some of the deepest and most liquid in the world. We want to build on those strong foundations and make the UK as attractive a destination as possible for companies to start, scale and stay. There is a danger here: we need to make sure we are having this discussion about the change we need to see, while also celebrating many of the real strengths that exist in London’s capital markets.

[Richard Tice]

Is the Minister aware that the quantity of listings on the London stock market has collapsed by about 80% in the last decade, and that the number of companies listed on AIM—the alternative investment market, which was the original growth market 40 years ago—has fallen to a 25-year low, so something fundamental is going wrong with our listed markets?

[Torsten Bell]

I am. I will just gently say that many people, when discussing the reasons for that, point to a policy of Brexit delivered without any ideas about how it should be delivered in a smaller, home market and without any plans for the future. I would probably pause on that before I started offering anyone views on anything at all.

My Treasury colleagues have already delivered an ambitious programme of reforms: modernising UK listing rules; establishing the private intermittent securities and capital exchange system—PISCES—to support private companies to scale and grow as a stepping-stone to public markets; and making it easier to raise capital and IPO in the UK with new prospectus rules from January of next year. To come directly and more fairly to the question that the hon. Member for Boston and Skegness (Richard Tice) raised, I think it is important to celebrate the fact that we have seen some of that translate into positive momentum recently. Hon. Members will know that the stock exchange has had a very strong year, outperforming most of the rest of the world. We saw listings from Fermi America and Shawbrook last month, and there are other exciting companies in the pipeline. I now regularly see my hon. and learned Friend the Economic Secretary to the Treasury in confetti-filled photographs from the stock exchange, and I look forward to seeing many more in the years to come. I encourage hon. Members to go and engage in similar activities.

Our capital markets are not just about celebration and ceremony; they are critical in connecting retail investors’ capital with businesses in the way that several hon. Members mentioned. Investing offers a powerful way for people to make their money work harder and share in growth. That is why the Government are bringing forward measures to get Britain investing again.

The right hon. Member for North West Hampshire (Kit Malthouse) raised a point, which I have heard him discuss before, about risk appetite and the incentives that people have. I would say that if we look at the evidence from the last 25 years, we see that it is not the strength of the incentive that is the issue. Many people holding cash ISAs would have made very significant returns if they had held that in equities instead. I will give an example. If someone, each year since the introduction of ISAs, had put £1,000 into an equity ISA rather than a cash ISA, they would be £50,000 better off. The issue is not purely about incentives, and I think focusing there would miss some of the wider changes we have been seeing, but I am always eager to hear about what more can be done.

What we are doing is working closely with the FCA and rolling out a scheme of targeted support ahead of ISA season next year. That will represent the biggest reform of the financial advice and guidance landscape—mentioned by the hon. Member for South West Devon—in more than a generation. It will revolutionise the support that consumers can receive to invest.

Mansion House Accord

Debate between Torsten Bell and Richard Tice

Tuesday 13th May 2025 Commons Chamber

[Torsten Bell]

My hon. Friend is completely right, but I would use a slightly more optimistic tone. It is now the settled consensus of the entire defined-contribution industry that this is the direction we need to move in. Almost every single scheme is moving to thinking about how they will invest in a wider range of private assets. Many of them are looking to go further than the benchmark set out in the accord today. They want to do that because it is in their savers’ interests. It diversifies their assets and, over the longer term, leads to higher returns on average. The exact amount of those returns will obviously depend, but studies show that it ranges from 2% to 12% higher returns. It is absolutely in savers’ interests, and I think there is a broad consensus about doing that.

My hon. Friend is also right to say that we need to make sure that change happens. We will come forward in the pension schemes Bill with more details about how these developments will be monitored to make sure that change is delivered, because in the end, what the British people want to see is less talking about this and more actual investment.

[Richard Tice (Boston and Skegness) (Reform)]

Pension funds are, by definition, long-term capital and are therefore particularly well suited to being invested in long-term infrastructure. British pension funds investing in British infrastructure should be welcomed by us all, but I would caution against any specific mandating within sectors, which I fear may lead to lower performance. The thing about private markets is that they have almost no transparency in terms of valuation and liquidity. I urge the Government to encourage the pension funds voluntarily to be more open about how they value these private investments, to ensure greater confidence.

[Torsten Bell]

I thank the hon. Member for what I think is his support for the accord—

[Richard Tice]

indicated assent.

[Torsten Bell]

He is nodding, so I will take that as support. He will worry that he sounds dangerously like a Liberal Democrat when he sits on the fence as much as he just did. At least the shadow Chancellor has the guts to say he opposes it, because he thinks that that is simple politics to get him through the day. I am glad to see that the hon. Member has not learned enough, and I hope he enjoys the fence sitting while it lasts.

The hon. Member is right to say that schemes will want to be transparent about their asset allocation, partly so that savers can see what is going on, but also, to refer back to the question from my hon. Friend the Member for Buckingham and Bletchley (Callum Anderson), so that the country as a whole can see that progress is being made.