Pension Schemes Bill

Third Reading

My Lords, I have it in command from His Majesty the King to acquaint the House that His Majesty, having been informed of the purport of the Pension Schemes Bill, has consented to place his interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

Bill read a third time.

Clause 42: Certain schemes providing money purchase benefits: scale and asset allocation

Amendment 1

1: Clause 42, page 41, line 39, leave out “or [subsection removed]” Member’s explanatory statement This amendment removes a cross-reference to section 26(7B) of the Pensions Act 2008, left out by a report stage amendment in the name of Baroness Bowles of Berkhamsted.

My Lords, I did not expect to be back moving amendments quite so quickly, but despite the 20 consequential amendments that I moved on Report, four more have come to light. They are printed on the Marshalled List. They are entirely consequential on Amendment 52, which deleted mandation. All I seek to do with Amendments 1 to 3 and 8 is to move them formally when the time comes. I beg to move.

My Lords, I will say a word or two at this stage about government Amendment 4, because I understand it relates to Amendment 156, which the Minister moved on Monday. That Amendment 156 had wide Cross-Bench support, coming as it did after an amendment in the other place that was supported across parties and particularly by the Liberal Democrats. It gave the Government the responsibility and ability to issue statutory guidance on the fiduciary duty of trustees in relation to systemic issues, including climate change and many more.

In response to that, the Minister in the Commons said that the Government would bring forward plans to ensure that the guidance reflected the views of all within the sector and that it could be useful to trustees. All I have ever been interested in is bringing forward something that would help those involved with investment decisions for pensioners to be able to take into account with confidence the long-term systemic issues that they found. I am sure the Whip would not want me to repeat their arguments, which I am in danger of doing.

Following the vote on Amendment 156 on Monday, which I still do not understand, I am concerned about what the Government will now do. They are committed to this course of action and have taken a great deal of effort in setting up the technical working group and getting views from across the sector. It would be a real shame if that work were somehow to be halted by the procedural issues of how we get the legislative base to do this.

I should pay tribute here to the Minister and her officials, who moved at great pace and put a lot of effort into coming up with a solution that unfortunately was not accepted by the House on Monday. I would very much appreciate some understanding from the Minister, when she winds up, of how this issue will go forward. Because it was a government amendment, we do not have the opportunity of asking the Commons to think again; it is dead in this House. I would very much value an understanding that the need for this guidance has not gone away. As I understand it, the Government’s commitment to the guidance has not gone away, so it would be very interesting to know how we take the next steps.

My Lords, my Amendment 6 is entirely consequential on the amendment your Lordships agreed to. I am very grateful to the Public Bill Office for its advice in helping me to correct this, and I will move it formally when the moment comes.

My Lords, the amendments here are minor and technical following Report, and the Government will not oppose them today. Amendment 4 in my name is also minor and technical. This amendment was tabled to correct an error concerning Amendment 178, which was moved by mistake on Report on Monday 23 March. As the noble Baroness, Lady Hayman, said, that amendment relates to the commencement of Amendment 156 on investment duties guidance, which was disagreed by the House. The amendment now removes the commencement clause to honour the usual channels’ agreement on the package, as it was a missed consequential amendment.

In response to the questions from the noble Baroness, Lady Hayman—I commend her on her work on this important issue—the Government introduced their amendments to this House to honour the commitment given by my honourable friend the Minister for Pensions in the other place. Since the House disagreed with those amendments, obviously that cannot proceed. They were removed from the Bill in this House. Therefore, the other place will not get to consider them again. However, she is right that the need for guidance and clarity does not go away.

The Government remain committed to improving clarity around trustees’ existing investment duties, including how schemes consider long-term and financially material factors such as climate and systemic risks, while maintaining their core duty to act in members’ best interests. We will press ahead with this important work. We are currently reviewing next step options to ensure this objective continues to be progressed in the most important way in the light of the decision of the House on this matter.

The technical working group, which was discussed at some length in our proceedings, bringing together legal, actuarial and investment experts, will continue to play a central role in helping government develop high-quality guidance and ensuring it is workable, proportionate and valuable to schemes. Further updates will be provided in due course. I hope that gives enough information; it is all I am able to say at the moment. In the meantime, Amendment 4 is a necessary step, and I hope the House will support it.

Amendment 1 agreed.

Amendment 2

2: Clause 42, page 53, line 20, leave out subsections (16) and (17) Member’s explanatory statement This amendment is connected to another amendment in the name of Baroness Bowles of Berkhamsted to the commencement clause.

Amendment 2 agreed.

Clause 137: Commencement