debates/debates2025-12-03e conversation_20
Source: hansard.parliament.uk (2025-12-03)

UK Parliament Hansard data: debates/debates2025-12-03e conversation_20

Jayne Kirkham:Under this Labour Government, NHS waiting lists are coming down. I welcome the commitment to refurbish Truro Health Park in my constituency, one of the first new neighbourhood health centres in the country. Cornwall is already leading the way with new neighbourhood health teams, and upgrading Truro Health Park will help to deliver care for patients in their own communities. Will the Prime Minister confirm that this investment reflects decisions taken by this Government to prioritise community health care, and that services will not be removed before effective community replacements come online? \p Keir Starmer: I thank my hon. Friend for raising this, and I am delighted that her constituency will benefit from one of the 250 new centres. Neighbourhood health centres will provide simpler, more convenient access to a full range of health and care services on people’s doorsteps, and GP services will be protected before they come online. This is about early intervention, continuing to drive down NHS waiting lists and creating a more modern NHS that is fit for the future. \p Bernard Jenkin: Could the Prime Minister give his assessment of the latest news that President Putin has again turned down terms for peace in Ukraine? In an extraordinary outburst designed to destabilise our understanding of the truth, he did say that Russia is ready for war with NATO. How ready are we? \p Keir Starmer: I thank the hon. Gentleman for raising this; I updated the House last week on the attempts to get a lasting peace. We all know that Putin is the aggressor here. We all know that Putin is dragging his feet, not wanting to come to the table, not wanting to reach an agreement. We have to continue to put pressure on in every conceivable way—that is, in supporting Ukraine with capability and resource, but also ensuring that our sanctions, acting with allies, do as much damage to the economy in Russia as we can, and pressure that we can put on. We will continue to do so but the hon. Gentleman is absolutely right to raise this, and I thank him for doing so. \p Mel Stride: (Urgent Question): To ask the Chancellor of the Exchequer if she will make a statement on the resignation of the chair of the OBR. \p James Murray: Last week, the “Economic and fiscal outlook” was accessed prematurely ahead of the Budget. The Office for Budget Responsibility took full responsibility for this and conducted a review into what had happened. That report was published on Monday, and I came to this House to make a statement. The report found “systemic issues”, which led, in its words, to the

“worst failure in the 15-year history of the OBR.”

While I was making that statement on Monday afternoon, Richard Hughes, the chair of the OBR, resigned. The Chancellor has written to Mr Hughes to thank him for his many years of public service, and I have put my thanks on the record in this House, too. That decision was a matter for Mr Hughes.

We will work closely with the OBR to ensure that robust security arrangements are in place before the spring forecast and for all future forecasts. The permanent secretary to the Treasury will conduct a review of the Treasury’s security processes to inform future fiscal events. As I said when I was again at this Dispatch Box closing the Budget debate yesterday, the Government put the utmost weight on Budget security, including the prevention of leaks of information. A leak inquiry is now under way with the full support of the Chancellor and the whole Treasury team.

There is also speculation in the press today surrounding the letter that the OBR sent to the Treasury Committee last Friday, which I wish to address clearly. The Chancellor was aware of that letter and was content for it to be published, and she agreed that with the permanent secretary. \p Mel Stride: Richard Hughes was a respected chair of the OBR, and his departure is a matter of deep regret. The circumstances surrounding his resignation remain unclear—although for the Chancellor, it has clearly been a useful distraction from her own conduct.

On Friday, the OBR took the unprecedented step of publishing the details of the pre-measures forecast rounds, and members of the OBR board were clear to the Treasury Committee yesterday that that step was taken because of serious concerns about partial leaks and briefings about their forecasts. In relation to the market-moving briefings made on 14 November, which suggested that the public finances were, after all, in a better position, David Miles stated to the Committee:

“I think there had been a misconception that there had been some good news. It didn’t exist.”

The board members also clarified that those concerns were raised by Richard Hughes with the Treasury before the Budget, and that the information published on Friday was approved by the permanent secretary.

What discussions did the Treasury, including the Chancellor, have with Mr Hughes immediately prior to his resignation? Mr Hughes said last week that he served

“subject to the confidence of the Chancellor”.

Did the Chancellor give Mr Hughes her full confidence? Was any pressure put on Mr Hughes to resign? Did the Chancellor approve the OBR’s publication on Friday and discuss it with the permanent secretary? I believe that the Minister has confirmed that, but perhaps he might do so again. [Interruption.] \p Lindsay Hoyle: Order. Mr Strathern, are you here as a Parliamentary Private Secretary? \p Alistair Strathern: I am. \p Lindsay Hoyle: In which case, behave. \p Mel Stride: Do Ministers agree with the OBR’s opinion that leaks and briefings about the forecasts damaged growth? If so, what action was taken by the Treasury regarding those leaks? May I ask once again whether it was appropriate for the Chancellor herself to opine publicly on the OBR’s productivity forecast before the Budget, given that those matters should remain strictly confidential?

As you know, Mr Speaker, I have written to the Financial Conduct Authority seeking a full investigation into matters relating to the Chancellor’s statements on the state of the public finances. I have also written again this morning to the permanent secretary at the Treasury, requesting a full investigation into all these matters. \p James Murray: I thank the shadow Chancellor for his questions. As I made clear in my opening remarks, the decision for Richard Hughes to resign was a matter for Mr Hughes himself. I referred in my earlier remarks to the media reporting of the letter that the OBR published. The publication of that letter was agreed to by the Chancellor; it is completely untrue to suggest otherwise.

The reason for publishing the letter was the unique nature of the Budget and the context of the OBR’s productivity review, as it said itself, while acknowledging that that would not become usual practice owing to the importance of preserving a private space for discussions. We are completely committed to the OBR’s independence; it is a vital part of our fiscal framework. In fact, one of the first acts of this Parliament was to introduce a fiscal lock so that the OBR could never be sidelined.

The shadow Chancellor also referred to comments by Professor Miles at the Treasury Committee earlier this week. I note that, among his remarks, Professor Miles was very keen to be clear that the positive headroom number in the forecast of 31 October did not in any way suggest that the OBR assessment was that the fiscal outlook was problem-free. \p Meg Hillier: When I last spoke in this House, Richard Hughes was still chair of the OBR. I pay tribute to him. He was a tenacious champion for its independence. A highly intellectual man, he ably led that organisation and made an honourable decision to take responsibility for what happened last Wednesday.

The Minister says that a leak inquiry is under way in the Treasury; leak inquiries have a habit of not finding someone responsible. But if somebody is found responsible, will they follow the lead set by Richard Hughes? \p James Murray: I will not speculate on the outcome of the leak inquiry, but it is under way now, with the Chancellor’s support. The Government take our obligations to this House very seriously, and last week we produced a Budget that delivers on our priorities for the British people. \p Caroline Nokes: I call the Liberal Democrat spokesperson. \p Charlie Maynard: On behalf of my party, I thank Richard Hughes for his service. We respect his resignation. I also thank Laura Gardiner, Professor Ciaran Martin and Huw Stephens for the very quick turnaround of the investigatory report on the leak. In that report, the point is made that, unlike all other IT systems and services, the OBR’s website is locally managed and outside the gov.uk network. That decision was made, apparently, to ensure the OBR’s full independence from the Treasury. Will the Minister soon report back to the House with a timeline for decisions—between now and the OBR’s next report in spring 2026—on how these matters will be managed in future? Will he provide an outline of how the OBR website will be operated so that it is secure and maintains appropriate separation from the Treasury? \p James Murray: As I have made clear, the Treasury will be focused in the coming months on ensuring that we have stronger information security in the spring forecast and all future forecasts. It is worth my adding that the OBR has in recent years had significantly increased funding: since 2021-22, its budget has increased by 45%. As an independent organisation, it has full discretion in how it uses its budget. \p Yuan Yang: I join the Chair of the Treasury Committee in thanking Richard Hughes for his service, and commend him for taking responsibility for the security leak that happened on his watch.

In testimony given to the Treasury Committee yesterday, the OBR described the “£21 billion average absolute revision” to their pre-measures forecasts as meaning, in effect, that between every six-month forecast, £21 billion on average is wiped off or added to the headroom. That leads me to ask: how can we ensure long termism in the UK’s fiscal institutions, despite this overall focus on headroom? \p James Murray: The Chancellor set out at the Budget how important it is to increase our headroom. We have increased it to £21.7 billion, which is critical to reducing the cost of borrowing and protecting us against future shocks. The Chancellor also announced that the OBR’s spring forecast will not include an assessment of the Government’s performance against the fiscal rules, and the Government will not respond to it with fiscal policy; but the OBR will produce a forecast in spring, as expected. \p Edward Leigh: For what it is worth, I think the OBR has become too powerful. We live in a parliamentary democracy, not a quangocracy, and the Chancellor alone should be responsible. Does the Chief Secretary agree that in future all communications between the Chancellor and the OBR should be in deep  private? That is the only way the system will work. Never again do we want selective leaks. Can he promise that that will not happen in the next Budget? \p James Murray: The right hon. Gentleman and I disagree on the role of the OBR. As a Government, we are committed to the OBR’s independence and its vital role as a core part of our political framework. As I mentioned, one of our first acts in this Parliament was to introduce the fiscal lock to ensure that the OBR can never again be sidelined as it was by the previous Government. Regarding the private space between the OBR and the Treasury, the publication of the OBR’s letter, which as I mentioned was agreed to by the Chancellor, was due to the unique nature of this Budget in the context of the OBR’s productivity review. We acknowledged that that would not become a usual practice, due to the importance of preserving a private space for conversations. \p Luke Murphy: I echo fellow members of the Treasury Committee in commending Richard Hughes for his work and for taking responsibility for what the OBR itself acknowledged is the worst failure in its 15-year history. The shadow Chancellor failed to mention that Professor Miles stated in his testimony to the Committee yesterday that the Chancellor’s remarks on 4 November were entirely consistent with the forecast set out by the OBR at the time, in which the fiscal picture was not as rosy as the Opposition, bizarrely, now claim it was. Does my right hon. Friend agree? \p James Murray: My hon. Friend is absolutely right to point to some of Professor Miles’s comments yesterday. There has been a lot of discussion in this place about the £4.2 billion headroom identified in the forecast by the OBR on 31 October and what, in our view, that implied about the fiscal situation. Professor Miles said that the

“£4 billion in the pre-measures forecast is not inconsistent with the sentiment that this is a very challenging fiscal position.”

It is because of that fiscal position that we made the choices that we did. \p Harriett Baldwin: I welcome the fact that the Minister has just confirmed a leak inquiry is under way at the Treasury, and I will be paying close attention to that inquiry. Richard Hughes was an outstanding public servant, and he was truly independent. Will the Minister confirm that the person the Chancellor nominates to this position has to be endorsed by the Treasury Committee? Will he commit to someone of equal independence and stature being nominated to this position? \p James Murray: As the hon. Lady will know, the process is now under way for an external recruitment of a new chair of the OBR. The normal process will be followed in terms of the Chancellor making the appointment and the Treasury Committee being involved. The hon. Lady mentions that I have confirmed the leak inquiry today; I have confirmed it again today, but I mentioned it in my remarks to the House yesterday. \p Clive Efford: Over my years here, I have seen many Budgets. Members on the Government Benches wave their Order Papers on the day, then watch as the Budget unravels over the next  48 hours, but we do not seem to have had any of that with this Budget. It has been extraordinarily tight in what it seeks to achieve—[Interruption.] The Tories are protesting on the Opposition Benches about the individuals involved, rather than the content of the Budget itself, because they have very little argument to make. \p James Murray: My hon. Friend is absolutely right to draw attention to that. While the process around the Budget is important, what this Budget means for people across Britain is that we have cut the cost of living, continue to cut NHS waiting lists, and cut Government borrowing. \p Dave Doogan: The head of the OBR has taken responsibility and resigned, just like the BBC director general took responsibility for a crisis and resigned. Given the backdrop that the UK is in the throes of a full-on fiscal crisis of the Chancellor’s own making—both materially by removing £66 billion from the economy with no corresponding stimulus and objectively by briefings, counter-briefings, screeching U-turns, leaks, and a profound lack of discretion over market-sensitive information—why will she not resign? \p James Murray: The Chancellor has delivered a Budget that takes the challenges of this country head on, cuts the cost of living, continues to cut NHS waiting lists, cuts Government borrowing, and meets the priorities of the British people. \p Rachel Blake: The OBR’s investigation has two particularly striking findings: the first was the number of attempts to access the documents in question; and the second was the lack of security for those documents. What specific actions does the Minister believe the OBR should take to overcome those things at future fiscal events? Does he agree it is possible to have confidence in the principle of an independent OBR alongside undertaking meaningful and significant scrutiny of some of the organisation’s actions? \p James Murray: I very much agree with the sentiment of my hon. Friend’s question. The OBR is a vital part of our fiscal framework—indeed, as I mentioned earlier, one of the first acts we took on entering government was to strengthen its role to ensure that it could never be sidelined. It is precisely because we see the OBR as holding such an important place in our fiscal framework that it is important that we maintain its integrity and trust.

My hon. Friend asks what further steps the OBR will take. We will work with the National Cyber Security Centre and the OBR to take forward the recommendation that a forensic examination of potential premature access at previous fiscal events is carried out. Let me add that there is no evidence of hostile cyber-activity, but the OBR report’s findings indicated access at previous fiscal events. That is a very serious matter that we will investigate. \p John Glen: Richard Hughes was a first-rate public servant, but he did the right thing on the narrow matter of the premature upload of the file last week. OBR representatives told us a number of things yesterday in the Treasury Committee. They told  us that there was a £16 billion downgrade and £4.2 billion of headroom on 31 October, because there were also improved tax revenues. I do not think £4.2 billion can be characterised as a black hole, but it was a challenging circumstance—that is the truth. Will the Minister consider, in all future Budgets, that such a letter should be made available, at the same time that Budget publications and OBR publications are made available, setting out what was said to the Chancellor at what point? We could then verify whether the press conference on 4 November was very wide of the mark and gave a materially misleading view of what was actually happening. \p James Murray: As will be clear, I agree with the right hon. Gentleman’s remarks about Richard Hughes’s contribution to public service. However, I disagree that the premature publication of the forecast last Wednesday was a narrow matter. The report showed that it was about not simply a single error, but more systemic issues, which it highlighted, so I disagree with the characterisation of that as narrow.

The right hon. Gentleman referred to some of Professor Miles’s comments at the Treasury Committee. Professor Miles confirmed that the £4 billion headroom identified in the forecast on 31 October was not inconsistent with the sentiment that this is a very challenging fiscal position.

The right hon. Gentleman also asked about the OBR’s letter, the nature of its being published and what it speaks about for the future. As I said earlier, the publication of the OBR letter was agreed to by the Chancellor due to the unique nature of this Budget and the context of the OBR’s productivity review, as it said itself, while acknowledging that it would not become usual practice, due to the importance of preserving a private space for discussion. \p Perran Moon: The OBR leak was deeply disturbing, particularly in the light of international sensitivities. Can the Chief Secretary rule out foreign actors exploiting the OBR’s inadequate security at any point? \p James Murray: The OBR’s report into the premature publication of its forecast found no evidence of hostile cyber-activity, but it looked at the spring forecast and identified what happened there. Concerningly, it identified that there had also been premature access to the forecast at that fiscal event. The report did not look further back at, for instance, the Chancellor’s first Budget last year or Budgets delivered by Conservative Chancellors under the previous Government. That is why it is so important that the Government take forward the report’s recommendation to conduct a forensic examination of potential premature access at previous fiscal events. \p Julian Lewis: The Government seem to be keen to maximise the gravity of the OBR’s accidental leak while minimising the gravity of the Chancellor’s deliberate leaks. The Minister has twice frankly admitted not being aware of the case of Labour Chancellor Hugh Dalton, who resigned for inadvertently leaking to a journalist a single sentence of his 1947 Budget moments before it was due to be announced. Now that he has understood what actually happened then and that that was the paradigm case, does he think it holds any lessons or examples of conduct that the Chancellor ought to consider following? \p James Murray: I came here this morning expecting to be critiqued by the Opposition for their view of Government policy; I did not expect a critique of my knowledge of history, but that appears to be the route that the right hon. Gentleman wants to take. When I gave way to the right hon. Member for Gainsborough (Sir Edward Leigh) yesterday, my right hon. Friend the Health Secretary said I was being too generous, and I am inclined to agree with him.

On the broader point just made by the right hon. Member for New Forest East (Sir Julian Lewis), I think we need to be really careful about downplaying the seriousness of the OBR publishing its forecast early. It is not a “narrow matter”, as the right hon. Member for Salisbury (John Glen) said; we cannot simply brush it away. This is a serious leak of highly sensitive information, and we take it very seriously as a Government. \p Andrew Lewin: Three years ago, the role of the OBR came into sharp focus after the delivery of another Budget, which became known as the mini-Budget, by which the markets were sent spiralling and the Bank of England was forced to take emergency action. Does my right hon. Friend agree that, while the events of this last week have been serious, we have taken action within a week? Three years on, we are still living with the consequences of the decisions taken by the Conservatives. \p James Murray: My hon. Friend is absolutely right that people across Britain are still living with the consequences of what the previous Government did in that mini-Budget, when they sidelined the OBR. In fact, one of the reasons we are so keen to protect and strengthen the OBR’s integrity is the vital role it plays in our fiscal framework. The very first Bill passed by this Government included the fiscal lock, which now prevents the OBR from being sidelined. \p Joshua Reynolds: The Chancellor announced in the Budget that she would legislate for only one assessment of the fiscal rules every year, instead of two, which is the case at the moment. In the light of the change in the OBR’s leadership, will the Minister commit today to seeking the views of the incoming chair of the OBR about the economic and fiscal impact of that decision before the Government plough ahead with it? \p James Murray: I want to be clear about what the OBR is required to do and what the Chancellor announced last week in the Budget. The OBR is required to produce two forecasts a year, and the Chancellor will commission a second forecast in due course. As she announced in the Budget, however, that forecast will not include an assessment of the Government’s performance against the fiscal rules, and the Government will not respond with fiscal policy. \p Christopher Vince: Was the Minister as surprised as I was to find out that such a sensitive document was being managed by something that was using WordPress? What reassurances can he give my constituents—what reassurances has he had from the OBR—that, moving forward, these sorts of documents will be password protected and, crucially, protected from foreign interference? \p James Murray: I will admit that I was surprised to read the OBR’s report, which made it clear that any assumptions we might have had that this was a simple error were not true—more systemic issues were revealed in the report. As I understand it, there was functionality within the OBR’s IT and website systems to have greater security, but they were not configured correctly to provide that security. For me, that underscores the fact that this is not one inadvertent error by one official; it is a systemic issue with the information security, which is so important. \p Simon Hoare: Although I remain convinced that there are ways of delivering the guardrails that the Treasury needs without the OBR, I know that the Chief Secretary and the Chancellor are not persuaded of that argument. However, might the Chief Secretary be persuaded that the resignation of the chair of the OBR and the recruitment process that is now under way presents an opportunity for the Treasury and the permanent secretary to reflect on what they need the OBR to be doing for the next five, 10, 15 or 20 years? What skills does the OBR need, what shape does it need to be, and what does it actually need to do to get the economy right? Will they be availing themselves of this opportunity to recast the OBR and reflect on its roles and responsibilities? \p James Murray: I thank the hon. Gentleman for his question—I am glad that, not having had time to take his intervention yesterday, we are now back to business as usual with frequent exchanges across the Chamber. We probably disagree about the OBR’s role, but I hope he recognises the benefit of one of the changes to what the OBR will do that the Chancellor announced in last week’s Budget. As I said to the hon. Member for Maidenhead (Mr Reynolds) a few moments ago, although the OBR is required to produce two forecasts a year, the Chancellor has announced that the spring forecast will not include an assessment against the fiscal rules, and the Government will not respond with fiscal policy. \p Scott Arthur: I find it rather curious that Conservative Members have a lot to say about Hugh Dalton’s Budget in 1947, but so little to say about Liz Truss’s Budget in 2022. \p Perran Moon: Selective amnesia. \p Scott Arthur: Exactly. It is very curious.

All the staff in my office diligently followed Mr Speaker’s advice on cyber-security and the threat of foreign intervention in our IT, and it is right that we take these matters seriously. However, based on the reports we have seen, I am not convinced that the OBR had taken the same kinds of steps to protect its own systems. Were the OBR and other Government Departments and agencies offered this advice but just did not follow it, or has there been an oversight in how we are managing security right across Government? \p James Murray: My hon. Friend is right to point out that while Conservative Members are keen to raise points of history, they seem to be rewriting history when it comes to their last few years in office. He asks an important question about cyber-security. The Government will work with the National Cyber Security Centre and the OBR to take forward the OBR report’s  recommendation that a forensic examination of potential premature access at previous fiscal events be carried out. For the avoidance of doubt, I should reiterate that the report found no evidence of hostile cyber-activity, but my hon. Friend is right to point out that information security and cyber-security are important for all of us across Government. Indeed, that was reflected in the spending review. \p Ashley Fox: For the first time in its history, the OBR was forced to correct the record about the forecasting process in the run-up to the Budget. Is not the reason that the Chancellor selectively leaked information from the OBR to mislead the public and justify tax rises? \p Caroline Nokes: Order. I am sure that the hon. Gentleman does not want to suggest that the Chancellor in any way misled anyone. \p Ashley Fox: I am grateful for your advice, Madam Deputy Speaker. Perhaps I can rephrase that: the Chancellor inadvertently misled the public to justify those tax rises. \p James Murray: The OBR set out in black and white that the productivity downgrade reduced tax receipts by £16 billion, and identified the cause of that downgrade as the previous Government’s record in office, whether their slashing of public investment or their mishandling of Brexit. In her speech on 4 November, the Chancellor was clear that this productivity downgrade, combined with the clear need to increase headroom to build resilience in the public finances, would require everyone to make a contribution. That is what happened at the Budget. \p Tom Hayes: It is a pleasure to see you in the Chair, Madam Deputy Speaker. I was disappointed, as were my constituents, by the botched and premature release of the Budget on the OBR website, and I welcome the news that the OBR is welcoming in  an expert in cyber-security. I sincerely hope that it is not the Leader of the Opposition—who, as we know, has form with accessing websites improperly. After all, the Conservatives really could not do without her.

My question is about the cyber-security expert reporting back. When do the Government expect to hear back, and can we be assured that, in the interim, the OBR has got its security systems into the shape they need to be in? \p James Murray: The Government take this matter very seriously indeed and will move urgently to take forward that recommendation of the report, working with the National Cyber Security Centre. Cyber-security is an important matter for the OBR, and indeed for all Government Departments and bodies all year round, but the forecast is especially market sensitive, so it is particularly important to ensure that it is not published prematurely. That is why we take so seriously what happened last week, what seems to have happened in the spring, and what may even have happened at previous fiscal events. \p Jim Shannon: The OBR’s assessments have an incredible impact on households and businesses in Northern Ireland, and indeed across the whole United Kingdom. Can the Minister please outline what steps will be taken to ensure full transparency around this resignation and to safeguard trust in the OBR’s future work, so that public confidence in our economy is in no way undermined? \p James Murray: The hon. Gentleman is absolutely right to point out the importance of trust, and not just in the economy but in the public finances. In the Government’s view, the OBR’s role is a critical part of that trust. It is because of that role that the OBR plays in our robust and transparent fiscal framework that we take the premature release of this information so seriously and are following up the matters it raises so urgently. \p Matt Western: (Urgent Question): To ask the Chancellor of the Duchy of Lancaster if he will make a statement on espionage cases and the Official Secrets Act. \p Dan Jarvis: I thank my hon. Friend for securing this urgent question, following the deeply disappointing collapse of the prosecution case concerning two individuals charged under the Official Secrets Act 1911. The allegations were hugely concerning, and we recognise and share the public and parliamentary frustration about this outcome. The Government welcomed the Joint Committee on the National Security Strategy’s inquiry and the opportunity it provided for parliamentary scrutiny on this important matter, alongside the ongoing review led by the Intelligence and Security Committee.

I will take this opportunity to thank the Joint Committee on the National Security Strategy, under my hon. Friend’s chairship, for its diligent and rapid work. The Government will now take the time to consider the Committee’s conclusions and recommendations properly, in conjunction with partners referenced in the report, before responding within the two-month timeframe.

However, I am glad that the JCNSS’s report has reinforced two fundamental points that the Government have made throughout. First, and as the Government have been saying for several weeks, the report makes it clear that there was no evidence of attempts by any Minister, special adviser or senior official to interfere with the prosecution. The report states that it found no evidence of improper influence. Despite ongoing questions about a meeting of senior officials that took place on 1 September, chaired by the National Security Adviser, the report clarifies that there was no deliberate effort to obstruct the prosecution.

The first senior Treasury counsel had already made the judgment on the basis of the evidence that charges could not progress by 22 August, more than a week before the meeting took place. We have been consistent throughout on these points, which runs in sharp contrast to our critics, who initially criticised the Government for intervening in the case and then, when it became clear that that was nonsense, criticised us for not intervening in the case.

Secondly, the JCNSS report reinforces a fundamental point that I have made to this House previously: the root cause of the failure of this case was the outdated Official Secrets Act 1911, which predates the first world war. The 1911 Act created an unrealistic test by requiring the prosecution to prove that China was an enemy. The Law Commission had flagged the term “enemy” as being deeply problematic as far back as 2017. The Government will continue to work tirelessly to ensure that we have the most effective structures and processes in place to support law enforcement partners in mitigating and prosecuting foreign espionage wherever we find it.

More importantly, the ongoing disinformation around the collapse of this case has been distracting from the most important issue that we should be focused on: how the Government can work across this House to ensure  that Chinese espionage will never be successful in the United Kingdom. As the Prime Minister stated in his speech at the Lady Mayor’s banquet on Monday:

“Protecting national security is our first duty and we will never waver from our efforts to keep the British people safe.”

That is why, on 18 November, I set out a significant number of measures that this Government are taking to counter the threat that China and other state actors pose to UK democracy and society. In line with the JCNSS report, the Government will continue to strengthen our processes and preparedness for future threats, ensuring that we leverage our new security legislation effectively— \p Caroline Nokes: Order. The Minister will know that he should have restricted himself to three minutes for his response. That appears to have been four and a quarter minutes. \p Matt Western: I thank the Minister for his comments, and I thank Mr Speaker for granting this urgent question demonstrating the importance of parliamentary security, safety and sovereignty. The case of alleged spying on behalf of China caused widespread concern among the public and Members of both Houses. My Committee, which is comprised of senior Members of both Houses, examined the timeline, and actions and decisions of the Government and the Crown Prosecution Service. While this was a highly unusual inquiry for a Committee to conduct, it was essential that Parliament examined the processes that led to the collapse of the case.

Our inquiry found nothing to suggest a co-ordinated, high-level effort to collapse the prosecution, nor deliberate efforts to obstruct or circumvent constitutional safeguards. However, we did find a process that is beset by confusion and misaligned expectations, and that can, at points, be best described as shambolic. There were systemic failures, and deficiencies in communication, co-ordination and decision making between the Crown Prosecution Service and the Government. Indeed, the episode reflects poorly on the otherwise commendable efforts of public servants to keep our country safe.

Given the conclusions I have just set out, will the Minister give reassurances that the Government will work closely with the CPS to ensure that communications and processes are tightened up, particularly when dealing with cases involving national security? Does the Minister acknowledge that the new National Security Act 2023, while comprehensive, may not entirely cover low-level espionage activity, especially given its structural parallels with the previous legislation? Finally, does the Minister agree that greater support should be given to the deputy National Security Adviser and civil servants acting as witnesses in such cases, to ensure top-level grip on cases with significant public exposure? \p Dan Jarvis: As Mr Speaker has rightly acknowledged, these issues require a great deal of scrutiny from Parliament, and the Government are grateful for the opportunity to engage and work closely with Parliament on these matters, not least because they merit careful consideration, alongside decisive action by Ministers and senior officials. The Joint Committee on the National Security Strategy, led by my hon. Friend the Member for Warwick and Leamington (Matt Western), plays a vital role in providing that appropriate scrutiny. I say that not just as a Government Minister, but as a former member of his Committee.  The same principle applies to the ISC, which does important work. I take this opportunity to thank the Chair and the whole Joint Committee for undertaking this work and publishing a comprehensive report as quickly as they have.

My hon. Friend the Chair highlights some important aspects of the report’s conclusions, recommendations and findings, following the work that the Committee undertook. As I have said, the Government approach this issue, and will consider the Committee’s report, with the utmost seriousness. I can give him the assurance that he seeks that the Government are now carefully considering the findings of the report. I give him and the House an absolute assurance that we will respond within the agreed timeframe. He mentioned a couple of other points that I will respond to briefly now, although I am happy to engage with him in more detail, should he think that necessary.

My hon. Friend mentioned the role of the CPS. He will understand that as a Government Minister, I am incredibly limited in what I can say about the CPS, because it is operationally independent of Government. He makes a fair challenge, and we will look carefully at the report’s findings in this area. He also mentioned the National Security Act 2023. While I am not in any way complacent about that legislation, we are in a much stronger position than we were. We keep these matters under review, and along with colleagues across Government, we are constantly seeking to assure ourselves that the legislative framework is fit for purpose and appropriate. I give him an absolute assurance that we take that incredibly seriously.

Finally, my hon. Friend mentioned the deputy National Security Adviser. Let me take the opportunity again to pay tribute to him for the important work that he does. He is a dedicated public servant, and his contribution to our national security is immense. The Government are grateful for his service, as I am sure is the whole House. I will look carefully at the points that my hon. Friend has made, and we will ensure that they are properly reflected in the response he receives from the Government. \p Caroline Nokes: I call the shadow Chancellor of the Duchy of Lancaster. \p Alex Burghart: I thank the Joint Committee for its work. Its report is a damning indictment of the Government’s handling of the China spy case. The investigation not only found

“serious systemic failures and deficiencies”,

but calls the Government’s handling of the matter “shambolic”, as the hon. Member for Warwick and Leamington (Matt Western) just said. It also found—surprise, surprise—that there was enough evidence to prosecute the alleged spies. The Committee writes that

“China posed a range of threats to the United Kingdom’s national security. In our view, it is plain that, taken together, these amounted to a more general active threat to the United Kingdom’s national security.”

The Labour party tried to blame the last Government for the collapse of the case, but this investigation has exposed the fact that that is plainly untrue. I was surprised to hear the Security Minister refer to the deficiencies of the 1911 Act. I draw his attention to paragraph 40 of the report; I think he probably should have read it before he came to the House. It was this  Government’s incompetence that ultimately led to these two men not standing trial, and, most worryingly, the report reminds us that there may be many more such cases. Indeed, why should there not be, if foreign spies believe that they can act against this House with impunity and effective immunity?

It is obvious that this Government are not prepared to stand firm. Over the past few days we have heard from the press—not from reports to the House—that the Prime Minister is about to sign off the Chinese mega-embassy in London, despite major security concerns, and that he is preparing to travel to Beijing. Will he, I wonder, have the backbone to stand up for our interests while he is there?

I will ask the Security Minister three very simple and straightforward questions. First, did the Government provide the Joint Committee with the minutes of the 1 September meeting chaired by the National Security Adviser, and if not, why not? Secondly, during the many debates that we have had in the House on this matter, a number of Ministers appear to have made inaccurate and misleading statements on at least six occasions. Will the Minister ensure that corrections are made to Hansard, so that the record is straight? Thirdly, the Joint Committee has concluded, from the evidence it received, that China is a general threat to the United Kingdom’s national security; do the Government agree, and if they do, how can they justify supporting the mega-embassy? \p Caroline Nokes: Order. Before I call the Minister, may I make the point to those on both Front Benches that the Minister responding to an urgent question has three minutes? The Opposition Front Bencher, the hon. Member for Brentwood and Ongar (Alex Burghart), should have taken two minutes, and I should advise the Liberal Democrat spokesperson that she has one minute. I commend the hon. Member for Warwick and Leamington (Matt Western) for managing to stay well within his two minutes. I call the Minister. \p Dan Jarvis: A few moments ago, I spoke of the careful consideration and appropriate scrutiny that this matter deserves. Many Members of both Houses and Members of all parties on the Joint Committee have adopted that view, but I have to say that I am disappointed that the hon. Member for Brentwood and Ongar (Alex Burghart) continues to choose a different approach. He did not seem to want to mention that much of the report refers to the time when his party was in government. Some might have hoped that he would use his contribution today to show a bit of humility, both to the House and to those in our national security community, not least given some of the low-brow political point scoring and baseless accusations that we have heard over the past few weeks.

In the aftermath of the trial’s collapse, some Opposition Members accused Ministers, special advisers and civil servants of improper interference. This report makes it clear that that was baseless and untrue. There were some who suggested that some of our most experienced and most dedicated national security experts set out to deliberately withhold information from prosecutors in order to placate the Chinese Government. This report makes it clear that that was baseless and untrue. There were some who suggested that the Conservatives’ failure to update critical national security legislation was immaterial  to the case that was being brought to trial. This report makes it clear that the root cause of the collapse was the years of dither and delay that left outdated, ineffective legislation on the statute book long after we knew that it did not protect our country from the modern threats that we face. Some Opposition Members—although not all of them—were all over the place on that legislation, and were all over the place with regard to China, and some of them, sadly, still are.

On China, as the Prime Minister observed this week,

“We had the golden age of relations under David Cameron and George Osborne, which then flipped to an ice age, that some still advocate”,

but no matter how much Opposition Members may wish it to be so, not engaging with China is no option at all. We have made it clear that we will co-operate where we can, but we will always challenge where we must. When we say that national security is the first priority of this Government, we mean it, and since the trial’s collapse, I have announced a comprehensive package that will help us to tackle the economic, academic, cyber and espionage threats that China presents. The report to which the hon. Member has referred provides further useful thought on how we can best safeguard our national security, and the Government genuinely welcome that constructive feedback. I look forward to engaging with the Committee, and with responsible Members in all parts of the House, as we continue to consider how best to go on protecting our democracy and our nation.

The hon. Member asked me about the minutes—[Interruption.] He is still asking me about the 1 September meeting. \p Alex Burghart: You never answered. \p Dan Jarvis: I am going to give the hon. Member the answer. The minutes were provided by the Government to the Intelligence and Security Committee, so there is his answer. He also referred, on several occasions, to the application for the Chinese embassy. Let me explain to him, for the sake of absolute crystal clarity, what the position is with regard to the embassy. I think that will be helpful to other Members as well.

As Members will know, an independent planning decision will be made by the Secretary of State for Housing, Communities and Local Government by 20 January. National security is the first duty of government, and it has been our core priority throughout this process. The Home Office and the Foreign Office provided views on the security implications of this build throughout the process, and we have been clear about the fact that a decision should not have been taken until we had confirmed that those considerations had been resolved. The letter recently sent to the Ministry for Housing, Communities and Local Government now confirms that all national security issues raised have been addressed. Should the planning decision be approved, the new embassy will replace the seven different sites that currently comprise China’s diplomatic estate in London. \p Derek Twigg: I think that many of us are still somewhat bemused by the fact that somehow, despite the three witness statements, the Crown Prosecution Service thought that it could not go  ahead with a prosecution. I welcome much of what my hon. Friend the Minister has said, but I think it would be useful, following the questions asked and the points made by my hon. Friend the Member for Warwick and Leamington (Matt Western), if he agreed to come back to the Committee after the Government has responded to its report and recommendations, so that we can be given a clear timeline for the changes that rightly need to be made. \p Dan Jarvis: My hon. Friend will understand that there is nothing more I can add with regard to his point about the Crown Prosecution Service. As for his substantive point about engagement with Committees of this House, let me give him that assurance. I genuinely welcome the constructive scrutiny carried out both by the Committee of which he is a member and the Committee chaired by my hon. Friend the Member for Warwick and Leamington. I think that they provide a huge amount of value, and I can give my hon. Friend the Member for Widnes and Halewood (Derek Twigg) an absolute assurance of our continued desire to co-operate closely with them. \p Caroline Nokes: I call the Liberal Democrat spokesperson. \p Lisa Smart: The seriousness of the threat that Beijing poses to our national security cannot be overstated. Any attempt by China to interfere in our democracy must be rooted out, and the Government should implement the recommendations of the Committee’s report as a matter of urgency. The work that the National Security Adviser and his deputy are doing is vital to keeping our country safe, but the report is damning, and it describes aspects of the situation as “shambolic”. The Minister has previously mentioned his plans for new powers to counter foreign interference, and I would be grateful if he could provide a timeline for their introduction.

Let me once again urge the Minister to place China on the enhanced tier of the foreign influence registration scheme. If he will not do that today, I wonder whether he might give us a date in the diary—say, a week before the Prime Minister’s visit to Beijing; that may well coincide with the date of an announcement on the planning permission for the mega-embassy—and give the House the clarity that it deserves. \p Dan Jarvis: I am grateful to the hon. Lady for her serious attention to these matters. I hope she will acknowledge that it was only a couple of weeks ago that I presented the House with a significant package of measures designed specifically to counter the threats that we have debating for a number of months, and I hope she will also acknowledge that it was indeed a significant package of measures, but of course we keep these matters under very close review, and I am certain that the Government will want to introduce further measures in due course.

The hon. Lady raises the issue of FIRS. As I have said to the House previously, there were Opposition Members who did not think that we would introduce FIRS on time, but we did so. It is a valuable tool and adds significant value to our capabilities with regard to our national security, but at the same time we have to very carefully deliberate the addition of more countries  to the enhanced tier. We keep that under very close review, and I would be very happy to discuss the matter with her further. \p Andrew Slaughter: The Joint Committee, of which I am a member, approached this issue in a non-partisan way, and I agree with the Minister that it is a pity that the Conservatives have not taken the same approach, particularly as it started on their watch. The strong impression that I form from the inquiry is that everyone thought they were doing the right thing, but in reality they were tip-toeing around the issues and staying in their own silos. Whether the Minister agrees with that analysis or not, can he tell us what organisational lessons he has learned that will prevent any repetition of, in his own words, this “deeply disappointing” outcome? \p Dan Jarvis: I am grateful to my hon. Friend for his work on the Joint Committee, and I completely agree with the premise of his point: the Committee considered these matters in a non-partisan way. That is precisely the right approach. It is the approach that I will always seek to undertake, and I know that the majority of Members of this House will proceed in the same way.

My hon. Friend raises an entirely fair and reasonable challenge about the organisational lessons that have been learned as a consequence of this process. All Ministers, whether in this Government or in the previous Government, should have approached these kinds of reports with a degree of humility. Undoubtedly, there are lessons that will need to be identified, learned and implemented as a consequence of recent events. As I know he and the House would expect, the Government need to do that in a measured and considered way. I give him and the Joint Committee an absolute assurance that we will look at the detail of the report very closely indeed, and we will respond within the timeframe that the Committee has set us. \p Julian Lewis: Having previously read out in this Chamber the relevant section of the Official Secrets Act 1911, I am pleased that the report concludes that the decision not to prosecute under the terms of that Act flies in the face of common sense. What also flies in the face of common sense is the Government’s previous position that China poses a range of serious threats but does not constitute a threat itself. Is that still the Government’s position? \p Dan Jarvis: The right hon. Gentleman knows that I always listen assiduously to what he has to say, given the experience that he brings to this House. I am certain that he will have looked very carefully at what the Prime Minister said in his Mansion House speech on Monday evening, but on the off-chance that he has not yet had the opportunity to do so, let me tell him and the House the essence of what the Prime Minister said with regard to China, because he very clearly set out the Government’s approach. He said that China

“poses real national security threats to the United Kingdom”,

but that it is

“time for a serious approach, to reject the simplistic binary choice. Neither golden age, nor ice age…So our response will not be driven by fear, nor softened by illusion. It will be grounded in strength, clarity and sober realism.”

I agree with the Prime Minister, and I suspect that most sensible Members of this House do as well. \p Meg Hillier: I commend my hon. Friend the Member for Warwick and Leamington (Matt Western) for steering the report through his Joint Committee swiftly and sensitively, and for managing sensitive data. It is a great example of how the Committee corridor can really contribute to transparency for the public, and I look forward to the Government’s response. However, there are sensitive matters that are not covered by the existing scrutiny Committees of this House. I hope that the Minister will, on the basis of this example, be an advocate in Government for the establishment of a new Committee that can cover matters that do not currently have oversight because of their sensitivity. \p Dan Jarvis: I completely agree with my hon. Friend’s assessment of the work of the Joint Committee. She is right to say it is a great example of the work of a Select Committee that has constructively contributed a very significant amount of useful information that the Government will now consider in great detail.

My hon. Friend’s second point is about the creation of another Select Committee, and she will understand that that is above my pay grade. I gently point to the fact that the Government want to have a very good, close and constructive relationship with the ISC. It will be for the ISC to take a view, but that may provide a forum for further parliamentary scrutiny of those matters. \p Mark Pritchard: Although I have huge respect for the Security Minister and, indeed, for the hon. Member for Warwick and Leamington (Matt Western) and the Joint Committee on the National Security Strategy Committee—I sat on that Committee for five years—is it not the case that this statement actually raises more questions? It is not case closed, as there are questions that are still outstanding. That is because the weakness here is that the Joint Committee does not have access to classified material; only the Intelligence and Security Committee does. Having sat on both Committees, I know there is a stark contrast between the types of witnesses who can be called and what the witnesses can actually say. Given the earlier question, will the Minister now commit to review the memorandum of understanding with the Intelligence and Security Committee to ensure that the right questions can be asked of the right Committee at the right time, so that we can have some definitive conclusions on this whole saga? \p Dan Jarvis: I am grateful to the right hon. Gentleman for the experience that he brings to this House, not least because he has sat on both the Committees to which we have been referring. I slightly take issue with his assessment of what the report does, because the Government are very clear that it emphasises the key arguments that we have been bringing forward over the last couple of weeks.

On the right hon. Gentleman’s second point, he has raised the MOU previously. It is an entirely reasonable point for him to raise, both publicly and privately. Let me take it away and come back to him. \p Tulip Siddiq: The Security Minister knows very well the case of my constituent, Nazanin Zaghari-Ratcliffe, who is accused of espionage by the Iranian state. In case he needs a  reminder, her horrifying ordeal is being dramatised on BBC iPlayer at the moment. The one thing that Nazanin has said to me constantly is that a hostage envoy would have really helped when dealing with her situation. I know this is about dealing with espionage cases from the other side, but for the sake of national security, has the Minister considered having a hostage envoy, as the Ratcliffe family keep raising with me? \p Dan Jarvis: I am grateful to my hon. Friend for the contribution that she has made and for the work that she has done previously. I am joined on the Treasury Bench by the Under-Secretary of State for Foreign, Commonwealth and Development Affairs, my hon. Friend the Member for Lincoln (Mr Falconer), who listened very carefully to her comments, and has indicated that he would be very happy to discuss them further with her. \p Stephen Gethins: May I thank the Minister for his responses today and for the way he is responding to this matter? I know he will be as concerned as the rest of us about descriptions of the process being “shambolic” and the criticism of systemic failures. Can the Minister tell us what has changed? Secondly, what has changed over the past almost four years? Russia’s invasion of Ukraine changed the world profoundly, and China continues to provide assistance to Russia. \p Dan Jarvis: That is an entirely fair and reasonable question, and I can give the hon. Gentleman a very straight response. One of the things that has changed is that the Prime Minister—rightly, in my view—conducted a machinery-of-government change in September, which means that, as the Security Minister, I now sit not just in the Home Office, as was the case previously, but in the Cabinet Office. The purpose of that machinery-of-government change is to ensure that we can more effectively co-ordinate national security policy and activity across Government. It is relatively early days, but my analysis today is that that was the right move to make; I think it will enable the Government to make better, more informed and timely decisions in this area. At the same time, I approach these things with a degree of humility. We will look very carefully at the findings of the report and make sure that we consider them. We will look at what changes are necessary, and respond to the Joint Committee and to the House in due course. \p Scott Arthur: I thank the Minister for his responses. Throughout this affair, he has remained calm and consistent in answering points that—let’s be honest—have at times been smears from the Conservatives. I think the report from the Joint Committee has found them out, and that is why their Benches are empty today. Rather than hiding, the Conservatives should be here apologising.

Does the Minister welcome the fact that the report makes it clear that the root cause of the case collapsing was the dither and delay from the previous Government? Does he agree with the Prime Minister that that was nothing short of a dereliction of duty when it comes to our national security? \p Dan Jarvis: I am grateful to my hon. Friend for his contribution today and on many previous occasions. The essence of his point is absolutely right. I do regret the tone of some of these debates in recent weeks; some of it has been entirely unnecessary, when we should have been coming together as a House to look at what we can do to ensure that the activity that we allegedly saw here is not able to happen again. That has always been my approach throughout, and it will continue to be my approach as we move forward.

The point my hon. Friend made about the recommendations in the report are absolutely right, and I think it vindicates the basic argument that the Government have sought to bring forward. I say that with humility, because we will want to look carefully at the detail of all the findings and all the recommendations. We will do that over the next number of weeks, and we will take on board lessons where they need to be learned. \p James Wild: The report says that the National Security Adviser, Jonathan Powell, apparently had very “limited” engagement about the case. In contrast, one of his predecessors, Sir Stephen Lovegrove, with whom I worked in the Ministry of Defence, said he

“would have expected to be involved intimately in the provision of the Government evidence”.

Why was Jonathan Powell—and Lord Hermer, for that matter, who is described in the report as being “not proactive”—so passive on a matter of national security and alleged spying on Members of this House? \p Dan Jarvis: I honestly do not believe that that is a fair and reasonable characterisation of the role played by the National Security Adviser. The National Security Adviser is an extremely experienced and dedicated public servant, who is dedicating his life to keeping our country safe. The hon. Member, because he is a very well-informed and assured Member of this House, will understand that specific restrictions were placed on the deputy National Security Adviser about what he could do and what he could say. Both the deputy National Security Adviser and the National Security Adviser acted with integrity throughout this process, and I know that the House will be grateful to them for it. \p James Naish: In the light of the important issues being discussed today about the concerning activities of China in the UK, can I ask the Minister what additional steps he is taking or planning to take to protect Hongkongers, Tibetans and Uyghurs from any form of transnational repression? \p Dan Jarvis: I know my hon. Friend takes a very close interest in this subject. I hope he will have seen the very significant package of measures that the Government brought forward a couple of weeks ago. We take issues relating to transnational repression incredibly seriously. We welcome the report from the Joint Committee on Human Rights, to which we have responded. Through the defending democracy taskforce, we have conducted a review of transnational repression in our country. I hope he sees that we take these matters very seriously. The notion that any state, whether it be China or any other, would seek to harm or persecute anybody resident in the United Kingdom is totally unacceptable, and the Government have been consistent in making that point. \p Richard Tice: This report by the Joint Committee on the National Security Strategy is not only damning; it refers to “systemic failures”, “shambolic” aspects and “inadequate” communications. I am particularly struck by paragraphs 41 to 45, which call into question the judgment of the Director of Public Prosecutions. The former independent reviewer of terrorism legislation, Lord Carlile, described the decision not to proceed with the case as “inexplicable”, and the Committee in paragraph 45 is gentle in saying that it was “surprised” by the decision not to proceed. The question has to be asked: do the Government still have confidence in the Director of Public Prosecutions? \p Dan Jarvis: The hon. Member will understand that it would not be appropriate for me, as a Government Minister, to make commentary about the performance of the Director of Public Prosecutions. The CPS and the DPP are operationally independent of Government. The hon. Member will have heard me say that we approach these matters with a degree of humility, and that is the right approach. I gently say to him that he may also want to approach these matters with a degree of humility, given recent events in his own party. \p John Cooper: The Minister and I have clashed over Sun Tzu in the past, but at the risk of riling him again, I want to tell him that Sun Tzu said that sometimes a strategic advantage is to be had by feigning weakness. Every day we fail to add China to the enhanced tier of the foreign influence registration scheme, that is not us feigning weakness; it is weakness. Is that not the case? \p Dan Jarvis: As Christmas approaches, I hope there may be an opportunity for me to have a cup of coffee with the hon. Gentleman, and we can compare our various quotes. I give him an assurance that I never had any concern about his seeking to quote Sun Tzu. My concern was that I think it is possible to find a quote from him that matches any particular argument one wants to progress.

The hon. Member’s substantive point was about FIRS, and he will have heard what I have said today and previously. The Government are looking very closely at whether additional countries should be added to the enhanced tier. When a decision is made about that, we will bring it forward in the usual way. \p Jim Shannon: First, I thank the Minister very much for his careful and helpful answers to questions. Given the collapse of the recent espionage  case and the findings that failures in procedure and co-ordination undermined the prosecution, what specific actions will the Government take to restore confidence in parliamentary security, ensure alleged spy threats are fully investigated and pursue the course of justice so that something similar does not ever happen again? \p Dan Jarvis: I am grateful to the hon. Gentleman, as I am always. He made an important point about parliamentary security, and I hope that, as a very dedicated parliamentarian, he will know that the Government take these matters incredibly seriously. That is why we are working very closely with Mr Speaker and this House, through the defending democracy taskforce, to make sure that we have the appropriate mitigations in place to counter the nature of the threat we face.

I hold the hon. Gentleman in very high regard, and I refer him to what the Prime Minister said on Monday. The Prime Minister made an important point that is highly relevant to the question the hon. Gentleman raised:

“Protecting our security is non-negotiable. Our first duty. But by taking tough steps to keep us secure, we enable ourselves to cooperate in other areas.”

I hope he agrees—I know he does—with that. \p Jim Allister: Today, the Minister has again said that the reason the case collapsed was the inadequacy of the 1911 Act. That raises this obvious question: how come these two gentlemen were ever charged in the first place? The evidential test at the moment they were charged is exactly the same as the evidential test when the case was dropped, so how did they come to be charged under this Act if it was inadequate? Is it not quite clear that the Act was more than adequate to charge them and more than adequate to convict them? \p Dan Jarvis: I am not sure that anybody really thinks that the 1911 Act was appropriate. As the hon. and learned Member will know, because it is a statement of obvious truth, the decision to proceed was taken not under this Government, but under the previous one. All I am able to do in this House is to account for the decisions and actions taken by this Government. What this Government will always do is ensure that we protect our national security. It is our first duty and nothing matters more. \p Caroline Nokes: I thank the Security Minister for his answers this afternoon. \p Calum Miller: (Urgent Question): To ask the Secretary of State for Foreign, Commonwealth and Development Affairs if she will make a statement on imminent US military strikes on land targets in Venezuela, and the implications for UK foreign policy. \p Hamish Falconer: As my hon. Friend the Minister with responsibility for north America—the Minister of State, Foreign, Commonwealth and Development Office, my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty)—told the House yesterday, questions about United States military action in the Caribbean and Pacific are questions for the US. The UK has not been involved in US strikes in the Caribbean. The Foreign Office currently advises against all but essential travel to Venezuela due to ongoing crime and instability. As always, our travel advice remains under regular review to ensure that it reflects our latest assessments of risks to British nationals.

The UK stands with the Venezuelan people in their pursuit of a fair, democratic and prosperous future. Nicolás Maduro’s claim to power is fraudulent. The UK continues to call on the Venezuelan authorities to publish the results of the 2024 presidential election in full. The Government announced sanctions against 15 more members of Maduro’s regime in January. The UK will continue to work with our international partners to achieve a peaceful negotiated transition in Venezuela which ensures that the will of all Venezuelans is respected. \p Calum Miller: I am grateful for the granting of this urgent question, Madam Deputy Speaker, and I am grateful to the Minister for that answer.

At oral questions yesterday, the Foreign Secretary and the Minister of State, Foreign, Commonwealth and Development Office, the hon. Member for Cardiff South and Penarth (Stephen Doughty) both stated that the UK was committed to upholding international law. Last night, Donald Trump announced that US military strikes against Venezuelan land targets would “start…very soon”. Does the Minister believe that such an action would be legal?

Over recent weeks, the US has acted with complete impunity in the Caribbean, conducting unilateral military strikes in international waters with no due process. Let me be very clear. President Maduro is a threat to democracy and civil liberty. He is an ally only to dictators such as Vladimir Putin and President Xi. Yet the UK’s response to the culture of impunity in the Oval Office must be robust and consistent. We must always hold accountable those who breach international law. By failing to do so, we risk normalising abuses that are eroding the international liberal order, all to the benefit of strong men such as Maduro who reject entirely the rule of law.

I have several questions for the Minister. Have US strikes in the Caribbean already violated international law? What steps are the Government taking, including on halting intelligence sharing, to ensure that the UK cannot be complicit in other US violations? Has the  UK been complicit in illegal actions already taken by the US, including the alleged “double tap” operations authorised by War Secretary Hegseth? Does the Minister believe that War Secretary Hegseth has authorised the commitment of war crimes? Finally, will the Minister confirm what further steps the Government are taking to sanction Maduro and his associates, and to work with international allies to strengthen our collective diplomatic and economic pressure on his regime? \p Hamish Falconer: As this House will understand, we must be very careful on making assessments. We, of course, continue to stand by international law. I am not in a position to provide a detailed assessment of the strikes conducted by the US, which are clearly a matter for the US, as the Foreign Secretary and my hon. Friend the Minister of State said during oral questions yesterday. The Liberal Democrat spokesperson asks whether we were involved in the strikes. I confirm again, as we confirmed yesterday, that we were not. He will understand that I will not comment on intelligence matters from the Dispatch Box. He asks about our policy towards Venezuela. As I set out, we do not accept the legitimacy of the current Administration put in place by Nicolás Maduro, but we do maintain limited engagement with Venezuelan officials where necessary. \p Richard Burgon: This is an enormous military build-up under Trump, one of the largest in decades. Retired US generals, along with US politicians including Republicans, are warning that Trump’s strikes off the coast of Venezuela are already violating international law. Yesterday, the Government told me that no British troops are aboard the US warships near oil-rich Venezuela, despite reports to the contrary. What are the Government doing to try to stop Trump from taking this dangerous, escalatory path, which he now says could include land strikes? \p Hamish Falconer: As the Minister of State made clear to my hon. Friend yesterday, the UK is not involved in these operations. There has been, as my hon. Friend mentions, much reporting and speculation in the US media and the US Congress. I do not think it is appropriate for me to comment on the deliberations of their House on these questions. \p Wendy Morton: I am grateful to the hon. Member for Bicester and Woodstock (Calum Miller) for securing this urgent question. Venezuela may be thousands of miles away, but instability there has a direct impact on the safety and prosperity of the British people here. The restoration of democratic institutions is essential if Venezuela is to escape the political, economic and humanitarian crises imposed on its people by Nicolás Maduro’s authoritarian regime. The Maduro regime is propped up by the same axis of authoritarian states that undermine the rules-based international order and foster instability around the world. We know the shocking level of smuggling that comes out of Venezuela, and at a moment when our allies appear to be taking quite decisive action, the world is watching how Britain responds.

What discussions are taking place with President Trump’s Administration about the objectives and scope of any imminent US military action? What would be the implications for the wider UK-US defence partnership, particularly our joint counter-narcotics operations?

The House will also expect clarity on how the Government intend to hold the Maduro regime to account. What further diplomatic pressure, targeted sanctions and co-ordinated international action is the UK pursuing to support Venezuelans fighting for a peaceful, democratic transition?

Will the Minister also update the House on the Government’s position regarding Venezuela’s provocation and aggression towards Guyana, the risks of escalation and the steps being taken with CARICOM—Caribbean Community—partners?

Finally, given the scale of organised crime linked to the regime, what additional measures are being deployed to disrupt drug flows, money laundering and criminal networks that threaten communities here in the UK? Are Interpol and our intelligence partnerships being fully leveraged? Britain cannot afford to be a bystander. The Government must demonstrate clarity, conviction and leadership at this critical moment. \p Hamish Falconer: I thank the right hon. Lady for those important questions. The US is of course the UK’s principal defence and security partner. We have extensive discussions on a wide range of shared security objectives, including counter-narcotics. We are committed to fighting the scourge of drugs and organised crime, including with our partners in Latin America and the Caribbean. We are, of course, continuing to work with our international partners to achieve a peaceful negotiated transition in Venezuela, which ensures that the will of all Venezuelans is respected. \p Scott Arthur: One of my guilty secrets is that I like to listen to CNN in the evening, so I know that people in the United States are divided on this issue. The Minister started by talking about sanctions. Have we assessed the impact of the sanctions on Venezuela? What efforts are we making with civil society there to protect human rights? I really respect the fact that we are not engaging with the way in which the United States is trying to deal with the drug trade there, but are we able to show leadership in the region by trying to restrict the drugs trade in a way that definitely fits with international law? When did he last speak to his counterpart in the US in an effort to reach a peaceful solution on this issue? \p Hamish Falconer: On my hon. Friend’s last question, I understand that the Foreign Secretary has been in discussions with her US counterparts in recent days on these questions. He asks an important question about civil society. We strongly condemn the ongoing repression of civil society and members of the opposition in Venezuela. We continue to call for the unconditional release of those arbitrarily detained, including members of civil society and independent media, such as through the UK’s published statement to the UN Human Rights Council in its most recent session. \p Julian Lewis: President Trump would no doubt argue that there is a parallel between this situation and George Bush senior’s invasion of Panama in late 1989, but does the Minister agree with me that it will be interesting to see, if something like this goes ahead, what sort of outcry there is from either Russia or China? If there is no sort of outcry, would that not suggest that there is some sort of understanding between these three major powers that  they each leave each other to get on with, shall we say, unilateral actions within what they regard as their own spheres of influence? \p Hamish Falconer: The right hon. Gentleman is learned and offers the opportunity both to make historical comparisons and comment on the conduct of other powers. I will avoid the temptation on both. Clearly, the British position is that international law is vital. Counter-narcotics action is important and we support that. \p James MacCleary: Nicolás Maduro’s presidency clearly has no legitimacy after he was so roundly defeated in last year’s elections; he has continued to refuse to release any evidence to show that he was victorious, as he claims. However, does the Minister agree that the presidency of Venezuela is a decision for the Venezuelan people to make in a peaceful, democratic way, supported by the international community—not a decision for the US President to make, under threat of military force? \p Hamish Falconer: I am grateful to the hon. Gentleman for providing an opportunity for me to give a slightly fuller commentary. The UK is clear that the outcome of the 2024 presidential elections in Venezuela was neither free nor fair, and therefore Nicolás Maduro’s claim to power is fraudulent. While the National Electoral Council of Venezuela has not yet published the results of the elections, the results published by the opposition appear to show Edmundo González securing the most votes in the presidential election by a significant margin. Clearly, proper process and a free and fair election is the way to determine the leadership in Venezuela. \p Andrew Murrison: On data sharing with our allies, does the Minister agree that signals intelligence and human intelligence are not a pick and mix when it comes to the Five Eyes community? Will he assure the House that we will continue to provide the information that the US needs in order to deal with Venezuelan cocaine, most of which lands up in Europe? I need not remind the Minister that cocaine deaths in this country were up by a third in 2022-23. Will he ensure that we do not apply an overly lawyerly approach in our dealings with an ally doing its best to tackle the scourge of drugs in the US and the rest of Europe, and in particular on the streets of Britain? \p Hamish Falconer: I thank the hon. Gentleman—my predecessor—for his question. The Government stand by the principles of international law. I will not provide a detailed commentary on intelligence matters, obviously, but I will say that the Five Eyes remains a vital, vibrant and free-flowing intelligence sharing arrangement that allows us to tackle a range of threats. That includes the illegal drug trade, which is having such an impact in both America and the UK; like many others across the House, I see that impact in my constituency. \p Stephen Gethins: Nicolás Maduro is no respecter of the international rules-based system, but we must be. We do not want to see chaos in Latin America, but we are seeing the biggest military build-up in the Caribbean since the Cuban missile crisis and the biggest US military build-up since the war in Iraq. What lessons would the Minister  draw from previous regime change that the UK Government have been involved in, and what advice would he give his US counterparts? \p Hamish Falconer: Again, it is tempting to indulge in some historical analysis, but the advice we give our friends and allies is mostly done in private. Clearly, it is important that the rights of Venezuelans to free and fair elections are respected in the way that I outlined in my previous answer to the hon. Member for Lewes (James MacCleary). \p Mark Pritchard: I will continue with what has been a bit of a history lesson today. President Reagan had his famous wobble over the Falkland Islands but eventually he came to the right decision, supporting the UK at that time. This issue is about how we liaise with the United States as its closest ally—certainly, in our eyes we are its closest ally; whether it is the same the other way around, let us wait and see.

It could be Venezuela today but Cuba tomorrow, and then Haiti and so on and so forth. We need to be candid with the United States, to uphold international law and to encourage our cousins across the water to show restraint, while recognising the need for them to counter the very bad drugs trade going into the United States, which affects crime on the streets in many cities there.

Among the potential impacts of this action are the growing malign influence of both China and Russia in the region and how that might affect proximate Commonwealth countries such as Trinidad and Tobago or Guyana. There are unintended consequences from something that the United States might feel is completely legitimate. Finally, there is the issue of whether this legitimises Putin’s actions in Ukraine. \p Hamish Falconer: I am grateful for the experience that the right hon. Member brings to these questions. I want to be absolutely clear about the pre-eminent role of international law and how important that is to this Government and the actions we take. Those are, of course, points that we make to our allies as well. \p Edward Morello: I say to the right hon. Member for New Forest East (Sir Julian Lewis) that I suspect he grants President Trump far too much credit when it comes to understanding the Munroe doctrine—but that is an aside.

What legal advice have the Government received or obtained in regard to the legality or possible legal implications of support for the US, albeit through intelligence sharing, for any potential strikes on Venezuela? \p Hamish Falconer: As the House will know, Ministers receive legal advice on a range of matters relating to foreign policy, and that advice is subject to legal and professional privilege. \p Jeremy Corbyn: I compliment the hon. Member for Bicester and Woodstock (Calum Miller) on securing this urgent question.

Could the Minister be very clear? What the US is doing, in bombing vessels at sea in both international and potentially territorial waters, is illegal, as is the harassment of Trinidadian fishing communities. The threat now of bombardment on the Venezuelan mainland is completely illegal within all sections of international law. Have the British Government made any representations to the US on this, and what role do the British Government play at the United Nations in the discussions about this issue? Does the Minister accept that this is an incredibly dangerous, massive build-up of military force in the Caribbean, and that it can only be dangerous to the people not just of Venezuela but of every other country and island within the region? Surely there should be some move towards peace, rather than allowing this military confrontation to develop. \p Hamish Falconer: The right hon. Gentleman brings considerable experience of Latin American issues to this House. On the legal position, I do not have much more to add. There has been extensive reporting over the last few days of some specific US strikes. I reiterate to him that they were not strikes in which the UK had any role, so we are not in a position to provide the fuller explanation that we would have, had we been involved—which we were not. On his wider question about build-up in the region, the House has heard his views. \p Martin Wrigley: I thank the Minister for his answers so far. I reiterate the question of the legality of the US bombing ships that are simply accused of carrying drugs. Is the Minister willing to actually say whether he thinks that is legal or not legal in international waters? \p Hamish Falconer: I want to be absolutely clear that the UK Government stand behind international law, in relation to both the law of the sea and international humanitarian law. In every forum, that is what we stand for. I am not in a position to make assessments on individual strikes, for the reasons that I have set out, but I once again underline our position on IHL and the law of the sea. \p Jim Shannon: I thank the Minister for his careful and thoughtful answers on an issue that concerns us greatly. Given the widespread concern about the potential for civilian casualties from these strikes near Venezuela, what assessment has been made to ensure that UK co-operation in the region does not in any way contribute to harming civilians, and remains fully consistent with our human rights obligations? \p Hamish Falconer: As ever, the hon. Gentleman asks an important question in a courteous way. The prospects for the people of Venezuela must be at the heart of our deliberations. We have been engaged with civil society and, where necessary, with the Venezuelan Government. We will continue to keep the human rights of the people of Venezuela in our minds. \p UNKNOWN: Motion for leave to bring in a Bill (Standing Order No. 23) \p Yasmin Qureshi: I beg to move,

That leave be given to bring in a Bill to make provision about the maximum noise levels of fireworks which may be sold to the public; to require that specified information about noise levels is included on labelling and in sales information for fireworks; to require the Secretary of State to review the impact of firework noise on the welfare of veterans, neurodivergent people, people with certain medical conditions, and animals; to provide local authorities with power to regulate the use of fireworks in certain circumstances, and to enforce such regulation; and for connected purposes.

Fireworks bring joy to many people and are an important part of celebrations, but every year I hear the same concerns from residents about the impact of loud, unpredictable fireworks going off late at night. They are not talking about organised displays; they mean sudden explosions in residential streets at 11 o’clock, midnight or later. These bangs startle children, frighten older people, distress pets and livestock, and overwhelm people managing health conditions or trauma. The same groups feel it most: children with sensory needs; older residents living alone; people with anxiety or heart conditions; and animals.

At the moment, there is very little anyone can do about it. Councils receive complaints but have no power to act, and the police understandably focus on more urgent priorities. Fireworks are often sold without clear information on how loud they are. This Bill would close those gaps in a simple, fair and proportionate way.

The public are ahead of us on this. Polling shows that 85% of people want stronger rules on fireworks, almost half want private backyard displays banned and a further third want tighter restrictions. This is not a new concern: over the years, Parliament’s petition system has received hundreds of thousands of signatures calling for action.

One family told me that their autistic son becomes extremely distressed by unexpected fireworks. He screams, hides and cannot settle for hours. They want him to enjoy celebrations like any other child, but unpredictable late-night fireworks make evenings frightening, rather than joyful. Another constituent—a lady in her seventies who lives alone—said that loud fireworks at night make her feel as though she is in a war zone. She asks, quite reasonably, why something cannot be done about the loud ones. Research shows what our residents want. The problem is not organised displays that people can prepare for; the problem is unpredictable fireworks set off in neighbourhoods.

The impact on veterans is also well documented. The BBC reported on Pete White, an RAF veteran with PTSD for whom sudden loud fireworks triggered panic attacks, taking him straight back to the sounds of conflict. He described it as an “uncontrollable sense of terror”. Organised displays with clear timings help him to prepare, but unexpected fireworks made life difficult for him. At one point, his anxiety became so severe that he struggled for weeks.

Combat Stress reports a 25% increase in calls at this time of year. It wants a review of current rules, clearer safety information and limits on when fireworks can be  sold and used. Help for Heroes and Combat Stress also found that 74% of veterans want stricter rules on fireworks, while 67% want fewer days of sale.

The effect on animals is significant. Since 2010, more than a thousand incidents involving horses have been recorded during fireworks season, including tragic fatalities. Many owners receive no notice before displays and cannot protect their animals in time. Farm animals are affected, too: stress can cause ewes to abort during lambing and can separate mothers from their young. Wildlife also suffers, with studies showing sharp increases in heart rates among birds and disruption to roosting. This distress is real and avoidable.

Fireworks also have a public health impact. Air pollution can rise several times higher than normal when fireworks are widely used, especially on still winter nights, and people with asthma, chronic obstructive pulmonary disease and other respiratory conditions are particularly affected. Health professionals have raised concerns about the pressure this places on vulnerable groups and on our NHS.

The Bill proposes to do five things. First, it would introduce a maximum noise limit. Some fireworks reach 120 decibels, which is far louder than necessary for home use. Research shows that reducing the noise down to between 90 dB and 97 dB is achievable and supported by health and welfare experts. The Bill sets a reasonable maximum noise level for fireworks sold to the public, but louder fireworks would still be available for licensed displays where there is notice and supervision.

Secondly, most fireworks provide little information about how loud they are. The Bill would require clear labelling so that people know what they are buying. It would also support councils and trading standards teams when responding to complaints.

Thirdly, councils say the current rules are almost impossible to enforce; fireworks are a transient nuisance and are gone by the time anyone arrives. The Bill would give councils the ability to introduce targeted, time-limited rules in areas with repeated problems. It would not be a blanket ban. It would build on tools councils already use for noise and antisocial behaviour, letting councils respond directly to their communities.

Fourthly, civil enforcement rules currently rely on the police, which is unrealistic and ineffective. The Bill would give councils the power to issue civil penalties similar to how they deal with littering, fly-tipping and environmental noise. It is practical, proportionate and fair.

Fifthly, the Bill would also require the Secretary of State to review the impact of firework noise on veterans, neurodivergent people, people with certain medical conditions and animals, ensuring that future policy is based on proper evidence.

Colleagues have brought forward important proposals before. My hon. Friend the Member for Bradford South (Judith Cummins), one of the Deputy Speakers, has focused on noise limits, while my hon. Friend the Member for Luton North (Sarah Owen) has focused on sales and licensing. This Bill is a bit different: it focuses on community impact, late-night misuse, unpredictability and, more importantly, council powers. These approaches complement each other. This Bill fills the missing part.

In conclusion, I am not a party pooper. I do not want to ban fireworks; I want the celebrations to continue. We want the loudest fireworks to be used safely, predictably  and with respect for neighbours. People want their families, pets and vulnerable neighbours to feel safe in their homes. They want councils to have the ability to act, and they want fireworks to be sold responsibly and clearly labelled. This Bill offers a balanced and practical way forward. I commend it to the House.

Question put and agreed to.

Ordered,

That Yasmin Qureshi, Jim McMahon, Sarah Champion, Debbie Abrahams, Liz Saville Roberts, Emma Lewell, Jamie Stone, Nadia Whittome, Mr Tanmanjeet Singh Dhesi, Chris Law, Imran Hussain and Alex Sobel present the Bill.

Yasmin Qureshi accordingly presented the Bill.

Bill read the First time; to be read a Second time on Monday 26 January and to be printed (Bill 343). \p UNKNOWN: Consideration of Bill, as amended in the Public Bill Committee \p UNKNOWN: “(1) In the Pension Schemes Act 1993, in section 175(1) (general levy)—

(a) omit the “or” at the end of paragraph (d);

(b) after that paragraph insert—

“(da) of the Secretary of State under section 209(6) of the Pensions Act 2004 (payments to PPF Ombudsman), or”

(2) In section 209 of the Pensions Act 2004 (ombudsman for the Board of the Pension Protection Fund), omit subsections (7) and (8).”—(Torsten Bell.)

This new clause (which is intended to be added after clause 112) enables the expenditure of the Ombudsman for the Board of the Pension Protection Fund to be paid from money raised by the general levy payable by occupational pension schemes, and removes the power to impose a separate levy to meet this expenditure.

Brought up, and read the First time. \p Torsten Bell: I beg to move, That the clause be read a Second time. \p Caroline Nokes: With this it will be convenient to discuss the following:

Government new clause 31—Indexation of periodic compensation for pre-1997 service: Great Britain.

Government new clause 32—Indexation of periodic compensation for pre-1997 service: Northern Ireland.

Government new clause 33—Financial Assistance Scheme: indexation of payments for pre-1997 service.

Government new clause 34—Exemption from public procurement rules.

Government new clause 35—Funding of the Board of the Pension Protection Fund.

New clause 1—Independent review into pension losses incurred by former employees of AEA Technology—

“(1) The Secretary of State must, within three months of the passing of this Act, commission an independent review into the pension losses incurred by former employees of AEA Technology who—

(a) transferred their accrued pension benefits out of the UK Atomic Energy Authority (UKAEA) public service scheme to AEA Technology (AEAT) on privatisation in 1996, and

(b) suffered financial losses when AEA Technology went into administration in 2012 and the pension scheme entered the Pension Protection Fund (PPF).

(2) The review must examine—

(a) the extent and causes of pension losses incurred by affected individuals,

(b) the role of Government policy and representations in the transfer of pensions during the privatisation of AEA Technology,

(c) the findings of the Public Accounts Committee and the Work and Pensions Select Committee,

(d) the adequacy of safeguards provided at the time of privatisation,

(e) potential mechanisms for redress or compensation, and

(f) the estimated financial cost of any such mechanisms.

(3) The review must be—

(a) conducted by an independent panel appointed by the Secretary of State, with relevant expertise in pensions, public policy, and administrative justice, and

(b) transparent and consultative, including engagement with affected pensioners and their representatives.

(4) The panel must report its findings and recommendations to the Secretary of State and lay a copy of its final report before Parliament within 12 months of its establishment.

(5) The Secretary of State must, within 6 months of the publication of the report under subsection (4), lay before both Houses of Parliament a statement setting out the Secretary of State’s response to that outcome.”

This new clause would require the Secretary of State to commission an independent review into the pension losses incurred by former employees of AEA Technology.

New clause 2—Transfer of British Coal Staff Superannuation Scheme investment reserve to members—

“(1) Within 3 months of the passing of this Act, the Secretary of State must by regulations make provision for the transfer of the British Coal Staff Superannuation Scheme investment reserve to members of the scheme.

(2) Those regulations must include—

(a) a timetable for transferring the total of the investment reserve to members of the scheme, and

(b) plans for commissioning an independent review into how future surplus will be shared.

(3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

This new clause would require the Secretary of State to set out in regulations a timetable for transferring the whole of the BCSSS investment reserve to members and committing to review how future surplus will be shared.

New clause 3—Terminal illness: means of demonstrating eligibility—

“(1) The Secretary of State must by regulations make provision about how a person may demonstrate that they are terminally ill for purposes relating to compensation or assistance from the Pension Protection Fund or Financial Assistance Scheme.

(2) In making regulations under this section, the Secretary of State must seek to minimise the administrative burden placed upon the person with a terminal illness.

(3) Regulations under this section must provide that, where the Department of Work and Pensions (“the Department”) holds a valid SR1 form in respect of a person seeking to demonstrate that they are terminally ill for purposes relating to compensation or assistance from the Pension Protection Fund or Financial Assistance Scheme, the Department must share that form with the Pension Protection Fund or the Financial Assistance Scheme.

(4) Regulations under this section must require the Pension Protection Fund and the Financial Assistance Scheme to make the appropriate payment or payments within a specified time of receipt of a valid application.”

This new clause would require the Secretary of State to provide, by regulations, for the use of a valid SR1 form to make it easier for a person to demonstrate that they are terminally ill for purposes related to compensation from the PPF or FAS.

New clause 4—Review into investment in defence companies—

“(1) The Secretary of State must, within six months of the passing of this Act, carry out a review into investment in defence companies within Local Government Pension Schemes.

(2) The review must consider how the investment in defence companies—

(a) impacts on, and

(b) aligns with,

the UK Government’s international obligations.

(3) The Secretary of State must prepare a report of the review and lay a copy of that report before Parliament.”

This new clause would require the Secretary of State to conduct a review into investment in defence companies within Local Government Pension Schemes and how that impacts and aligns with Government international obligations.

New clause 5—Review into defined benefit schemes’ social impact—

“(1) The Secretary of State must, within 12 months of the passing of this Act, carry out a review into the social impact of defined benefit schemes.

(2) The review must include an assessment of—

(a) the efficacy of investment strategies in delivering social good, and

(b) the potential impact of increasing investment in—

(i) social housing, and

(ii) green technology.

(3) For the purposes of this section—

“social good” means something which benefits society as a whole, and

“green technology” means the use of technology and science to create environmentally-friendly products and services.

(4) The Secretary of State must prepare a report of the review and lay a copy of that report before Parliament.”

This new clause would require the Secretary of State to review the efficacy of investment in terms of delivering social good and the benefits of directing more investment towards social housing and green technology.

New clause 6—Indexation of pre-1997 service—

“(1) The Secretary of State must by regulations make provision for indexation on compensation in respect of pre-1997 rights for members of the Pension Protection Fund and the Financial Assistance Scheme.

(2) Those regulations must specify that—

(a) pension payments from the PPF and FAS are increased each year in line with Consumer Prices Index (CPI) inflation for pensionable service before and after 6 April 1997,

(b) where a PPF or FAS member has pensionable service prior to 6 April 1997 which has not increased each year in line with CPI inflation, but which their scheme provided for, the scheme manager must—

(i) determine the annual increase attributable to that service for each year since the date on which the annual payment was first payable, and

(ii) reimburse the member for the amount determined under paragraph (b)(i), and

(c) increased payments must also apply to transferee members, to ill health payments and to payments to surviving dependants.

(3) Regulations under this section—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.”

This new clause would require the Secretary of State to provide, through regulations, for indexation on PPF and FAS compensation in respect of pre-1997 rights.

New clause 7—Report on indexation of pre-1997 Pension Protection Fund and Financial Assistance Scheme benefits—

“(1) The Secretary of State must, within 12 months of the passing of this Act, publish a report on options for providing indexation to pension rights relating to pre-1997 service in the Pension Protection Fund (PPF) and the Financial Assistance Scheme (FAS).

(2) The report must consider—

(a) the current absence of indexation on pre-1997 accrued rights and the financial impact on affected pensioners;

(b) the number of pensioners affected and the mortality rates since the establishment of FAS and PPF, including evidence from the Pensions Action Group;

(c) the feasibility of introducing indexation, in full or in part, for pre-1997 rights;

(d) the potential use of scheme reserves, including residual funds from failed schemes transferred into the FAS, and the implications for taxpayers;

(e) the urgency of reform given the age profile of affected members and the social impact of frozen incomes;

(f) alternative funding mechanisms that could deliver indexation without undermining the sustainability of the PPF; and

(g) comparative approaches to legacy benefit indexation in other jurisdictions.

(3) In preparing the report, the Secretary of State must consult—

(a) the Pensions Regulator,

(b) the Pension Protection Fund,

(c) representatives of Financial Assistance Scheme members,

(d) the Pensions Action Group, and

(e) such other stakeholders as the Secretary of State considers appropriate.

(4) The Secretary of State must lay a copy of the report before both Houses of Parliament.”

This new clause would require the Secretary of State to publish a report examining options for addressing the lack of indexation on pre-1997 pensionable service in the PPF and FAS, with particular regard to evidence provided by the Pensions Action Group, mortality data, scheme reserves, and the urgency of the issue.

New clause 8—Universal Pension Advice Entitlement—

“(1) The Secretary of State must by regulations establish a system to ensure that every individual has a right to receive free, impartial pension advice at prescribed times.

(2) Regulations under subsection (1) must provide for individuals to be offered advice—

(a) at or around the age of 40; and

(b) at a prescribed age, not more than six years before the individual's expected retirement age.

(3) The regulations must make provision about—

(a) the content and scope of the free, impartial pension advice, which may include, but is not limited to, guidance on—

(i) pension types (including both defined contribution and defined benefit schemes),

(ii) investment strategies,

(iii) charges,

(iv) consolidation of pension pots, and

(v) retirement income options;

(b) the qualifications, independence, and impartiality requirements for any person or body providing advice;

(c) the means by which individuals are notified of their entitlement to receive the advice and how they may access it;

(d) the roles and responsibilities of pension scheme trustees, managers, and providers in facilitating access to advice;

(e) the sharing member information with prescribed persons or bodies subject to appropriate data protection safeguards.

(4) Regulations under this section may—

(a) make different provision for different descriptions of pension schemes or different descriptions of individuals;

(b) confer functions in connection with the provision or oversight of the advice on—

(i) the Pensions Regulator,

(ii) the Financial Conduct Authority,

(iii) the Money and Pensions Service, or

(iv) other prescribed bodies;

(c) require the provision of funding for the advice service from prescribed sources.

(5) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

This new clause makes provision by regulations for everyone to receive free, impartial pension advice at age 40 and again around five years before their expected retirement.

New clause 10—Independent review of forfeiture of survivor pensions in police pension schemes—

“(1) The Secretary of State must commission an independent review into the impact and fairness of provisions within police pension schemes that result in the forfeiture, reduction, or suspension of survivor pensions on the grounds of—

(a) remarriage or entry into a civil partnership by the surviving partner of a deceased scheme member; or

(b) cohabitation with another person as if married or in a civil partnership.

(2) The review must examine—

(a) the legal and policy basis for such provisions;

(b) the financial, social, and emotional impact on affected individuals and families;

(c) consistency with other public sector pension schemes, including schemes for—

(i) the Armed Forces,

(ii) the NHS, and

(iii) the civil service;

(d) potential options for reform, including retrospective reinstatement of pensions;

(e) any other matters the Secretary of State considers relevant.

(3) The Secretary of State must—

(a) appoint an independent person or panel with relevant legal, pensions, and public policy expertise to conduct the review; and

(b) publish the terms of reference no later than three months after this Act is passed.

(4) The person or panel appointed under subsection (3) must—

(a) consult with relevant stakeholders, including—

(i) the National Association of Retired Police Officers (NARPO),

(ii) survivor pension recipients,

(iii) police staff associations, and

(iv) pensions experts;

(b) consider written and oral evidence submitted by affected individuals; and

(c) publish a report of its findings and recommendations within 12 months of appointment.”

This new clause would require the Secretary of State to commission an independent review into the impact and fairness of provisions within police pension schemes that result in the forfeiture, reduction, or suspension of survivor pensions.

New clause 11—Independent review into state deduction in defined benefit pension schemes—

“(1) The Secretary of State must, within three months of the passing of this Act, commission an independent review into the application and impact of state deduction mechanisms in occupational defined benefit pension schemes.

(2) The review must consider—

(a) the origin, rationale and implementation of state deduction in the Midland Bank Staff Pension Scheme,

(b) the clarity and adequacy of member communications regarding state deduction from inception to present,

(c) the differential impact of state deduction on pensioners with varying salary histories, including an assessment of any disproportionate effects on—

(i) lower-paid staff, and

(ii) women,

(d) comparisons with other occupational pension schemes in the banking and public sectors, and

(e) the legal, administrative, and financial feasibility of modifying or removing state deduction provisions, including potential mechanisms for redress.

(3) The Secretary of State must ensure that the person or body appointed to conduct the review—

(a) is independent of HSBC Bank plc and its associated pension schemes;

(b) possesses relevant expertise in pensions law, occupational pension scheme administration, and equality and fairness in retirement income; and

(c) undertakes appropriate consultation with—

(i) affected scheme members,

(ii) employee representatives,

(iii) pension experts, and

(iv) stakeholder organisations.

(4) The person or body conducting the review must—

(a) submit a report on its findings to the Secretary of State within 12 months of the date the review is commissioned; and

(b) the Secretary of State must lay a copy of the report before Parliament and publish the report in full.

(5) Within three months of laying the report before Parliament, the Secretary of State must publish a written response setting out the Government’s proposed actions, if any, in response to the report’s findings and recommendations.

(6) For the purposes of this section—

“state deduction” means any provision within a defined benefit occupational pension scheme that reduces pension entitlements by reference to the member reaching state pension age or by reference to any state pension entitlement;

“defined benefit pension scheme” has the meaning given in section 181 of the Pension Schemes Act 1993;

“Midland Bank Staff Pension Scheme” includes all associated legacy arrangements and any successor schemes administered by HSBC Bank Pension Trust (UK) Ltd.”

This new clause would require the Secretary of State to commission an independent review into clawback provisions in occupational defined benefit pension schemes, in particular, the Midland Bank staff pension scheme.

New clause 12—Section 40 commencement—

“(1) The provisions in section 40 shall not come into force except in accordance with regulations made by the Secretary of State.

(2) A statutory instrument containing regulations under subsection (1) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

This new clause would require that the provisions in clause 40 could only be enacted once agreed through secondary legislation.

New clause 13—Targeted Advice Access for Under-Saving Cohorts—

“(1) The Secretary of State must make regulations to provide enhanced access to pension advice or guidance for cohorts identified as under-saving for retirement.

(2) Regulations may make provision for—

(a) identifying under-saving groups, including but not limited to—

(i) women,

(ii) ethnic minority groups, and

(iii) others affected by long-term pay or pension gaps;

(b) mechanisms to fund and deliver targeted support;

(c) reporting and evaluation requirements to assess take-up and effectiveness.

(3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

This new clause allows for the creation of targeted pension advice or guidance interventions for groups at risk of under-saving for retirement.

New clause 14—Cap on cost of advice for pension holders—

“(1) The Secretary of State may by regulations introduce a cap on the cost recoverable for providing pension advice per pension holder under any scheme operating free or subsidised advice.

(2) The cap may vary depending on—

(a) the value of the pension pot;

(b) the type of pension scheme;

(c) the complexity of advice required.

(3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

This new clause enables the introduction of a cost ceiling for advice provision to members of pension schemes.

New clause 15—Independent review into the British Coal Staff Superannuation Scheme—

“(1) The Secretary of State must, within three months of the passing of this Act, commission an independent review into the treatment of members of the British Coal Staff Superannuation Scheme (BCSSS).

(2) The review must consider—

(a) the origin and operation of the Government’s surplus-sharing arrangements with the BCSSS since 1994,

(b) the adequacy of communication to scheme members regarding the use of surpluses,

(c) the impact of the Government’s retention of scheme reserves on members’ retirement income,

(d) representations made by the Trustees of the BCSSS calling for reserves to be released to members, and

(e) options for reforming how any future surpluses in the BCSSS are shared between the Government and scheme members.

(3) The person or body appointed to conduct the review must—

(a) be independent of the Government and the BCSSS Trustees,

(b) possess relevant expertise in pensions law and scheme administration, and

(c) consult with affected members, Trustees, pension experts, and stakeholder organisations.

(4) The review must report to the Secretary of State within 12 months of being commissioned, and the Secretary of State must lay the report before Parliament and publish it in full.

(5) Within three months of publication, the Secretary of State must publish the Government’s response to the review’s findings.”

This new clause would require the Secretary of State to commission an independent review into the treatment of members of the British Coal Staff Superannuation Scheme, including the handling of scheme reserves and future surplus-sharing arrangements.

New clause 16—Report on Pension Scheme Eligibility and Access—

“(1) The Secretary of State shall, within 12 months of the passing of this Act, lay before Parliament a report into the operation of occupational pension schemes where certain categories of employees have been excluded on the basis of job classification or employment start date.

(2) The report must examine the case of employees and former employees of Fife Joinery Manufacturing (a subsidiary of Velux), including—

(a) whether affected workers were provided with opportunity to join existing pension schemes,

(b) the adequacy of record-keeping and employer accountability, and

(c) potential remedies to ensure equal access to workplace pensions.”

This new clause would require the Secretary of State to report on the Velux Pensions case.

New clause 17—Clarification of pension scheme investment duties—

“(1) The Pensions Act 1995 is amended as follows.

(2) In section 36 (Choosing investments), after subsection (9), insert—

“(10) Regulations under subsection (1) must provide—

(a) that when interpreting the best interest or sole interests of members and beneficiaries for the purposes of this section and the regulations, the trustees of a trust scheme may (amongst other matters) take the following into account—

(i) system-level considerations,

(ii) the reasonably foreseeable impacts over the appropriate time horizon of the assets or organisations in which the trust scheme invests upon prescribed matters, including upon members’ and beneficiaries’ standards of living, and

(iii) the views of members and beneficiaries;

(b) that investment powers or discretions must be exercised in a manner that considers and manages the matters specified in subsection (10)(a)(i) and (ii) where they are financially material; and

(c) a prescribed definition of the term “appropriate time horizon” for these purposes.

(11) For the purposes of this section, “system-level considerations” means, over the appropriate time horizon, risks and opportunities relevant to the scheme that—

(a) cannot be fully managed through diversification alone, and

(b) arise from circumstances at the level of one or more economic sectors, financial markets or economies, including but not limited to those relating to environmental or social matters.

(12) Regulations under subsection (1) must come into force no more than one year after the passing of the Pension Schemes Act 2025.

(13) In complying with requirements imposed by this section and regulations, a trustee or manager must have regard to guidance prepared from time to time by the Secretary of State.”

(3) The Financial Conduct Authority must make general rules with effects corresponding to the provisions of subsection (1) for providers of pension schemes to which Part 7A of the Financial Services and Markets Act 2000 (inserted by section 48 of this Act) applies.

(4) The Secretary of State must make regulations with effects corresponding to the provisions of subsection (1) for scheme managers of the Local Government Pension Scheme.

(5) The rules and regulations under subsections (3) and (4) must come into force no later than the date on which regulations pursuant to section 36(10) of the Pensions Act 1995 (as amended by this Act) come into force.”

This new clause gives the Secretary of State a duty to make regulations clarifying investment duties of occupational pension schemes, including system-level considerations and other matters including impacts of investee firms, beneficiaries’ standards of living and views. It also imposes duties on the FCA and the Secretary of State to make corresponding rules and regulations for workplace personal pension schemes and the Local Government Pension Scheme respectively.

New clause 18—Report on indexation of pre-1997 benefits—

“(1) The Secretary of State must, within 6 months of the passing of this Act, publish a report on whether the Pension Protection Fund and the Financial Assistance Scheme should provide indexation on compensation in respect of pre-1997 rights, where pension schemes provided for that.

(2) The report must consider—

(a) the potential benefits for affected pensioners;

(b) approaches of occupational pension schemes to indexation of pre-1997 benefits;

(c) the impact on compensation schemes’ surpluses and on public finances;

(d) international approaches to indexation of legacy pension benefits.

(3) The Secretary of State must lay a copy of the report before both Houses of Parliament.”

This new clause requires the Secretary of State to report on whether the PPF and FAS should provide indexation on compensation in respect of pre-1997 rights, where scheme rules provided for that.

New clause 19—Fossil fuels and climate change risk—

“(1) The Pensions Act 1995 is amended as follows.

(2) In section 41A (Climate change risk), after subsection (6) insert—

“(6A) Regulations under subsection (1) must, within 1 year of the Pension Schemes Act 2025 receiving Royal Assent, prohibit the trustees or managers of schemes of a prescribed description from holding relevant assets.

(6B) The relevant assets in subsection (6A) are issuance by issuers which, in relation to thermal coal—

(a) derive 10% or more of annual revenue from its production, transport or combustion,

(b) produce annually 10 million tonnes or more, or

(c) have 5GW or more of power generation capacity.

(6C) Within 2 years of the Pensions Act 2025 receiving Royal Assent, and every 3 years thereafter, the Secretary of State must carry out and publish a review on whether the definition of relevant assets should be extended to include—

(a) issuance by issuers which, in relation to thermal coal, derive a smaller proportion of revenue, produce a smaller amount or have a smaller amount of power generation capacity than the proportion and amounts specified in (6B),

(b) some or all new issuance by issuers of a prescribed description deriving a prescribed proportion or amount of their revenue from the extraction, transport, trading or combustion of prescribed fossil fuels, or

(c) some or all new or existing issuance by issuers of a prescribed description investing a prescribed proportion or amount in exploring for, or expanding the extraction of, prescribed fossil fuels.

(6D) Regulations under subsection (1) may implement the conclusions of the review referred to in (6C).”

(3) In subsection (8), at end insert—

““thermal coal” means coal and lignite used in the generation of electricity and in providing heat for industrial or residential purposes;

“issuance” means all investable assets, including equity and debt.”

(4) The Financial Conduct Authority must make general rules with effects corresponding to the provisions of subsection (1) for providers of pension schemes to which Part 7A of the Financial Services and Markets Act 2000 (inserted by section 48 of this Act) applies.

(5) The Secretary of State must make regulations with effects corresponding to the provisions of subsection (1) for scheme managers of the Local Government Pension Scheme.

(6) The rules and regulations under subsections (4) and (5) must come into force no later than the date on which regulations pursuant to section 41A(6A) of the Pensions Act 1995 (as amended by this Act) come into force.”

This new clause would require Government and the FCA to make regulations and rules restricting exposure of some occupational and workplace personal schemes to thermal coal investments and to regularly review whether the restrictions should be extended to other fossil fuel investments.

New clause 20—Pensions and savings advice allowance—

“(1) The Secretary of State must by regulations make provision for a tax-free pensions and savings advice allowance which individuals between the ages of 30 and 50 can withdraw from their pensions to access financial advice.

(2) Regulations must specify—

(a) the maximum amount for the pensions and savings advice allowance,

(b) the content and scope of the pensions and savings advice,

(c) the qualifications and independence requirements of any person or body providing pensions and savings advice,

(d) the means by which individuals are notified of their entitlement to the pensions and savings advice allowance and how they may access—

(i) the allowance, and

(ii) advisers who meet the requirements under subsection (2)(c),

(e) the roles and responsibilities of pension scheme trustees, managers, and providers in facilitating access to the pensions and savings advice allowance, and

(f) whether the pensions and savings advice allowance counts towards the Individual Lump Sum Allowance.

(3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

This new clause requires the Secretary of State to introduce, by regulations, a pensions and savings advice allowance which individuals between the ages of 30 and 50 can withdraw from their pension savings tax-free to access appropriate financial advice.

New clause 21—Significant life event lump sum—

“(1) The Secretary of State must by regulations make provision for a significant life event lump sum of up to £5,000 which a person is entitled to before they attain normal pension age.

(2) The regulations may prescribe circumstances in which, and conditions subject to which, a person may become entitled to a significant life event lump sum, including—

(a) purchasing a first home;

(b) getting married;

(c) unexpected loss of employment.

(3) The regulations must specify that the significant life event lump sum counts towards the Individual Lump Sum allowance.

(4) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

This new clause would require the Secretary of State to introduce, by regulations, a significant life event lump sum of up to £5,000 tax-free which individuals can take from their lump sum allowance prior to reaching pension age.

New clause 22—Indexation of pre-1997 pensions—

“(1) The Pensions Act 1995 is amended as follows.

(2) In Section 51 (Annual increase in rate of pension), omit subsections (1)(b) and (1)(c)(ii).

(3) In subsection (2), leave out from “pensionable service,” to “or”.

(4) In subsection (2), leave out from “commencement day]” to “—".

(5) In subsection (2)(b), leave out from “pensionable service” to “, so much of”.

(6) In subsection (4ZE), leave out from “pensionable service” to “in subsections (3) to (4ZD)”.

(7) In subsection (5)(a), leave out “6 April 1997 or”.

(8) In subsection (8)(a) and (b), leave out “at any time on or after 6 April 1997”.”

This new clause would remove references to 6 April 1997 from section 51 of the Pensions Act 1995 in order to require that annual increases to pension payments in line with CPI and RPI apply to pensionable service both before and after 6 April 1997.

New clause 23—Indexation of pre-1997 service—

“(1) The Secretary of State must by regulations make provision for the use of Pension Protection Fund surplus/reserve funds for the indexation on compensation in respect of pre-1997 rights for members of the Pension Protection Fund and the Financial Assistance Scheme.

(2) Those regulations must specify that—

(a) pension payments from the PPF and FAS are increased each year in line with Retail Prices Index (RPI) inflation for pensionable service before and after 6 April 1997,

(b) the cap on the annual increase is raised to 7%,

(c) where a PPF or FAS member has pensionable service prior to 6 April 1997 which has not increased each year in line with RPI inflation, the scheme manager must—

(i) determine the annual increase attributable to that service for each year since the date on which the annual payment was first payable, and

(ii) reimburse the member for the amount determined under paragraph (c)(i), and

(d) payments made to reimburse members under paragraph (c)(ii) must be made from Pension Protection Fund surplus funds and future funds.

(3) Regulations under this section—

(a) shall be made by statutory instrument, and

(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.”

This new clause would require the Secretary of State to provide, through regulations, for indexation on PPF and FAS compensation in respect of pre-1997 rights, for indexation to follow RPI inflation with a cap of 7%, and for retrospective payments to be funded from PFI surplus and/or reserve funds.

New clause 24—Indexation of pre-1997 pensions—

“(1) The Pensions Act 1995 is amended as follows.

(2) In Section 51 (Annual increase in rate of pension), omit subsections (1)(b) and (1)(c)(ii).

(3) In subsection (2), after “52” insert “52A”.

(4) In subsection (2), leave out from “pensionable service,” to “or,”.

(5) In subsection (2), leave out from “commencement day]” to “—”.

(6) In subsection (2)(b), leave out from “pensionable service” to “, so much of”.

(7) In subsection (4ZE), leave out from “pensionable service” to “in subsections (3) to (4ZD)”.

(8) In subsection (5)(a), leave out “6 April 1997 or”.

(9) In subsection (8)(a) and (b), leave out “at any time on or after 6 April 1997”.

(10) After Section 52 (Restriction on increase where member is under 55) insert—

“52A Restriction on increase where a pension scheme is not in surplus

No increase under section 51 in the annual rate of a pension shall not be paid or shall not be paid in full unless the pension scheme is in surplus.””

This new clause would remove references to 6 April 1997 from section 51 of the Pensions Act 1995 to require that annual increases to pension payments in line with CPI and RPI apply to pensionable service both before and after 6 April 1997, with the restriction that annual increases would only be paid if the pension scheme is in surplus.

New clause 25—Review of impact of this Act—

“(1) Within five years of the passing of this Act, the Secretary of State must carry out a review of the impact of the provisions of this Act on actual and projected retirement incomes.

(2) The review must consider—

(a) the impact of the provisions of this Act on actual and projected retirement incomes, and

(b) whether further measures are needed to ensure that pension scheme members receive an adequate income in retirement.

(3) The Secretary of State must prepare a report of the review and lay a copy of that report before Parliament.”

This new clause would require the Secretary of State to review the impact of this Act on retirement incomes and whether additional measures are needed to ensure the adequacy of retirement incomes.

New clause 26—Establishment of targeted investment vehicles for pension funds—

“(1) The Secretary of State may by regulations make provision for the establishment or facilitation of one or more investment vehicles through which pension schemes may invest for targeted social or economic benefit.

(2) Regulations under subsection (1) must specify the descriptions of targeted social or economic benefit to which the investment vehicles are to contribute, which may include, but are not limited to, investment in—

(a) projects that revitalise high street areas;

(b) initiatives demonstrating social benefit;

(c) affordable or social housing development;

(d) capital projects that meet essential public needs, such as care homes;

(e) clean, renewable energy projects.

(3) The regulations must make provision for—

(a) the types of pension schemes eligible to participate in such investment vehicles;

(b) the governance, oversight, and reporting requirements for the investment vehicles and participating pension schemes;

(c) the means by which the contribution of such investments to targeted social or economic benefit is measured and reported;

(d) the roles and responsibilities of statutory bodies, including the Pensions Regulator and the Financial Conduct Authority, in authorising, regulating, or supervising such investment vehicles and the participation of pension schemes within them.

(4) The regulations may—

(a) make different provision for different descriptions of pension schemes, investment vehicles, or targeted social or economic benefits;

(b) provide for the pooling of assets from multiple pension schemes within such vehicles;

(c) require pension scheme trustees or managers to have regard to the availability and suitability of investment vehicles when formulating investment strategies, where consistent with—

(i) their fiduciary duties, and

(ii) the long-term value for money for members.

(5) In this Chapter, "pension scheme" has the same meaning as in section 1(5) of the Pension Schemes Act 1993.”

This new clause would allow the Secretary of State to establish investment funds to encourage investment in areas such as high streets, social housing, care homes, clean renewable energy, and other investments with clear social benefits.

New clause 27—Review of proposed mandated investment powers and their impacts—

“(1) The Secretary of State must, before making any regulations under this Act relating to mandated investment requirements for pension schemes, lay before Parliament a report reviewing the potential impacts of such powers.

(2) The report under subsection (1) must include an assessment of—

(a) the extent to which any mandated investment requirements may conflict with the fiduciary duties of trustees and managers of occupational and personal pension schemes;

(b) the potential effects of such requirements on the long-term financial returns of scheme members, including—

(i) risks relating to illiquid or politically directed assets,

(ii) risks to diversification, and

(iii) any expected increase in costs borne by savers;

(c) the risk that mandated investment requirements could lead to politicisation of pension scheme decisions or undermine public confidence in the private pension system;

(d) the adequacy of parliamentary oversight and scrutiny of the exercise of powers to mandate investment allocations, including whether additional safeguards are required;

(e) the question of accountability in circumstances where mandated investments perform below expectations, including whether liability would rest with trustees, fund managers, or the Government;

(f) the potential for market distortion arising from requirements that schemes invest in specific UK-based assets, including the risk of asset inflation or the creation of investment bubbles; and

(g) alternative policy measures that could encourage pension scheme investment in the United Kingdom without the use of mandatory requirements, including the removal of regulatory barriers and the creation of suitable investment opportunities.

(3) The report must include a summary of views received from—

(a) industry bodies representing pension schemes, trustees, and fund managers;

(b) relevant financial regulators; and

(c) any other persons the Secretary of State considers appropriate.

(4) The Secretary of State must publish a response addressing the findings and any recommendations contained in the report.

(5) No regulations requiring pension schemes to meet mandated investment allocations may be made under this Act until the report under subsection (1) has been laid before Parliament and the response under subsection (4) has been published.”

This new clause requires the Secretary of State to review the potential effects of mandated investment powers including on risks to returns, fiduciary duties, market distortion, and accountability before any powers can be exercised.

New clause 28—Pension Protection Fund: members who have not attained normal pension age at assessment date—

“(1) Schedule 7 of the Pensions Act 2004 is amended in accordance with subsections (2) to (7).

(2) In sub-paragraph 3(3), for “the appropriate percentage” substitute “100%”.

(3) Omit sub-paragraph 3(4).

(4) In sub-paragraph 11(3), for “90%” substitute “100%”.

(5) In sub-paragraph 14(3), for “90%” substitute “100%”.

(6) In sub-paragraph 15(3), for “90%” substitute “100%”.

(7) In sub-paragraph 19(3), for “90%” substitute “100%”.

(8) The Secretary of State must by regulations make provision for the retrospective payment of compensation to PPF members, as if the amendments made by this section to Schedule 7 of the Pensions Act 2004 had had effect on the day on which that Schedule came into force.”

This new clause would provide that pension scheme members who have not reached Normal Pension Age by the Pension Protection Fund assessment date receive compensation at a rate of 100% instead of 90%, and provides for retrospective application.

New clause 29—Pension Protection Fund: estimate of cost of increasing compensation for surviving spouses or partners of members—

“(1) The Pension Protection Fund (PPF) must prepare and publish an annual estimate of the cost of increasing the value of compensation paid to surviving spouses or partners of PPF members to a sum equivalent to the value of any payments to which they would have been entitled had the scheme not entered the PPF.

(2) The first assessment under this section must be published before the end of the 2025/26 financial year.”

This new clause would require the Pension Protection fund (PPF) to publish annually an assessment of the costs of increasing compensation to the spouses or partners of PPF members to equal the amount they would have received if the pension scheme had not entered the PPF.

New clause 36—Local Government Pension Scheme: expenses and duties of administering authorities—

“(1) The Secretary of State must by regulations make provision for—

(a) a cap on the management expenses that can be claimed by administering authorities, such that they do not exceed ten basis points of the asset base of the pension fund,

(b) a cap on the investment management expenses that can be claimed by administering authorities, such that they do not exceed five basis points of the asset base of the pension fund,

(c) a cap on the general administrative expenses that can be claimed by administering authorities, such that they do not exceed five basis points of the asset base of the pension fund.

(2) Regulations under this section must also require administering bodies to provide to the Local Government Pension Scheme Advisory Board—

(a) evidence that they have considered and acted on any guidance issued by the Local Government Pension Scheme Advisory Board, and

(b) evidence of the steps that they have taken to comply with their fiduciary duties in respect of pension scheme members and Scheme employers.

(3) In making regulations under this section, the Secretary of State must consult the Local Government Pension Scheme Advisory Board.

(4) In this section—

“administering authorities” has the meaning given by Schedule 1 to the Local Government Pension Scheme Regulations 2013, and

“Scheme employer” has the meaning given by Schedule 1 to the Local Government Pension Scheme Regulations 2013.”

Amendment 1, in clause 1, page 3, line 7, at end insert “, or

(b) secure employee representation on the company’s board.”

This amendment would add employee representation on boards as a requirement on asset pool companies for Local Government Pension Schemes within the scheme regulations under clause 1.

Government amendments 20 and 21.

Amendment 2, in clause 2, page 4, line 7, at end insert—

“(ba) the funds or other assets for which a scheme manager is responsible (other than money needed for making payments under the scheme from the pension fund maintained by that scheme manager) should be invested in a way that is compliant with the UK’s duty not to aid or assist serious breaches of international law, including genocide and other atrocity crimes, and illegal military occupation.”

This amendment would require that investments of the local government pension scheme should be compliant with the UK’s duty not to aid or assist serious breaches of international law.

Amendment 3, page 4, line 7, at end insert—

“(ba) the funds or other assets for which a scheme manager is responsible (other than money needed for making payments under the scheme from the pension fund maintained by that scheme manager) must be divested from any oil and gas companies within 5 years of the passing of this Act.”

This amendment would require that local government pension schemes divest from oil and gas companies within 5 years.

Government amendments 22 and 23.

Amendment 17, in clause 9, page 9, line 25, leave out from “does” to the end of line 25 and insert

“apply to a scheme that is being wound up unless the trustees determine by resolution that it shall not apply.”

This amendment would ensure that the principles for surplus extraction shall also apply to surplus release after further wind-up, so that employers are not incentivised to wind-up funds rather than release surplus to pensioners.

Amendment 18, in clause 10, page 10, line 21, after “notified” insert “and consulted”

This amendment would ensure that members of pension funds have to be consulted on surplus extraction.

Amendment 4, page 10, line 36, at end insert—

“(e) about the proportion of any surplus that may be allocated, or the manner in which it may be determined, for the purpose of contributing to the provision of free, impartial pension advice and guidance services for scheme members.”

This amendment enables a proportion of surplus funds to be used to fund free pension advice.

Amendment 19, page 10, line 36, at end insert—

“(e) that the trustees are satisfied that it is in the interests of the members that the power to pay surplus is exercised in the manner proposed;

(f) that the trustees have taken full account of—

(i) the extent to which members’ pensions have kept up with the cost of living and inflation (as defined in the relevant rules and deeds), and

(ii) any previously rejected requests for discretionary pension increases.”

This amendment would reinstate the current requirement that ensures trustees consent to the paying of surplus as proposed, and creates an obligation on trustees to take account of any erosion in members’ standards of living.

Amendment 5, in clause 11, page 11, line 38, at end insert—

“(aa) make, publish and keep under review the consistency of—

(i) regulated VFM schemes, or

(ii) regulated VFM arrangements,

with the goals of the Paris Agreement on climate change and clean energy;”

This amendment would require pension funds and managers to show whether their portfolio investments are consistent with the Paris Agreement.

Amendment 6, page 11, line 38, at end insert—

“(aa) make, publish and keep under review the compliance of—

(i) regulated VFM schemes, or

(ii) regulated VFM arrangements,

with statutory and regulatory targets for reducing sewage discharges by water and sewerage undertakers,”

This amendment would require pension funds and managers to monitor and report on the compliance of water and sewerage companies they invest in with targets for reducing sewage discharges.

Amendment 7, page 12, line 10, at end insert—

“(d) publish or share with prescribed persons, for the purpose of enabling VFM assessments to be made, prescribed categories of information (referred to as “climate alignment metric data”) regarding the scheme’s exposure to climate-related financial risks and the alignment of its investments with the goals of the Paris Agreement on climate change and clean energy.”

This amendment, with Amendment 5 would require pension funds and managers to show whether their portfolio investments are consistent with the Paris Agreement.

Amendment 8, page 12, line 10, at end insert—

“(d) publish or share with prescribed persons, for the purpose of enabling VFM assessments to be made, prescribed categories of information (referred to as “sewage discharge compliance data”) regarding the scheme’s exposure to, and investment in, companies holding permits to discharge sewage, including those companies’ performance against statutory and regulatory targets for reducing sewage discharges.”

This amendment, with Amendment 6, would require pension funds and managers to monitor and report on the compliance of water and sewerage companies they invest in with targets for reducing sewage discharges.

Amendment 9, page 12, line 41, leave out “that provides money purchase benefits”

This amendment, together with Amendment 10, would ensure that the value for money provisions introduced by this Bill apply to all occupational pension schemes.

Amendment 10, page 13, line 5, at end insert—

“(14) Value for money regulations may make different provision for different descriptions of relevant pension schemes and must make provision for the application of the value for money assessment with a VFM rating to defined benefit occupational pension schemes.”

This amendment, together with Amendment 9, would ensure that the value for money provisions introduced by this Bill apply to all occupational pension schemes.

Amendment 11, in clause 13, page 14, line 13, at end insert—

“(iv) the consistency of the investment portfolio with the goals of the Paris Agreement on climate change and clean energy, including metrics for assessing climate-related financial risks and opportunities;”

This amendment would require pension funds and managers to show whether their portfolio investments are consistent with the Paris Agreement.

Amendment 12, page 14, line 13, at end insert—

“(iv) the compliance of the investment portfolio with statutory and regulatory targets for reducing sewage discharges by water and sewerage undertakers, including metrics for assessing related environmental and financial risks and opportunities;”

This amendment would require pension funds and managers to monitor and report on the performance of water and sewerage companies they invest in against targets for reducing sewage discharges.

Government amendments 24 to 49.

Amendment 16, in clause 40, page 43, line 38, leave out from beginning to end of line 27 on page 46.

This amendment would remove the ability of the Government to set mandatory asset allocation targets for certain pension schemes, specifically requiring investments in UK productive assets such as private equity, private debt, and real estate.

Amendment 15, page 46, line 9, leave out from “Before” to the end of the subsection and insert

“implementing the first set of regulations under subsection (1) the Secretary of State must—

(a) prepare and publish a report regarding—

(i) what barriers pension funds, based in the United Kingdom, are facing that are preventing them from investing back into the United Kingdom due to—

(A) legislation introduced after The Pensions Act 1995;

(B) regulations introduced by the Financial Conduct Authority, Prudential Regulation Authority, HM Treasury, or Bank of England;

(C) cultural and market behaviours;

(ii) how financial interests of members of relevant Master Trusts and group personal pension schemes would be affected by the proposed regulations;

(iii) what effects the proposed measures could be expected to have on economic growth in the United Kingdom;

(iv) any other matters the Secretary of State considers appropriate; and

(b) respond to any recommendations or issues raised in the report.”

This amendment prevents use of the reserved mandation powers in this Bill until the Government produces a report on the reasons why the powers are needed and the effects of the use of the powers and resolves any issues raised in the report.

Amendment 14, page 48, line 15, leave out paragraphs (a) to (c) and insert—

“(a) The scheme in question demonstrates strong potential for growth and an ability to innovate, and”

This amendment would revert the text of section 28F(2) on the eligibility conditions for new entrant pathway relief to its form in the Bill as introduced.

Government amendments 50 to 85.

Amendment 13, in clause 117, page 120, line 19, leave out “2035” and insert “this Parliament”

This amendment provides that if section 40 is not commenced before the end of the current Parliament in respect of the insertion of certain provisions, then the insertion of those provisions would be automatically repealed at that time.

Government amendments 86 to 89. \p Torsten Bell: I start by thanking all hon. Members for their valuable contributions during the Bill’s passage to date. In particular, I thank members of the Public Bill Committee who offered line-by-line scrutiny. They have challenged the Government, but always constructively—that includes the shadow Economic Secretary to the Treasury, the hon. Member for Wyre Forest (Mark Garnier), who is not with us today. That reflects the broad consensus across the House that the Pension Schemes Bill is an important piece of legislation, and it is a consensus for which I am very grateful. The same consensus underpinned the introduction of automatic enrolment under the previous Government.

It is exactly because we as legislators have more than gently nudged people into pension savings that the Bill’s most fundamental job is to drive up returns on those savings. The case for this focus is clear: those retiring in 2050 are currently set to do so with lower private pension income than those retiring today. The Bill also recognises that, with the second largest pension system in the world, pensions matter not just to deliver an income in retirement but for the whole economy as the largest source of domestic capital. With those goals in mind, this Bill builds a solid foundation on which we can build, not least via the Pensions Commission over the next year, exactly as several hon. Members called for on Second Reading.

The vast majority of the amendments tabled by the Government are minor technical amendments, and there are two substantial areas on which I would like to dwell. The first is on pre-1997 indexation within the Pension Protection Fund and the financial assistance scheme.

The PPF is one of the most important legacies of the last Labour Government, but we have all heard about the challenges caused by the lack of indexation of compensation related to pre-1997 pensions. I am grateful for the time that affected pensioners have given me in discussing their experiences directly. I have listened carefully to them and to hon. Members who have kept attention on this issue.

I particularly acknowledge the contribution of my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) and her Work and Pensions Committee, as well as my hon. Friend the Member for Basingstoke (Luke Murphy) and the hon. Member for Aberdeen North (Kirsty Blackman) who raised this matter in  Committee. I am also grateful to the hon. Members for Didcot and Wantage (Olly Glover), for Caerfyrddin (Ann Davies), for Torbay (Steve Darling) and for Belfast South and Mid Down (Claire Hanna), and my hon. Friend the Member for Poole (Neil Duncan-Jordan), for their proposed new clauses and amendments related to this matter. \p Olly Glover: I welcome that the Government have tabled these amendments to strengthen the Pension Protection Fund arrangements. However, that will be of little use to those such as the AEA Technology pension campaigners, about whom I have met the Minister. Despite many Select Committee reports and National Audit Office findings, they were badly advised by past Governments and have not been given a route to redress. I invite the Minister to reconsider his past decision and consider new clause 1. \p Torsten Bell: I do not agree with the premise of the hon. Gentleman’s question, because I think that members of the scheme he mentions will benefit from the improvement in pre-1997 indexation within the PPF, albeit I am sure they would rather not be within the PPF, which applies to most people who have fallen into it. All I would gently say is that the change we are introducing was refused by Liberal Democrat Pension Ministers during the coalition Government, so this is a big step forward and will make a difference to others. \p Sean Woodcock: I am delighted by the Chancellor’s announcement in last week’s Budget, having had decades of Tory Governments dithering and delaying while pensioners lost out. It is a great sign of what this Labour Government are delivering on pensions. Could the Minister confirm how much, or by what amounts, those affected are likely to benefit from the changes he has incorporated into this Bill? \p Torsten Bell: My hon. Friend has been a powerful campaigner on this issue in the run-up to the Budget, and he brings me on to my next point. We are not just listening; we are acting. We have tabled new clauses 31 to 33 and Government amendment 87 to introduce prospective indexation of Pension Protection Fund and financial assistance scheme payments that relate to pensions built up before 6 April 1997. And directly to his question, these will be consumer prices index linked, capped at 2.5% and apply to members whose former schemes provided for such increases. I thank the Pension Protection Fund for its support on this measure and its implementation, which rests with the PPF. \p Al Pinkerton: I have been contacted by many Surrey Heath constituents who often worked for very large American companies such as Atos. These companies are refusing to offer the pre-1997 uplift, and from what I understand, the pensions fall outside both the PPF and the FAS. Can the Minister offer any reassurance to those pensioners today and explain how they can continue to survive on such diminishing returns from the pensions they paid into? \p Torsten Bell: The hon. Gentleman asks an important question, and I shall come to exactly that issue when I finish discussing the changes within the PPF, because as he rightly notes there are wider indexation questions for solvent pension schemes.

On the PPF itself, this issue has been long running and many campaigners have long campaigned on it. Our changes aim to bring the matter to a conclusion. It is a step change that will make a meaningful difference to over 250,000 members. Over five years, the average PPF compensation will be boosted by £400 a year. Of course, I recognise that this does not go as far as some affected members would have wanted, but this change is real progress and rightly balances the interests of eligible members, levy payers, taxpayers and the Pension Protection Fund’s ability to manage future risk. I hope all hon. Members will support this step forward, and on that basis, that those with related amendments will feel content not to press them today.

New clauses 22 and 24 and amendment 19 concern that issue of discretionary increases or pre-1997 indexation in solvent defined-benefit pension schemes more generally. I put on record that we all recognise the impact of the high inflation in recent years on the value of some pensioners’ retirement income in exactly the way that has just been set out.

I want to be straightforward with the House that we do not support retrospectively changing scheme rules. Neither did previous Conservative or Liberal Democrat Governments, given that contribution levels were set on the basis of the scheme rules at the time they applied. As I have said before, and as I discussed recently with my hon. Friends the Members for Llanelli (Dame Nia Griffith) and for Ayr, Carrick and Cumnock (Elaine Stewart), wider changes in the Pension Schemes Bill relating to surplus release will put trustees in the lead in a way that will help on this issue. \p Nia Griffith: The Minister will understand just how sceptical pensioners are because, quite frankly, they have seen their trustees try to make the companies do the right thing time and again. Will he agree to meet me and trustees from companies such as 3M and Hewlett Packard Enterprise to explain what mechanism he thinks will be available to them that will actually force the companies to give a decent, index-linked rise to their pensioners? \p Torsten Bell: Absolutely, is the short answer. I am always very happy to meet my hon. Friend and near constituency neighbour. I will explain how the change may help in that situation, but I am very happy to take that meeting.

The changes give those trustees overseeing schemes without pre-’97 indexation greater leverage in discussions with employers on discretionary increases, should those trustees see fit. I would encourage them to do so.

The other substantial amendments are on the Pension Protection Fund administration levy paid by DB schemes, allowing the Secretary of State to recover the PPF’s administration costs. It also covers the costs of administering the Fraud Compensation Fund. The levy was initially introduced to allow transparency when these administration costs were significant relative to the PPF’s reserves, but this is no longer the case, with the levy standing at around £18.5 million while the PPF manages over £10 billion-worth of reserves. The PPF is now more than able to cover its administration costs, and transparency can be achieved in the normal way  through annual reports and accounts. These amendments therefore abolish the levy, simplifying the pension levy landscape.

I will now briefly cover some minor amendments, starting with those on the local government pension scheme. Amendment 22 exempts the Environment Agency, as a national body, from the requirement on other administering authorities to co-operate with strategic authorities on local investment opportunities.

New clause 34 introduces new wording to clause 4, with amendment 23 deleting the existing wording. Rather than stating in this Bill how procurement law affects the LGPS, new clause 34 will instead move the LGPS exemption directly into schedule 2 to the Procurement Act 2023, future-proofing the exemption from future changes to that Act.

Amendment 28 is the central amendment on small pots. It introduces the concept of a destination proposer. This allows for either a single entity or multiple entities to be designated as the proposer of pot transfers. This reflects recent work by the DWP and Pensions UK to consider a federated model as a potential alternative to a centralised data platform for delivering the small pots policy. I want to add that there is no change to the desired policy intent; this is about the mechanism by which we deliver it. We are committed to exploring both models in full.

Amendments 37 to 53, on the scale clauses, are minor in nature. They include clarifying the circumstances in which schemes may count assets held in other schemes towards the scale condition—the requirement to have at least £25 billion-worth of assets under management by 2030—and clarifying when the transition pathway relief will end. On guided retirements, amendment 54 simply removes a redundant interpretation provision. Government amendments 55 to 86 relate to clauses 100 and 107 of the Bill, on the validity of certain alterations to salary-related contracted-out pension schemes—more often referred to as the Virgin Media case.

Most importantly, Government amendment 59 clarifies the meaning of “qualifying legal proceedings”, specifying that the proceedings have to be before a UK court, concern a dispute about scheme rules, and involve trustees or managers and one or more members or beneficiaries of the scheme or their representatives. I ask hon. Members to support those amendments, all of which go with the grain of the discussion we had in Committee.

Hon. Members have tabled a range of wider amendments. We had the chance to debate many of them in Committee, and I will respond further to them at the end of the debate. However, I thank the hon. Members for Torbay and for Caerfyrddin for new clause 2 and new clause 15 on the British Coal staff superannuation scheme, both of which would require the Government to commission an independent review of the sharing of surplus funds with members. Upon reflection, we do not believe in waiting that long, or that more reviews are necessary. Instead, we are acting now.

The Budget last week confirmed the transfer of the full £2.5 billion-worth of reserves. Implementation is a matter for trustees, but we understand that they have put processes in place so that the first payments will be made on 23 December—just a matter of weeks. The change is the result of the powerful advocacy of so  many of my hon. Friends on the Labour Benches, not least my hon. Friend the Member for Blaenau Gwent and Rhymney (Nick Smith).

While I am on the subject of powerful advocacy, I thank my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) for tabling new clause 17, which seeks to clarify the scope of trustees’ investment duties, which are sometimes referred to as fiduciary duties. This is a long-running debate, and almost everyone involved in it agrees on one fundamental principle: a trustee’s primary duty is to act in the interests of scheme members. Nothing should change or undermine that. His new clause highlights that different trustees continue to take different approaches to interpreting those duties, and in particular in how they take into account structural factors such as climate risk and members’ standards of living when they are making investment decisions. That matter is raised again in a number of the amendments tabled, and we discussed it at some length in Committee.

Having discussed this matter with my right hon. Friend, I agree that more clarity about the ability of trustees to take into account such factors would help. But rather than hardwiring that into primary legislation, there are advantages to consulting more fully and retaining an ability to be responsive to future developments. I can therefore announce today that I intend to bring forward legislation that will allow the Government to develop statutory guidance for the trust-based private pensions sector. The guidance will encapsulate those wider factors set out in his new clause, with the goal being to provide practical support to trustees about how to comply with their existing duties in considering these factors, including what we mean by systemic risks and standards of living. There is good support in the industry for providing that clarity, giving added confidence to trustees that they can invest in the long-term interests of their members and our society. We will set out more details on our guidance plans in due course. \p Steve Darling: Would the Minister be kind enough to share the timescale he is working to for these proposals? \p Torsten Bell: I thank the hon. Member, who was one of the contributors to our debates on this matter in Committee. I hope to bring forward clarity on the next steps in a matter of months. \p Peter Swallow: I thank the Minister for making this important announcement about a consultation on the role of trustees. As part of that consultation, will he keep in mind the important issue of pre-1997 indexation so that we can ensure that trustees are acting in the best interests of their pensioners? \p Torsten Bell: My hon. Friend has discussed this challenge with me many times and is a powerful campaigner for his affected constituents. I give him absolutely that assurance, and I extend to him the same offer I have given to other hon. Friends: I will be happy to meet him and affected constituents, or trustees who have been affected by this issue. \p Julian Lewis: The Minister has indeed been most accessible, and I am extremely grateful to him for the meeting he held with members of the ExxonMobil pensioners group. I am still being  lobbied very hard by ExxonMobil pensioners who are concerned that whereas changes introduced in the Budget will benefit members of the FAS and PPF schemes, private defined-benefit scheme members will not benefit. He knows far more about the subject than I do, but can he not see that there is a feeling that they are being discriminated against? Is there nothing he can offer to make them feel somewhat more included in the beneficial steps being taken for members of other schemes? \p Torsten Bell: I thank the hon. Gentleman for that and for our conversations on this matter in recent months. Although I think it is completely reasonable that people would feel like that—so would many of us if we had seen the high inflation of recent years eat into our non-index-linked pension payments—let me explain the consistency of the Government’s position. We are providing pre-’97 indexation on compensation relating to pensions now held within the PPF to those who were in schemes that did provide for indexation. There is no question of retrospectively changing the entitlement within the schemes; we are simply requiring that the compensation within the PPF and the FAS recognises that the schemes that people were in did previously recognise the need for indexation.

Other schemes within PPF and outside the PPF, including the one that the right hon. Member for New Forest East (Sir Julian Lewis) mentioned, did not provide for indexation in their scheme rules. He is right to say that, on those matters, the changes that I have outlined today on the PPF do not provide relief. I have gone on to say that because of the changes we are bringing forward in the surplus rules, I think the trustees—as was discussed with some of his trustees—do have more ability and more leverage with which to ask for those discretionary increases, but I completely appreciate that that is different in form from the compensation indexation that we are providing within the PPF. \p Julian Lewis: The problem, as the Minister knows from our meeting, is that the trustees are rather hemmed in by not having the leverage or the freedom to act if the company itself—particularly if it is headquartered abroad—is disinclined to pass on any surpluses that it might have available. \p Torsten Bell: I recognise the right hon. Member’s point. I think the level of pessimism may be overstated. My view is that our changes on surplus, which put trustees clearly in the driving seat, provide for more ability for trustees to seek to change that balance of power within their relationship. I do not want to prejudge the individual discussions between all trustees and their employers—those will be different in different circumstances—but trustees are in a stronger position given the changes on surplus release that we are introducing through this Bill. But I am not pretending for a second that that solves overnight the points that the right hon. Member is making. \p Kirsty Blackman: To take us back to the consultation and action to provide guidance for trustees, we all think that is a good thing, as trustees have a difficult job to do and providing them with more guidance is incredibly helpful. On the timeline for the consultation and the legislation arising from it, it would be incredibly helpful if the Minister could, as soon as  possible, provide us with a road map for what that will look like when it returns to the House and, in particular, set out whether it will involve primary or secondary legislation. \p Torsten Bell: The hon. Member brings me back to the part of my speech I was coming to. The direct, quick answer to her question is that I would envisage taking powers in primary legislation and then consulting on the statutory guidance relating to the powers provided to the Government. That is the order in which I would think about it, but, exactly as she has asked for, I will endeavour to provide more clarity on the timeline.

As I said, I think there is good support for such a change across the industry—actually, I heard calls for it long before I became Pensions Minister—and it is time that we get on with setting out more details and providing that clarity to trustees so that, rather than debating whether trustees have the ability to invest with these longer-term structural or systemic factors in mind, they can get on with doing so, if they so wish. I should say that this is about giving trustees that ability and not specifying that they must do so.

I hope I have usefully set the scene for the debate. Let me close my opening remarks by reiterating my thanks to everyone who has engaged with the Bill so far. I look forward to hearing hon. Members’ further contributions this afternoon. \p James Wild: Before speaking to new clauses 24 and 25 and amendments 14, 15 and 16, I shall begin by reiterating the position adopted by my hon. Friend the Member for Wyre Forest (Mark Garnier), the shadow Economic Secretary to the Treasury—he is not here today, as the Minister acknowledged—which is that we support many of the planned changes in the Bill because, fundamentally, we all want a pensions system that is more accessible to the average person and gives all our constituents dignity in retirement. We want to see a Bill that helps make the system work better, and some of its measures will undoubtedly do that.

Equally, the higher-tax Budget, of which the Minister was a controlling mind, is relevant. We know from media reports that he feels passionately about the Budget—he used industrial language that is perhaps more expected from industry than from a think-tanker, and it is certainly not for the Chamber. We also know that, because of the briefings that appeared in the press, hundreds of thousands of people drew down their pensions prematurely, damaging their savings income as a result. The Budget also increases taxes on pension contributions. Taxing people’s incomes, savings and pensions more is the wrong political choice.

There is much in the Bill that we agree with, but some fundamental issues remain. Arguably the most pressing issue is the fact that the Bill does not address pensions adequacy. Research from Pensions UK shows that over 50% of savers will fail to meet the retirement incomes set by the Pensions Commission. The simple, uncomfortable truth is that this will affect millions of people, and that is despite the introduction of auto-enrolment and the triple lock introduced under the last Conservative Government.

The Bill was an opportunity to do more, but it does not currently do so. We are therefore giving the Government another chance through new clause 25, which would require the Secretary of State to conduct a review within five years and to recommend further measures. We recognise that the second phase of the pension review is ongoing, and we have faith in Baroness Drake to lead that review, but we have concerns that it will not report until 2027. We maintain that this part of the pensions review should be fast-tracked, so could the Minister at least clarify in which quarter of 2027 we can expect that report to be published?

Amendment 14 would change the wording on the eligibility conditions for new entrant pathway relief back to the form it was in when the Bill was first introduced. This means that schemes would qualify for relief if they simply demonstrated strong growth potential and an ability to innovate. All of us on these Benches understand the economies of scale and agree on the need for them, but we have concerns about the changes to the eligibility requirements. The benefit of the existing market is that its diversity provides choice, creates competition and incentivises innovation. As it stands, though, the Bill will disadvantage niche or boutique funds. Specifically, if the amendment made in Committee is enacted, existing companies that previously qualified for the pathway will now be excluded.

An example is Penfold, whose workplace pension was launched in 2022 and has grown quickly to over £1 billion of assets under management, tripling the rate since the start of 2024. Even with this trajectory, the timing of the scale test gives insufficient time to reach the £10 billion threshold for the transition pathway. We therefore agree with the chief executive officer of Penfold when he said:

“The original drafting created the scale that everyone agrees is vital, while still leaving room for challengers to innovate without the threat of a hard scale deadline that deters private investment”.

He is right. These are exactly the type of businesses that the Government should be supporting.

I shall turn now to the issue of indexation to pre-1997 pensionable service. We all want pensioners to have dignity in retirement, but when people have done the right thing by putting money in their pension and it is not followed through, that does not give pensioners the dignity they deserve. The issue around the pre-1997 indexation is also time-sensitive, like the infected blood scandal, and the longer the can is kicked down the road, the smaller the problem will become, sadly. We therefore broadly welcome the Minister’s commitment to taking primary powers through Government new clauses 31, 32 and 33. Our new clause 24 was seeking to achieve a similar outcome.

We pay tribute to the lobbying from groups including the Pensions Action Group and the Deprived Pensioners Association. Also, my hon. Friend the shadow Economic Secretary to the Treasury wanted to acknowledge our right hon. Friend the Member for Herne Bay and Sandwich (Sir Roger Gale) for his continued representations on this issue. The Minister has already been pressed by a number of Members about the concerns of organisations, such as the Esso Pensioners Working Group, that want to understand further how the Government will ensure that these groups are not forgotten.

Finally, I want to turn to the part of the Bill with which we have our most fundamental disagreement: namely, the part that deals with mandation. Amendment 15  would prevent the use of the reserve mandation powers until the Government produced a report on the reasons why the powers were needed and the effects of the use of such powers, and resolved any issues raised in that report. It simply asks the Government to undertake an analysis of the barriers that pension funds are facing, rather than rushing to use mandation as perfectly reasonable. Amendment 16 would remove the power altogether.

Let us be in no doubt: this is a bad policy. First, it goes against the fiduciary duty of trustees to act in the best interests of savers. As the Minister has said many times, the most important thing is better returns for members. We agree, so how does forcing pension funds to invest in what the Government want them to invest in guarantee the best return for those members? Governments—particularly, but not uniquely, this one—do not always know best, and they certainly do not know better than the professionals.

Secondly, trustees and fund managers currently bear a legal responsibility to protect and grow these savings. If mandated investments failed, who would be accountable for the losses? Thirdly, this measure risks politicising the process. The role of trustees is to secure the best return for members, not to follow political whims. This is taxpayers’ hard-earned savings, not the Government’s money. The Government have already secured a commitment from industry to invest more into the UK through the Mansion House accord, which we support. We have only to look at comments from the Association of British Insurers, the Pensions Management Institute, Aviva, the Society of Pension Professionals and many others to see that they oppose this mandation power. The industry does not agree with the Government’s approach and neither do we, which is why we voted against these powers in Committee and why we intend to press our amendments to a vote today.

To conclude, there is much agreement on the Bill, but there are important issues still to be addressed, especially around the reserve mandation power. It is fundamentally wrong, and I urge the Minister to listen to the industry and to back our amendments. \p Nia Griffith: I rise to speak to my new clause 22. There is a group of pensioners who have worked hard for very prestigious companies, and those companies have grown rich and successful on the back of the work that those pensioners have done. These are companies with good reputations. People think of them as being honourable and successful. Many of us will have a computer with “HP” on it. Companies such as Hewlett Packard Enterprise, 3M and a number of others that have already been mentioned have treated their pensioners very shabbily indeed, because they are refusing to index-link the pensions of former employees that were accrued before 1997. In other words, people who worked hard to help build up the success of those companies have had no increase for as long as 23 years. Just imagine how much less they can buy with that pension now compared with 23 years ago. The cost of living crisis over the past few years has exacerbated their problems, eroding their pensions at a frightening rate. What is absolutely terrifying for many of those pensioners is how on earth they are going to manage in the next few years.

Through new clause 22, we are asking for the index-linking to take place from now on, not retrospectively for all the years when there have been no increases, nice though that would be. This is not about some form of compensation for the past. It is about going forward and trying to future-proof these pensions so that they at least they maintain the value they have now. It would not be a retrospective measure; it is about how we want the companies to behave from now on in respect of their pension funds, just as any other legislation would apply from now on.

When the employees were recruited to these companies, they would have thought, “Oh, this is a good job. It’s a good company and it’s got a pension scheme.” They would have assumed that any pension scheme worth its salt, particularly from a reputable company, would be index-linked. Sadly, however, these companies have found a loophole in the Pensions Act 1995, because it refers to 1997 as the start date for its provisions. In other words, the companies have been able to say that, according to the letter of the law, they do not have to index-link pensions accrued pre-1997, even though it would be in the spirit of the Act to do so. New clause 22 would amend the Pensions Act 1995 by removing references to 6 April 1997 from section 51 of that Act, thereby requiring annual increases to pension payments in line with CPI and RPI to apply to pensionable service both before and after that date.

Why do we need to legislate? We need to do so because efforts by trustees over many years have failed. We have had instances of unanimous votes by trustees for inflation-based rises being rejected by companies. We have had trustees appointed by companies. Essentially, the power structure is such that the company has the final word, no matter how healthy the pension funds are.

A recent newsletter for 3M pensioners said,

“Given that the Scheme’s financial position is very positive, and the funding level exceeds the regulatory expectations for solvency levels… we had hoped that the Company would permit some discretionary increases to affected members. Sadly, the Company did not agree to this and has not changed its position on the matter.”

Time and again, pensioners have been given that type of answer to a very reasonable, rational request. \p Julian Lewis: May I applaud the hon. Lady’s speech? That is exactly what has happened to so many ExxonMobil pensioners in my constituency and beyond. \p Nia Griffith: Indeed, the right hon. Member mentions yet another world-renowned, multinational, household name.

Our Labour Government have just announced that we will change the law to enable the payment of inflation increases on the pre-1997 pensions to Pension Protection Fund and financial assistance scheme members. That is an important principle. If we are doing it for pensioners whose companies have gone bust, we should ensure that successful multinationals like Hewlett Packard Enterprise and 3M pay up for former employees. \p Alan Gemmell: Will my hon. Friend allow me to put on the record my thanks to my constituent Patricia Kennedy and the pre-1997 pensions justice campaign for asking for exactly what she suggests?  The Minister has taken a brave decision on the Pension Protection Fund pensions, and we should try to do that now for those pre-1997 pensioners. \p Nia Griffith: Indeed. I thank my hon. Friend for mentioning Patricia Kennedy, who has been incredibly hard-working and has really tried to put the facts and figures together.

Let me give the House an example now that I had intended to quote later. The number of companies that have reneged on giving out index-linked pensions is extraordinary. Listen to this list, citing the number of years for which companies have not indexed pensions: Goldman Sachs—10 years; KPMG—15 years; Lloyd’s Register—nine years; Johnson & Johnson—11 years; NCR (Scotland)—11 years; Chevron—13 years, 3M—16 years; Pfizer—16 years; AIG—18 years; American Express—20 years, Atos/Sema—20 years; STMicroelectronics—21 years; Hewlett Packard Enterprise—22 years; and Wood Group—23 years. Given that, we can imagine the loss in value of those pensions now. \p Al Pinkerton: The hon. Lady mentioned Atos. I have several constituents who worked for that company who find themselves in precisely the situation she describes. I thank her for the speech she is making and, on behalf of my constituents, I hope that those on the Front Bench are listening to her suggestions. \p Nia Griffith: As I said, it is an important principle on the PPF; if we are doing it for those pensioners for the companies that have gone bust, we really should be doing it for the successful companies, too. \p Peter Swallow: My hon. Friend is being extremely generous in giving way. Effectively—not legally—the Government act as the trustee for the PPF, which is why they have been able to take this decision. Does she agree that if the Government see fit to use their role to increase PPF pensions, trustees of these companies should act just as the Government have done to address this injustice? \p Nia Griffith: The problem is that many of the trustees are trying to get these increases, but the difficulty they are encountering is that the power structure is such that the company has the last word. Sometimes trustees are actually appointed by the company; sometimes it is a unanimous decision that is then rejected by the company, as I mentioned with the 3M trustees. We see time and again the efforts of trustees totally decimated.

I was interested in what the Minister said in his opening speech about the new powers. What we really want from the Front Bench is some support to help these trustees to use the legislation to which the Minister refers—that is, part of this Bill—and to try to make it work. \p Torsten Bell: Just reflecting on the excellent speech that my hon. Friend is making, I should add that the Pensions Regulator will be bringing forward guidance to provide exactly that kind of clarity to trustees. \p Nia Griffith: I thank the Minister for that, but it is a matter of action and ensuring that it really happens. We are too used to regulators not having the powers they are supposed to have or not being effective in using them. We need some action, and hopefully the Minister will help us to see how it could be done.

There is a bitter irony that the Pension Protection Fund is funded by a levy on the very same companies that are refusing to index-link their own pensioners’ pensions. We know from lots of evidence that the only way the companies will listen is through legislation. These companies are multinationals, and in countries where there is legislation, they pay up—so they do respond if there is a law.

As I was saying, saying that the trustees have the powers is sadly very far removed from the reality. Trustees of various countries have asked repeatedly for indexation, and before handing over any surplus to the companies, they will be very wary because they do not trust them at all. They will want cast-iron guarantees on indexation.

Let us look at the scale of the problem. Seventy-five per cent of UK defined-benefit schemes already provide pre-1997 indexation. The remaining 25% represents approximately 1.5 million members, including some 734,000 pensioners, with 80% of all pensioners concentrated within just 200 large schemes with strong employers. As we have seen, employer discretion has failed in practice, and many pensioners have had years of zero increases.

New clause 22 would set the statutory principle that there should be indexation. The Government can then design proportionate safeguards—for example, phasing in, exemptions and triggers—in order to protect genuinely weak schemes and to ensure, as the Society of Pension Professionals says, that schemes are not pushed into having to be picked up by the Pension Protection Fund.

We want action on this. We are talking about a small, manageable number of schemes, but we want the trustees really to be given the powers to force those companies to make that indexation. If the Minister is not minded to put this provision into the legislation, as we want, we want to see some concerted action and a genuine way forward. If that proves not to work, there needs to be an opportunity to come back and put this into secondary legislation instead. \p Caroline Nokes: I call the Liberal Democrat spokesperson. \p Steve Darling: For people who are lucky in the lottery of life, their pension can be one of their biggest assets, but, sadly, we know that 12 million people across the United Kingdom are not saving enough. That is around the population of Belgium. Talking more broadly, there is much about the legislation to be welcomed. I am sure the Minister had his best birthday ever by spending it in the Bill Committee. I am sure that as a 14-year-old, he dreamed of that day, on Committee corridor—sadly I am not joking. \p Torsten Bell: indicated assent. \p Helen Whately: The Minister is nodding! \p Steve Darling: Thank you for the audio description!

There is much to be welcomed in the Bill, and the way that we rattled through it in Committee demonstrated that there is lots of good within it. However, as a constructive Opposition and a critical friend, I will spend most of my time reflecting on where there could be improvement.

We Liberal Democrats still feel that there are chances to ensure a mid-life MOT on investment opportunities, including five years before retirement. We think that that could be strengthened significantly. I come from an area of sadness in respect of my father, who saw the poverty of his father, a lorry driver, and threw significant amounts of his income into his personal pension just before the 1998 stock market crash. He saw the value of his investment halved. Nobody would expect a lorry driver to understand the full ins and outs of investing in the appropriate manner. It is important to reflect the fact that people live their lives without really understanding financial markets, and further strengthening that part of the Bill would be welcome.

People are keen to see that their investments are doing good, whether by tackling climate change or cleaning up our waterways. We have tabled amendments to address that. The Liberal Democrats welcome the Minister’s announcement of a consultation to drive that forward.

We also welcome the British Coal staff superannuation scheme carve-out announced in the Budget last week. I suggest that the Minister ought to listen to my hon. Friend the Member for Didcot and Wantage (Olly Glover) and other colleagues. My hon. Friend’s new clause 1 relates to the AEA Technology. There is a strong case for that, as the National Audit Office has confirmed. I ask the Minister, with all due respect, to reflect on that and see it as an opportunity for another carve-out. Politics is about remedying such injustices. \p Julian Lewis: I applaud what the hon. Gentleman has said about the AEAT pensioners’ difficulties. It is quite shocking that, despite the fact that a previous Conservative pensions Minister, Paul Maynard, said that he would instruct his civil servants to work on a redress scheme, changes of Minister and Government have meant that the machine has carried on as before, even though a parliamentary Committee did an investigation, found in favour of the pensioners and said that they should get redress. \p Steve Darling: The right hon. Member makes a powerful point. I am sure that the Minister will take note and reflect on it further.

I would like to reflect on the proposals to enhance pre-1997 pensions by up to 2.5%, which the Chancellor announced last week. Amendments providing for those measures have now been tabled. We know that there is significant surplus in the Pension Protection Fund. We question whether it is right for the Government to balance their financial books on the backs of that pension pot. I understand that their argument is that, because those billions are taken into account as far as Government finances are concerned, it is not possible to release as much as could be released from that pot to support pensioners with the cost of living crisis, but I urge Ministers to reflect on that.

Colleagues have also highlighted new clause 22 and pensioners who worked at American Express, Esso and Hewlett Packard. Those companies—strangely enough, it seems to be overseas companies—have left pensioners out in the cold. I hope that that consultation is able to pick up on that and give clear guidance to trustees on how they ought to support those members.

Surplus funds is another area that the Bill addresses. It is about getting the balance right. In winding up, will the Minister reflect on how surplus funds could support members and oil the wheels of the economy? That is important. Pensions should be about driving the economy. They are a big beast that should be an engine for change. In fact, the last area that I will touch on is how pensions should be the engine for change. As colleagues have alluded to, mandation feels a bit like the cold hand of Big Brother on the economy. I trust the Minister implicitly in respect of mandation, when he says, “Honestly, guv, it’s not really something I want to do,” but who knows who will walk in his footsteps? We need only look to the other side of the Atlantic, and at the gentleman in the Oval Office, to see the extraordinary things happening there. \p Sarah Olney: Does my hon. Friend agree that, although it is certainly advantageous to encourage pension funds to invest in the UK, mandation creates the risk of reducing returns on investments? Would it not be better to incentivise pension funds to invest more productively—in housing and social care—through the creation of appropriate investment vehicles, and to encourage investment in British start-ups to allow them to scale up and create an attractive environment for investment? \p Steve Darling: It is almost as if my hon. Friend had just seen the next section of my speech. We see such investment as an opportunity to drive social rented housing, our high streets and other investment in our communities. We need to ensure that UK institutions are the first, second and third investors in opportunities in the UK so that overseas investors see that we are backing ourselves and then pile in after us. That is essential.

We will vote against mandation. There is much to welcome in the Bill, but the devil is in the detail. \p Cameron Thomas: My hon. Friend speaks well about what is good in the Bill, but there is room for improvement. A number of my Gloucestershire constituents were employees of Gulf Oil before its merger with Chevron. Following the merger, they were moved on to the Chevron pension scheme. Between them, they have hundreds of years of service, but they are not protected against inflation, and over years of inflation, the value of their pensions has been eroded significantly. Does my hon. Friend agree that his new clause 7 is a genuine opportunity for pension justice—one that we hope the Labour Government support? \p Steve Darling: I wholeheartedly agree with my hon. Friend. I am sure that the Pensions Minister is listening. Politics is all about calling out injustice, and my hon. Friend does a good job of that for his constituents. \p Neil Duncan-Jordan: I will speak to a number of amendments tabled in my name. I thank the Pensions Minister for discussing them with me yesterday. I look forward to his comments later in the debate.

I spent a number of years as a regional trade union official with responsibility for the local government pension scheme, and I think it is important that we see pensions as a force for social good. My amendments aim therefore to make our occupational pensions more progressive. We should remember that such funds represent the deferred wages of millions of workers, and directing pension funds toward socially beneficial projects is one way in which the Government can rewire our economic model, so that it delivers for ordinary people.

In my view, workers’ money should be invested in sectors such as green technology and social housing—stable, reliable sectors that build a better future for the very people whose contributions fund them. Whether this is done through an expanded National Wealth Fund, which could direct investment into socially useful projects, or some other mechanism, it would clearly boost much-needed growth and GDP. What could be more progressive than using workers’ pension funds to build the council houses we so desperately need? That would be a tremendous step forward which not only ensured a solid investment for the funds, but provided decent homes at affordable rents. I designed new clause 5 to address this issue, and I hope the Minister will do more to encourage schemes to redirect their investments in that way.

Likewise, amendment 3 recognises that the voluntary approach to disinvestment in fossil fuels has not worked. The LGPS currently invests over £16 billion in fossil fuels, while 85% of all pension schemes lack a credible climate action plan. The environmental crisis is the great challenge facing us all. Workers’ wages should not be fuelling the climate catastrophe. Fundamentally, there is no retirement without our environment, and I hope the Government will emphasise that position to trustees more forcefully. We need a commitment from all LGPS schemes and pools to having a five-year plan to end their relationship with these harmful investments.

The overwhelming majority of the public would also be horrified to learn that their savings were invested in illegal wars abroad, such as the genocide in Gaza. We know that over £12 billion of LGPS funds are invested in companies that support the illegal settlements in some way, or produce arms or fuel for fighter jets used in the war. We must ensure that pension funds are not complicit in war crimes and human rights violation, whether in Gaza or elsewhere in the world.

The Minister will have noticed the strong cross-party support for my amendment 2, and I urge him to give a statement in the strongest possible terms that the LGPS should not be involved in funding breaches of international law in any form. I understand that many of the pools have money in tracker funds that are connected to arms companies, but that needs to be challenged. If that means disinvesting from arms manufacturers implicated in these breaches, so be it.

That brings me to the important matter of worker representation. Having a seat at the table is one way in which we can influence how money is invested. That is why it is important that we ensure trade unions have a voice on all future pension boards and committees, as outlined in my amendment 1. There is currently no requirement for worker representation on the boards of LGPS pools; the Government reducing the number of pools to six gives us an ideal opportunity in law to  guarantee proper worker representation. Fundamentally, it is vital that the workers who pay into the funds have a fair voice in decisions on how their money is invested. I hope the Minister will begin talks with local government trade unions to see how we can bring that about.

Last week’s budget announcement on the pre-1997 pension indexation was welcome, and many have already quoted that this afternoon, but only those whose schemes were eligible for indexation and are members of the Pension Protection Fund and financial assistance scheme will see the benefit. Hundreds of thousands of retired workers whose pension funds were taken over by other companies, such as Hewlett Packard in the case of some of my constituents, and are still in operation will not be protected as was intended in the Budget for that other group; and the money they put into their company pensions before 1997 will continue to be frozen. I know the Minister recognises that over this period their pensions have become virtually worthless. That is why the Government must put pressure on trustees of all schemes to pay some of their surplus funds and ensure that their former staff get the pensions they deserve.

The Pension Schemes Bill offers a once-in-a-lifetime opportunity to help the environment and society more generally by the way we invest. The £3 trillion in UK pension funds could be used to address the historical transfer of wealth away from ordinary working people toward the wealthiest individuals and corporations in our society. Given that pensions account for 40% of wealth in this country, change must include consideration of how this vast pool can be used to improve the lives of those whose payslips created it. The call to use our money and make pensions more progressive is therefore overwhelming. I look forward to hearing the Minister set out in the strongest possible terms the commitments the Government are making to bring that about. \p Roger Gale: There is clearly a great deal of good in the Pension Schemes Bill; that is why it went through Committee relatively easily. I do not wish to be a dog in the manger about that, but instead to recognise the good in the Bill. I shall focus on the issues raised in new clauses 22 and 24.

I do not pretend to be expert in these matters, but I do know injustice when I see it. As you know, Madam Deputy Speaker, I fought for many years for the uprating of frozen pensions for ex-pat citizens overseas. That is a shame from which the reputation of this country will take a long time to recover, and I fear that we are about to endorse yet another such shame.

There is absolutely no doubt in most people’s minds that the Pensions Act 1995 was flawed. This issue is an unintended consequence that was not foreseen. That it has taken this long to get to grips with it is wrong, but we now have the opportunity to set things right. The hon. Member for Llanelli (Dame Nia Griffith), in an excellent speech, set out the stall very clearly indeed. I have huge sympathy with her new clause. Were it to be called, I would vote for it without any question.

The right hon. Lady made it very plain—it is indeed very plain—that there is no suggestion that any redress should be retrospective; there is no question of any vast back payments to those whose pensions have been  affected. I listened carefully to what the Minister said about retrospection—by the way, I agree that retrospective legislation normally ends in tears—but the proposed measure is not retrospective in that sense.

We come to how to get this right. It seems to me that the Government’s proposals are hugely complicated—unnecessarily so—and do not actually do the job. New clause 24, tabled by Opposition Front Benchers, who I know have put a lot of effort into trying to get this right, gives a get-out in the form of a lack of surplus, which I believe would enable those companies that have neglected their duties until now to carry on neglecting their duties. For that reason, my personal preference is for new clause 22.

I represent the remains of the Pfizer empire in Sandwich. Not entirely surprisingly, I have therefore a significant number—one is a significant number, by the way—of constituents who were affected by the pre-1997 section in the 1995 Act. I find it quite appalling that companies of size and international importance that have been named today—including Pfizer in my own constituency, which is a good employer—should have put themselves in the position that they are in when in some cases, for up to 25 years, pensioners have not been rewarded in the manner to which I believe them to be entitled. As I say, for my money, Pfizer is an excellent company. It does good work and is a good employer, but somewhere along the line, in the back office—probably in the United States—a decision was taken not to uprate pensions. That is quite simply wrong.

While I understand that the Minister comes to this issue with a reasonably open mind and a good heart, I do not think that his proposal does the job and I am not certain that the Opposition Front-Bench amendment does the job. I believe that new clause 22, in the name of the hon. Member for Llanelli, would do the job. I hope that further and very serious consideration will be given to adopting that resolution. \p Debbie Abrahams: I rise in support of the Government’s new clauses, particularly those that relate to the pre-1997 pensionable service indexation where scheme rules allow. That will mean that pensioners whose pension schemes became insolvent through no fault of their own and that have failed to keep pace with inflation will have that rectified. As I mentioned yesterday in my speech on the Budget, that will benefit more than 250,000 Pension Protection Fund and financial assistance scheme members.

I pay particular credit to the Pension Action Group, the PAG. It was formed in 2003 following the collapse of the Allied Steel and Wire pension scheme, which left thousands of workers without employment or their promised occupational pension. They are not covered by the Pension Protection Fund, which was introduced by the Pensions Act 2004 for members of defined benefit schemes whose employer went bust after 6 April 2005. The Pensions Action Group campaigned first for the financial assistance scheme to be set up for members of schemes that went bust, then for improvements to FAS benefits to bring them into line with those of PPF members.

In the last Parliament, members of the Pensions Action Group gave evidence to the Work and Pensions Committee on the hardship experienced due to the policy of not indexing pre-1997 benefits. As a relatively  new Select Committee Chair, I remember hearing from them at a separate meeting, and it was so moving. Within weeks, unfortunately, different members were dying because of their age. Benefits were not going to their families, and they were not going to have the benefits that we see rightly being given to this group.

FAS members did most of their service before 1997, and most were in schemes that provided for indexation on all members’ pensionable service. Non-indexation of FAS compensation meant that the average award—about £2,700—was progressively lower than the amount expected from the original pension schemes. Terry Monk told the Committee that

“people should get what they paid for—end of story.”

Richard Nicholl said that

“people paid extra effectively, for full indexation…it is only fair that it goes to those who have paid for it.”

I pay credit to the Deprived Pensioners Association, which gave evidence to the Committee about the impact of the non-indexation of pre-1997 on PPF members. Having heard their evidence, the Committee recommended that the Government legislate to allow both compensation schemes, FAS and PPF, to provide indexation on pre-1997 benefits where scheme rules allowed.

I am incredibly grateful to the Pensions Minister for listening and to the Secretary of State for Work and Pensions, who came to the Committee a couple of weeks ago and listened to concerns from members, including the hon. Member for Torbay (Steve Darling). What has happened is right, and I reiterate my thanks. \p Manuela Perteghella: I rise to speak to two new clauses that stand in my name. The first is new clause 3, which concerns the use of the special rules for end of life form to ease the burden on people with a terminal illness seeking support from the Pension Protection Fund or the financial assistance scheme; the second is new clause 19, which deals with fossil fuels and climate risk. Those issues are very different in nature, but they share a common thread: both seek to improve the governance, fairness and long-term resilience of our pension system. I will also speak in support of new clause 11, as it seeks to remedy HSBC’s unjust clawback policy that the Midland Clawback Campaign has been fighting against.

New clause 3 concerns terminal illness and the use of the special rules for end of life form, or SR1. This amendment was born out of the experience of one of my constituents, Nigel. Nigel was diagnosed with incurable stage 4 pancreatic cancer. He told me about the issues he faced in providing several forms, applications and other bits of paper to providers just to demonstrate eligibility and his terminal illness. He told me his story and about the hurdles he encountered following his diagnosis, at what was a very stressful time. \p Jim Shannon: I have been contacted by some Members of the Northern Ireland Assembly about this issue—the thresholds in cases where a death occurs unexpectedly or suddenly, or when an illness comes on very quickly. When the Minister sums up at the end, I hope he will address that issue, for the sake of those Northern Ireland Assembly Members who asked me to raise that very question today. The hon. Lady is right; well done to her for highlighting this issue. \p Manuela Perteghella: I thank the hon. Member for his intervention. When people get terminal illnesses, it is a time full of grief and stress, so new clause 3 aims to address the bureaucratic barriers those people face in accessing compensation or assistance from the Pension Protection Fund or the financial assistance scheme. At a moment when time is precious and stress is already immense, too many people are forced to navigate repeated administrative hurdles simply to demonstrate what another arm of the state has already accepted.

The new clause would require the Secretary of State to set out a clear, fair and straightforward process for demonstrating terminal illness—one that places the least possible administrative burden on the individual. Critically, where the Department for Work and Pensions already holds a valid SR1 form confirming a terminal diagnosis, that form must be shared with the PPF or the FAS; the person should not have to start again from scratch and provide several forms or applications again. Once the necessary information has been received, the PPF and the FAS should be required to make payments within a defined timeframe.

These are not abstract procedural improvements: they would materially affect the quality of the precious time a terminally ill person has left. New clause 3 reflects the explanatory statement’s intent to allow a valid SR1 form to serve as sufficient proof of terminal illness for these purposes, reducing duplication and speeding up support. It is a modest, humane and pragmatic change, and I hope the Minister will consider it in his concluding remarks.

I turn now to new clause 19, which deals with fossil fuels and climate risk. The new clause would require the Secretary of State to make regulations that would require specific schemes to exit investments in firms that are significantly exposed to thermal coal, and thereafter to review whether that restriction should extend to oil and gas expansion. This is a financial risk measure as much as it is a climate one. Despite the welcome climate reporting requirements in the Pension Schemes Act 2021, schemes remain heavily invested in the most damaging fossil fuels. These investments are doubly harmful. They risk becoming stranded as technology and policy move on, and they depress returns across the rest of the portfolio by contributing to climate damage that ultimately, as we have already heard, drags down the entire global economy.

The amendment would provide a measured, proportionate and financially rational way to divest. It does not force an immediate blanket divestment from all fossil fuels. It allows for staged action following consultation, subject to parliamentary approval and grounded firmly in the fiduciary duty set out in the 2021 Act to secure effective governance of climate-related risks. \p Edward Morello: I thank my hon. Friend for speaking to this important new clause, which relates to the fundamental fact that pensions are about planning for the future, and climate change is about making sure that we have a future for all. Having pension funds supporting anything that undermines the outlook for future generations should be prevented in any which way we can. I just wanted to lend my support to her wonderful amendment. \p Manuela Perteghella: I thank my hon. Friend for his important intervention. New clause 19 would not create a precedent for ministerial direction of investments more broadly, if that is an issue. In fact, it would be much narrower than the Government’s own proposed reserve power. Existing measures cannot substitute for action now. Large schemes remain invested in the most dangerous fossil fuels, and the Government have not yet even consulted on transition plan requirements for pension schemes, meaning that enforcement is unlikely before the end of this decade.

I urge the Minister to acknowledge that transition plans alone are too little, too late, and we must address pension fund climate risks this decade. New clause 19 would provide a route to do so responsibly and effectively. Taken together, these two new clauses—one addressing long-term systemic financial risk and the other addressing immediate human need—would make our pension system more responsible, more resilient and more compassionate. I hope the Minister will consider them both in that spirit.

Finally, I will speak in support of new clause 11, which would introduce an independent review into state deduction in defined benefit pension schemes. That is necessary because Midland bank’s—now HSBC—outdated clawback policy has misled 51,000 former employees and deprived them of the pensions they were promised. This policy, which was abandoned by most organisations in the 1980s, allows HSBC still to deduct the value of an employee’s state pension using a 77-year-old formula, with payslips disguising it as “state deduction”. It hits the lowest-paid staff hardest and disproportionately affects women. For the same reason of long-standing injustice, I also support all the new clauses and amendments in relation to the indexation of pre-1997 benefits. In conclusion, this Bill is a chance to make pensions fairer, greener and more ethical and to put some of this historic injustice right. \p Liam Byrne: I begin by congratulating the Minister on bringing the Bill forward to this stage. He has been one of the country’s practical idealists since I first began working with him in 2008, and he is demonstrating those credentials once again in stewarding this Bill through the House today with such expertise and intelligence. He, like me, has long been concerned not only by the endemically low investment rates in this country—now languishing at the lowest in the G7—but that we should build up a system of universal basic capital, so that the wealth we create in this country is more fairly shared.

I rise to speak to clause 17, which is in my name, and I give enormous thanks to the 33 Members from all parts of the House who have added their names to it. That depth of cross-party support tells us something important: that here in this House is broad and deep support for the principles enshrined in the new clause. There is a shared belief across this House that working people should be able to use their savings to build a richer and stronger country in which to retire.

My new clause calls for something very simple. It calls for something that has been missing for far too long. As we know, pension fund trustees have fiduciary duties to the people they represent and the people they serve, but those duties need clarity, and for too long that clarity has been missing. What we have instead is confusion,  and from that confusion comes a caution, and from that caution comes a world in which pension scheme providers are simply not investing what they could and what they should in the productive assets of our country.

The flight of British savings from investment here has long bedevilled the country. It is a sight to behold. We are not short of savings, but we are desperately short of investment. We have somehow magicked a situation in which we have £3 trillion-worth of long-term savings, but we have the lowest investment rate in the G7. I think the Bill will help to turn that around. I think it will help to break that curse. There is much in it that is welcome: the consolidation of funds, the consolidation of pots, the simplification of structures, and a stronger framework for long-term investment. For all its virtues, however, as it is drafted today we are still left with the core problem, and unless we solve that core problem, the Bill’s noble ambitions will be defeated by its notable omissions. We risk creating bigger and better-managed funds that still fail to invest in our country, and still fail to invest in our country’s future.

The Bill will fail to channel the investment that we need in affordable homes, in net-zero investments, in cleaner power systems, in affordable transport systems, in the social care that we all need for the future, in regeneration, and in the national infrastructure of growth. It will fail because it fails, as currently drafted, to clarify exactly what it is that pension fund trustees can consider. We want those trustees to have the freedom to invest in good things here, not out of some patriotic flourish but because it is plainly in members’ best interests. When national investment grows, our national productivity rises, and when pension pots get bigger, they will get bigger faster if we have a country that is more productive and growing faster than it is today. When a country grows, the returns that shape retirement grow with it.

Many scheme providers today simply do not feel that they have the permission to make those investments. They are unsure of the law. They fear litigation. They worry about the possibility that looking at system-level risks, from low productivity or high housing costs or climate stress, might fall outside their legal remit. This is where the problem lies. It is a paradox that I think we can no longer ignore. We ask trustees to act in members’ best interests, yet the law today is so unclear that many of them feel unable to invest in the very things that could secure the long-term interests of their members: growth, productivity, and the living standards on which those members will one day rely. Today’s rules were built to ensure prudence, but what they are doing is creating paralysis. A framework that was meant to safeguard the future is, in practice, preventing pension savers from shaping that future. Scheme providers want to do more, members expect them to do more and our country needs them to do more, but all that can only happen if Parliament now provides the clarity that the courts have not provided.

This is not an academic matter. At a recent conference, fewer than one in five practitioners said that fiduciary duty was “completely clear”. I believe that 31 industry leaders have now written to the Minister for Pensions to request that legal clarification, including a dozen chief executives. Publicly, the chief executive of Nest, the provider of the UK’s largest defined-contribution scheme, has said much the same.

Fiduciary duty dates back to case law that is centuries old, back to a 19th-century brick factory in Pontefract and, before that, the inheritance of a market lease at some point in 1726. I am afraid that these cases simply cannot answer the questions that trustees must answer today, and they cannot help with the challenges that trustees face today: globalised portfolios, system-wide risks, intergenerational impacts, and the real-world living standards of their members. That is why the spirit of new clause 17 is so important, modest though it is. It does not alter the statutory purpose of pension schemes, and it does not ask a single saver to accept lower returns. What it does is cut through the confusion and allow the Government to produce regulations and guidance that spell out clearly and consistently what trustees must consider, and what they may consider, when making investment decisions.

I warmly welcome the Minister’s commitment to introduce new legislation. I hope that if he gets his skates on, he can table an amendment in the other place once the Bill moves from our precious hands, but mere guidance is not enough, because sometimes it can be ignored. Guidance does not eliminate liability risk and does not give trustees a solid statutory floor, so I urge the Minister to ensure that the legislation he brings forward delivers guidance that is statutory in its bite. I urge him to go big, by pairing guidance with underpinning regulation that gives trustees legal clarity; to go broad, by ensuring that every single kind of scheme falls within the ambit of the legislation; and to be specific, by explaining precisely what those powers can be used for and the way in which they can be allowed to ensure productive investment. That clarity, if we get it right, could avoid the need to resort to the mandating powers that some Members of this House have objected to. It could unlock investment by giving schemes confidence to act, rather than making them fearful and hesitant.

We in this House have a profound duty to ensure that the maximum amount of pension savings in this country not only yield a return to give comfort to savers in their golden years, but do a double duty: they should help to provide the productive investment that we need to build a bigger and richer country. After all, a nation that invests is a nation that builds, and a nation that builds is a nation that will grow its pension pots to help ensure that pension savers enjoy their golden years in comfort.

The steps that we have heard from the Minister go some distance towards helping us deliver on the spirit of new clause 17. I am very grateful to him for his announcement today, which could unlock billions of pounds for affordable homes, clean energy and comfort in retirement for millions of the people we came to this House to serve. \p Ann Davies: I thank the Minister for his opening remarks this afternoon. The Bill has provided an opportunity for the Labour UK Government to address long-standing pension injustices. Such injustices include the British Coal staff superannuation scheme scandal, whereby surplus sharing arrangements saw billions of pounds heading to the Treasury while former mineworkers’ pensions were eroded, and the lack of indexation for pre-1997 pension accruals under the financial assistance scheme and the Pension Protection Fund, which has caused hardship for pensioners. Addressing such scandals is exactly what my new clauses 2 and 6 set out to do.

New clause 2 would require the Secretary of State to set out a timetable for transferring the whole of the BCSSS investment reserve to members, and to commit to a review on how future surplus will be shared. The coal mining legacy of south Wales extends to my constituency of Caerfyrddin, with the Amman and Gwendraeth valleys bearing the scars of previous industry, so it is of no surprise that my constituents were among those whose funds had been withheld, causing immense hardship for pensioners who had paid into the system for decades. In fact, it affected over 180 residents in my constituency, 20 of whom came to a drop-in earlier this year to share their stories of how this long-running issue has affected their lives.

When the hon. Member for Aberdeen North (Kirsty Blackman) kindly moved new clause 2 on my behalf in Committee, the Minister’s answer gave some hope for long-awaited action. I therefore welcome the recent confirmation that the UK Government have finally listened and have implemented the transfer of the full £2.3 billion reserve to trustees. I pay tribute to my constituents for their hard work, and to former mineworkers everywhere for their long-fought campaign to make this day a reality. On behalf of 180 of my constituents, I thank the Minister.

Former Allied Steel and Wire workers have also campaigned tirelessly to receive their rightful dues in retirement. When the company went bust in 2002, ASW employees lost not only their livelihoods, but the pensions they had worked hard for, and which they were relying on for security later in life. The financial assistance scheme and the Pension Protection Fund were introduced to provide some relief to pensioners in such a situation, but pension contributions made before April 1997 were not inflation-proofed, leaving pensioners without the secure retirement that they were promised.

In Committee, I put forward two amendments to extend the indexation of compensation under FAS and the PPF to cover both pre-1997 and post-1997 service, and to reimburse members for the annual increases they should rightly have received. After the Minister for Pensions responded that the amendments could not work, I went back to the drawing board—we never give up in Wales, do we?—and sought advice to address his concerns. New clause 6, which is the result of that advice, would require the Secretary of State to make regulations to provide for that indexation.

I welcome the recently announced action by the UK Government to finally start addressing this injustice, but limiting pre-1997 indexation to a 2.5% cap for those whose schemes originally offered it simply does not go far enough. I would add that, as of earlier this afternoon, I have still not received an answer to my written question asking how many FAS and PPF members will not benefit from the Government’s measure because of this caveat. I would welcome a response, I hope within the next few days.

The UK Government should instead adopt my new clause 6, which provides no cap on inflation, includes reimbursements to make good losses and specifies its application to transferee members, ill health payments and payments to surviving dependants. Affected pensioners  must be at the heart of action to address the pension injustices that they have faced for so long. I urge the UK Government to listen to the continued concerns and to make the necessary changes to deliver real justice. For former ASW workers, that means providing full pre and post-1997 indexation—and backdated, please. \p Scott Arthur: I thank the Minister for introducing the debate. I want to speak in support of Government new clauses 31 to 33, and in the context of new clause 22. Before I do so, let me say that I think it is really good that today’s debate has brought people together after four days of debate on the Budget. There seems to be a lot of agreement today, which is good. In particular, we are agreeing on the pre-1997 measures that were announced in the Budget last week. Nobody mentioned them much in their speeches over the past few days, but today we are all talking about them, which I think is really good.

I warmly welcome the Government’s confirmation in the Budget that we will legislate to allow the Pension Protection Fund and the financial assistance scheme to provide some inflation protection for pre-1997 pensions. This is an issue I have campaigned on, alongside Members from across the House, and I am genuinely pleased to see concrete progress included in the new amendments to the Pension Schemes Bill before the House. I thank the Minister for meeting me in the Treasury in the week running up to the Budget, and for drawing the Chancellor into that discussion. We had our picture taken in the Chancellor’ office, and one of my constituents spotted that there was a mouse trap, which shows that the Treasury hangs on to even the crumbs, as well as to the pounds and pennies.

For years, more than a quarter of a million PPF and FAS members have seen a significant part of their pension frozen—left to lose value year after year—and last week’s announcement begins to right that wrong. It matters deeply for people in Scotland. More than 26,000 pensioners will be helped by this change, which is 26,000 former workers in manufacturing, retail, hospitality and countless other industries. Having spoken to many constituents in this position, I know that many of them have felt forgotten. This reform sends a message that they have not been forgotten, and also that they have been listened to, which I think is even more important.

This decision is important not only for what it delivers, but for what it signals. By acting, the Government have effectively acknowledged that the lack of pre-1997 indexation was an injustice. By recognising that injustice in the public system, I feel that the Government have established an expectation that the private sector must also look at this matter.

The private sector requires encouragement in this area, as a number of companies—primarily under US ownership, in my assessment—are not currently providing regular discretionary increases on pre-1997 pension payments. Many of my constituents, pensioners who used to work for the likes of ExxonMobil—it has been mentioned a few times—and Johnson & Johnson, have told me of sponsoring companies taking a 10-year funding holiday from pension payments into the fund, while simultaneously blocking the indexation in payments. I take the view that the money in the funds belongs to the pensioners and that the funds themselves have a  responsibility to move that money from the funds into pensioners’ pockets—and hopefully into the tills of local businesses in my constituency.

The Pensions Regulator itself notes that 17% of pre-1997 pensioners receive no inflation protection, not because of actuarial need but because scheme rules enable companies to do so. For a long time this was an academic matter because inflation was so low, but over the past five years it has eaten some pensions alive, and affected pensioners in Edinburgh South West are now really feeling it. I hope very much that the private pension schemes that do not already provide significant indexation to pre-1997 pensions but have the financial capacity to do so—many do—will see the signal from the Government’s changes to the PPF and the FAS schemes and improve their own schemes for the benefit of those pensioners. I have some slight concerns about the Bill, in that it might not go far enough in forcing them to make those improvements, but I have great faith in the Minister’s negotiating powers.

It is hoped that the surplus release enabled by the Bill will help to underpin additional corporate investment in the UK, but there is a risk that in cases such as ExxonMobil it may simply enable such companies to move the money in those funds outside the UK and into the bank balances of shareholders in other countries. That money really does belong in pensioners’ bank accounts, but there is a credible argument for also using it to invest in the UK. It does not seem like a good outcome for that money to be lost to our economy.

That can be avoided by addressing the issues of trustee governance. Some trustees undoubtedly act in the interest of scheme beneficiaries, but scheme rules do not always allow it and contrary guidance from the Pensions Regulator may be non-binding. Additionally, trustee boards often lack independence, particularly when we see a majority or even all members have been appointed by the employer—perhaps a conflict of interest. Mindful of that, I commend the Minister for announcing that his Department will consult on trust-based pension scheme governance, strengthening the member voice and supporting lay trustees working closely with the Pensions Regulator to ensure that trustees act in the interests of all beneficiaries, and comply with the law and their scheme rules. Again, the money belongs to those beneficiaries.

I have high hopes for the review, as we need significant reform if we are to secure meaningful protection for these pensioners. The urgency is clear: many of these individuals and their spouses are of an advanced age—I hope none of them hears me say that and thinks it is an insult—and we need to act quickly if they are to benefit. Addressing this injustice requires not only technical improvements in governance and trusteeship, but the political will to act. I am proud that this Labour Government are stepping up to act and looking at this issue in detail. We saw progress last week in the Budget and there is a commitment to do more.

Before I end, I want to touch on two slightly aligned issues. First, we have spoken a lot, across the House, about people who have pre-1997 private pensions and we worry that those pensions are not enough to support them. Each week, in Oxgangs in my constituency, I go to a community meal where I meet people who do not have any private pension. They survive on the state pension, often in quite difficult circumstances. When we talk about poor pensioners, it is right that we think  about pre-1997 and others with private pensions who are struggling, but we should never forget who is really feeling the cost of living crisis.

Secondly, I have to thank my union, the University and College Union, for the work it has done over many years to protect my pension. I know I will benefit from that. Hardly a month goes by without me getting an email from it saying that there is some risk to pensions in a university somewhere in the UK. I commend it for its work. \p Kirsty Blackman: I appreciate the chance to speak in this debate, especially without time limits—it is lovely. I absolutely love a very technical debate in the Chamber, but unfortunately not enough Members do. It would have been nice to see huge numbers delighted to talk about the technical aspects of legislation, but being a veteran of previous Finance Bills, I am aware that there is not often a huge turnout for these debates.

I am thankful for—but have a few criticisms of—the Government’s position throughout the Bill. I will start with a couple of issues around timing. It is appreciated that the changes are being made. The hon. Member for Edinburgh South West (Dr Arthur) mentioned the Budget debates, and I mentioned in my speech then how delighted I was that the change had been made, and how great it was that pre-1997 indexation would be taking place.

However, when I made my speech last Thursday, we had not yet seen the Government amendments. I was aware that there would be Government amendments, because it had been announced, but we did not have the opportunity to properly scrutinise them, or to consider whether those amendments should be amended, because of the timeline of when the details were provided. I appreciate that the Minister tabled the amendments in advance of the deadline, which is great, but there are questions that I potentially would have asked, and I may have tabled some probing amendments, if I had seen those Government amendments in advance.

On the 1997 indexation, I apologise that on Thursday, when I was talking about this, I mentioned the FSA instead of the FAS—I apologise to the Food Standards Agency; I did not mean anything by it. If I do that again, I apologise. In terms of the PPF and the FAS, the PPF got in touch with me last week, and I had a good meeting with it about what the indexation will look like and how many members would potentially be impacted. It suggested that it was getting in touch with 165,000 members, which I thought was a very significant number, with an impressively fast turnaround in the time it was looking to reach out to them. Those are significant numbers, and I appreciate that.

However, I am concerned that the uplift does not involve a one-off payment in order to bring the pre-1997 contributions up to some sort of level. The contributions were made pre-1997, so the compound interest on that would be unbelievable—it would be very significant. If there is no one-off payment to be made, and no recognition of the fact that the indexation has not taken place, then we are looking at adding 2.5% a year on to a tenner—or whatever—instead of 2.5% every year up until now, which would be a significantly different sum.

I appreciate that the change has been made, and I also appreciate that the PPF levy is still going to have the potential to reduce to zero. The PPF’s plans are still  intended to go ahead, and it is still able to meet its financial obligations, even with the changes that have been proposed by the Government. However, I would appreciate it if the Government considered the possibility of a small one-off addition to the pre-1997 accrual that members have, in order to bring them closer to what the pension should have been if they had had that indexation previously.

Older pensioners are the group affected, some of whom are very unwell. As was mentioned by the Chair of the Work and Pensions Committee, the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), a number of them are no longer with us. The Chair also mentioned Terry Monk, who has been in regular contact with me via email, and I thank him and all of the members who have fought so hard for this change. They have achieved something, although I expect they will probably go on fighting for more. I can understand that and I will be happy to back them in the search for more justice.

On some of the other issues that have been brought up in this debate, around the fiduciary duties, the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) and I probably have a similar idea of what “best interests” looks like, what the words “best interests” mean, and what the interests of scheme members are. Some of the ideas that he was talking about around investments are ideas that I would fully align with.

However, we can all define best interests in different ways. The shadow spokesperson, the hon. Member for North West Norfolk (James Wild), talked about the fact that fiduciary duties mean having to get the best returns—he said something like that—but it is not the best returns, but the best interests. Some people may define best interests as best returns, but some people may not. Some might define best interests as better transport systems for the majority of the scheme beneficiaries who live in a certain area, for example; if there were a more efficient transport system, more housing and better schools and hospitals, that would significantly benefit those members in that area. \p Liam Byrne: The hon. Lady is absolutely right. Many members would say that they wanted their investments to help to create a more equal country—a less unequal country—not least because we now know from the work of the OECD and the International Monetary Fund that more unequal countries grow more slowly. \p Kirsty Blackman: Absolutely. Productivity and growth are real possibilities if there is better patient capital investment, not just in social housing and renewable energy projects, which I would dearly love to see and have spoken a lot about—in particular social housing—but in tech and appliances, so that companies can use capital investment that is invested for the long term. That could have a significant impact on productivity.

Turning back to the Minister’s announcement around fiduciary duties and that definition, although there will of course be political argument about what best interests mean and how we define best interests,  trustees will at least have the benefit of the guidance and will not necessarily labour under the misapprehension that they have to get the best possible financial return.

I draw the Government’s attention to the Well-being of Future Generations Act 2015 in Wales, which I talk about a lot, and which is about making the best decisions for the future. It is not necessarily about chasing economic growth at any cost; it is not necessarily about building certain things. Instead, it is about ensuring that future generations are best provided for. Some of the lessons that could be learned from that could be put into the fiduciary duties consultation that is coming forward about what the term best interests actually means and how it could be defined.

We have largely covered the mandation powers and their direction in the discussion of fiduciary duties. I am pretty relaxed about there being some mandation and some requirement, not least because of the points the right hon. Member for Birmingham Hodge Hill and Solihull North made about the growth in the economy that is likely to occur should capital be invested more in things that will increase productivity. There probably is a balance to be struck between benefiting pensioners of today and the future; if there is a lower return for pensioners 30 years in the future, we might again be causing a level of generational unfairness that we need to think about. How does that balance up? Does that new hospital or that new social housing provide enough of a benefit for those younger people, who will become pensioners in 30 or 40 years? Does that stack up? I do not think that will be an easy decision to make.

However, generally I think we can look at mandation; I do not take an ideological position against it like some with Conservative beliefs. I am, though, happy to support the Conservatives in their amendment that would require a report on what those mandation powers look like, because the more transparency from the Government—the more transparency from everybody in this place, frankly—the better. I therefore think a report on that would be absolutely grand.

I will mention a couple of other things. New clause 3 about terminal illness is a really neat solution to a problem. My local authority has implemented a “Tell us once” policy, whereby if someone has had a bereavement in their family, for instance, they have only to tell their distressing story to the local authority once and everything will be changed—their council tax and benefits—and they will no longer get various charges. I therefore think the solution proposed in new clause 3 is neat.

The Minister might come up with some issues around potential data sharing between the PPF and the DWP. However, if he could come up with a solution so that people do not have to tell their distressing story numerous times—having to explain again to somebody else that they are terminally ill and having to provide a huge amount of paperwork to do that when they have already had to do that with the DWP—that would be hugely helpful.

My understanding from my conversation with the PPF on Friday is that it is pretty good at supporting members, and I felt that it would be willing to be flexible about this should it get direction from the Minister and should the data-sharing issues be sorted out, but I am just guessing—I am not putting words in  the PPF’s mouth. I just feel that it is a very member-focused organisation and might be quite keen to support its members in that regard. \p Scott Arthur: This is a very slight aside, but is it not interesting that, when it comes to claiming benefits, there are so many silos and barriers to organisations, councils, Government agencies and Departments talking to each other, but they suddenly start speaking to each other and the benefits are stopped overnight when someone passes away? \p Kirsty Blackman: I would like to see much more conversation. Gateway benefits allow people eligibility for other things, and sometimes those do not work either. A person might be eligible for universal credit, but they do not necessarily get the follow-through to free school meals, for example. Anything we can do to make that path smoother, either in the cessation of benefits or in agreement on eligibility, would be really helpful. I agree with the hon. Gentleman; we have seen issues with carers, for example, being chased for overpayments that were not their fault.

Again, I support the Government’s move on the consolidation of small pots, which I think is incredibly sensible. I am famously a massive supporter of the pensions dashboard and have never been at all critical of its timelines, but when it comes online there will be a rush for consolidation anyway. This is all about consolidation for people who have not touched their small pots, and making sure they get a return from that is totally sensible.

Guided retirement and the mid-life MOT are mentioned in a number of amendments, and ensuring that people are given the correct advice at the correct time is incredibly important. When the Government do their sufficiency review—when we are looking at the adequacy of pensions and what people will get when they hit retirement—I would be very surprised if that and the consultation do not conclude that more people need more advice earlier. The more advice that people have on their pension, and the more money they put into their pension at the earliest time, the bigger their pension will be.

I have already mentioned compound interest: if we put £100 into our pension when we were 21, it will be significantly bigger by the time we retire than if we put £100 into our pension when we are 40. That is just a fact. The more advice that we can give people at various important life stages, but particularly significantly before retirement, would be really helpful. That is another thing that should be included.

Finally, the hon. Member for Boston and Skegness (Richard Tice) spoke at a press conference about the local government pension scheme and how terrible it is that it is spending so much money on fees. That was in September, after Second Reading, at which he did not speak about that. He did not table any amendments on it before the Committee stage, and he has not shown up to raise it on Report. It is almost as if Reform MPs are saying things in press conferences and not doing any actual work. [Interruption.] I told him I was going to mention him. It is almost as if they make statements in press conferences and do not do anything, just as they have not shown up today.

Should a Reform Member have been particularly keen to make changes to the LGPS—such as to cap the level of fees it can pay, which are probably not unreasonable,  as the LGPS is phenomenally successful in its returns for members—they could have amended the Bill, but they would have had to show up to do so. I suggest that the media organisations who are happy to cover press conferences ask the Members giving those press conferences what they will actually do to get their policies implemented. If such Members have an opportunity, they should use it rather than just shouting from the sidelines.

As I think I have made clear, I am largely supportive of an awful lot of things in the Bill, the direction of travel and many of the technical measures, which are great fun to have a good look at. I have some concerns about pre-1997 indexation. I am delighted that it has happened, but more could have been done. I will be interested to follow the progress of the fiduciary duty statutory guidance and the sufficiency and adequacy review and whether there will be mandation powers.

Lastly, on new clause 3, can we please make it easier for members who are terminally ill to have that conversation? I would very much appreciate the Minister committing to taking that away and considering how the PPF and FAS can get that information more easily without requiring people to jump through significant hoops. \p Jayne Kirkham: I welcome the real progress made on the pre-1997 fund. I do not have as much specific technical knowledge as most hon. Members in the Chamber, and I was not on the Bill Committee, but I have looked at the amendments and would like to comment on them, as I was lucky enough to chair a local government pension scheme committee—I think it was very well run—and sit on a pool oversight board. I will use that experience as an example.

Our LGPS in Cornwall was a good example of responsible investment and good practice in the sector. The Bill will consolidate LGPS funds into six pools from eight on the basis that that will be effective in achieving scale and diversification of assets and cost savings. Brunel—the pool that Cornwall is in—is not to go forward. Forming Brunel was costly and, as I said on Second Reading, the Cornwall fund was due to break even following the forming of that pool only this year. The costs involved in moving to another fund are expected to be high, which concerns me, as that may impact members, though we hope those costs will be recouped by investment growth as a result of the consolidation.

Being in a bigger pool did enable funds to invest in local infrastructure such as housing, transport and clean energy. Cornwall was good at that: we used our £2.3 billion—not a huge fund when we think of the size of many of these pools—to invest in affordable rental housing near Camborne, where 67 new homes were built on a brownfield site. I am looking forward to seeing the infrastructure projects that further consolidation will make possible.

On Second Reading, I raised concerns that moving to larger funds may affect local links. Brunel is a strong south-west pool and, although it covers as far up as Oxford, we have managed within that pool to be effective on a local level.

The Environment Agency—I noted the amendment on that—was part of our pool, and it did have slightly different rules, which was tricky and somewhat impacted  on our pool. I am pleased that the scheme managers will now have a duty to co-operate with strategic authorities, as the inability to do that often led to perhaps unintended consequences. In social housing, for example, we may have been looking at investments that were the same as the local authority’s. It would make sense to be able to talk about such investments so that we are not doing silly things like competing against each other.

In Cornwall, we had a strong responsible investment policy, and our carbon-neutral date was earlier than the rest of the pool by five years. We were able to maintain those policies and our environmental, social and governance focus by having a strong presence on the oversight board, which enabled us to influence the pool and be a bit different within it. I hope that will continue so that pools do not end up following the lowest common denominator when it comes to things like social impact, investment and ESG matters, but instead will be raised up to the highest level. In our local fund, we had employers and employees on our pension committee, and that worked well. The union reps and the employers gave some very valuable input, and I think that would be valuable for the larger pools as well.

Our local social impact fund was, in the end, 7.5% of our investments. We could channel our investment into rented housing and local renewables in Cornwall, as well as more widely around the UK, and I hope that local government pension schemes will still be able to set their own local investment targets in that way, even when working with local authorities.

I welcome the new guidance on fiduciary duties. The trustees need that confidence, because they can be uncertain about what they can and cannot invest in, and they are nervous about that. When I chaired the committee, we wanted to ensure that our local impact portfolio enabled us to combine our fiduciary responsibilities to our members with delivering positive social and environmental change in Cornwall, where we were and where our members lived and worked, but that uncertainty produced concern at times.

To conclude, I really support the Bill and its aims. The Cornwall pension fund benefited from its initial consolidation into the pool by being able to invest in local infrastructure, and we made responsible investment one of our top priorities; I believe that has continued since I stepped down as chair. There are issues to do with consolidation and growth that I would like the Minister to look at, and I look forward to hearing his response. \p Vikki Slade: I welcome the overall thrust of the Bill. Measures such as the pension pot consolidations are long overdue and will make a real difference to savers, particularly small savers. Every new year, I try to tidy up the numerous tiny pensions from jobs I had in my 20s and 30s, but the pots are so small that the cost of a financial planner and the exit fees would wipe them out, so this reform is great news for consumers who have been on low incomes and have moved from job to job. I urge the Government to go further by lifting the threshold. After all, a pension pot of £10,000 will generate a payback of only around  £50 a month, which is barely enough to cover a basic weekly shop. The Bill goes in the right direction, but it does not go far enough or move fast enough. I am concerned that it leaves groups of pensioners who did the right thing by saving for the future considerably out of pocket.

Like others in the Chamber, I welcome the long-overdue decision to provide some indexation for pre-1997 pensions in the PPF and FAS, but let us be clear: this is not full justice. These pensioners have endured decades without inflation protection, and a CPI increase capped at 2.5% starting in two years’ time, at a time when the cost of living has soared, is still going to leave people struggling. They expected fairness and parity with post-1997 benefits, but what they have received is a compromise that falls short of restoring their full dignity and security in retirement. I call on Ministers to support the calls of many people, including the hon. Member for Llanelli (Dame Nia Griffith), to ensure that pensioners outside the PPF and the FAS are fully supported.

The case of AEA Technology pensioners is a long-running injustice that I have been dealing with since my first days in this place. Employees, who were often nuclear scientists and safety engineers, were promised pensions “no less favourable” than the civil service scheme, and many worked at the Winfrith atomic energy establishment, just outside my constituency in Dorset. I have met and talked to a number of them, including Peter, Phil, Sally and Michael, as well as Jonathan, who wrote to me saying that

“nearly 20% of AEAT pensioners have died since the campaign started in 2012, including my colleague and campaigner Derek Whitmell. This has echoes of the Post Office and infected blood scandals. Delay by the Government is simply unacceptable…this is now in sharp focus for me with Derek’s passing”.

Those pensioners trusted the promise that the Government gave them at the time, yet after AEAT collapsed, their pensions were cut by almost half, with inflation protection stripped away. Today, the fund holds far in excess of what is needed to restore their pensions in full, yet thousands of them remain short-changed.

I recognise the changes in the pre-1997 pensions announced last week, but they are woefully inadequate. That is not just unfair; it is a breach of trust. New clause 1, tabled by my hon. Friend the Member for Didcot and Wantage (Olly Glover), calls for an independent review so that we can finally deliver justice for those pensioners, just as the Government have started to deliver justice on many other historical scandals, which I welcome. This is one of those scandals.

I turn to another. While the Government’s intention to allow surplus sharing of defined benefit schemes is welcome, the Bill as drafted leaves pensioners exposed. UK DB schemes hold an estimated £222 billion in surplus, yet 88% of those funds have failed to use those surpluses to restore pensions eroded by inflation. Companies such as BP transfer the assets to insurers in bulk annuity deals worth £50 billion annually, while pensioners see their living standards fall.

My amendments 17, 18 and 19 seek to put fairness at the heart of the process. Amendment 17 would ensure that surplus sharing principles applied even when schemes were wound up. Amendment 18 would require consultation with members before the surplus was extracted, and amendment 19 would reinstate trustee consent and  oblige trustees to consider whether pensions had kept pace with inflation and past requests for discretionary increases. \p Alistair Carmichael: I have several BP pensioners, with BP obviously having operated the Sullom Voe terminal in Shetland for many years. The injustice they suffered, which left them with a pension worth about 11% less than it should have been because of the decisions of the trustee in 2021 and 2022, showed the inadequacy of the control and independence of the trustee in relation to the company. Does my hon. Friend agree that that requires urgent attention? \p Vikki Slade: I thank my right hon. Friend for his intervention—he has stolen my next line.

John, who works at the BP depot at Wytch Farm, which is the largest onshore oil site in England in Poole harbour, told me that his pension has been eroded by 11%—he probably got the same letter as my right hon. Friend’s constituents. Even modest requests for discretionary increases made by the trustees have been refused by the parent company. Those discretionary increases were affordable; they would not have required any additional funds from the company. Another of my constituents, Suzie, who sits on the steering group, told me that the issue affects 56,000 pensioners from BP alone, but the change—a small one—would support pensioners from many other companies.

I will end by talking to new clause 3, tabled by my hon. Friend the Member for Stratford-on-Avon (Manuela Perteghella). I do so in memory of my mum Lin Foster, who died before she could access her pensions, and in support of my constituent Judith, who came to see me about her sister Alison, who died after receiving a terminal brain tumour diagnosis. Alison found that the paperwork required to access her lump sum meant that she would have to articulate and confront her impending death—something that she simply could not do on top of everything else. It meant that, as a result, she missed out on funds that could have made her last few months more bearable, as well as on potentially accessing treatments that might have given her a bit more time with her family. This simple clause would have allowed her medical team to make that declaration on her behalf via an SR1 and to reduce the administration for all concerned.

The Bill goes a long way in improving the lives of pensioners, but for the pensioners who are missing out, small changes could make a huge difference. I urge Ministers to think about the impact they could have on lives by little tweaks that will not cost the Government anything, or very much, at all. \p Peter Swallow: Can I say at the outset how much I have enjoyed the debate? I particularly want to highlight the contributions of my hon. Friend the Member for Llanelli (Dame Nia Griffith), who powerfully raised some of the issues that I will go on to address, and—purely because I enjoyed the fiscal geekery—the contribution from the hon. Member for Aberdeen North (Kirsty Blackman), who rivals the Minister himself in her enthusiasm for financial issues. What a delight it was to experience that.

I welcome the opportunity to speak on this Bill, which touches on several issues close to my constituents in Bracknell Forest. It is also worth acknowledging the  strong action that the Chancellor took in the Budget to support all pensioners by raising the state pension by up to £550. That is possible only thanks to Labour’s steadfast commitment to the triple lock on pensions. That is real action on pensioner poverty, at a time when the Conservatives and Reform have flirted with scrapping the triple lock.

Similarly, the Bill delivers real benefits to private pension savers across the country by simplifying and streamlining the system. The measures will increase their returns—around 3,300,000 workers on defined contribution schemes in the south-east alone stand to benefit by about £29,000 more for their retirement—while helping to unlock around £50 billion of investment in the UK economy. Hon. Members need only follow the Minister on Twitter to see why it is so important that we increase investment in the UK economy after many years of under-investment by the previous Government.

I thank the Minister for the work to get the Bill to this stage. I welcome in particular the measures providing for action on an issue close to the hearts of many in Bracknell Forest: the slow erosion of pre-1997 defined benefit pensions. It is for that reason that I will focus on new clause 22, which calls for the indexation of pre-1997 pensions. I sympathise deeply with the spirit of the new clause. The erosion of those pensions is an injustice—one that urgently needs addressing. It is important to say that not all pre-1997 schemes are in surplus. Although I agree that that is not the fault of their members, legislating to index would put entire schemes at risk, and I believe that that is not a risk that any sensible Government would take. However, it is vital that the Bill marks the beginning of further action to bring justice to those with pre-1997 defined benefit pensions whose schemes are now in generous surplus.

I was delighted when the Chancellor announced at the Budget statement that members of the Pension Protection Fund will have their accruals protected from inflation, ending years of degradation. That has been carried through in amendments before us. I welcome the recognition in principle that those with pre-1997 pensions are indeed facing an injustice, and that action must be taken to rectify it. I have met many constituents who were formerly employed by HP and later HPE, which used to be based in Bracknell. They are now members of the HPE pension scheme, and have seen their returns decimated. I have spoken with other pensioners in other schemes, too—many of which have been mentioned by others Members across the House. It is not right that people who have worked hard and paid into their pensions now face ever-diminishing life savings through no fault of their own, despite many schemes, including HPE, having significant reserves.

One of my constituents, Ed, began drawing from his pension nine years ago. In that time, his pension has increased only three times, by three separate percentage increments: 3%, 1%, and 1%. He says that, had his pension risen in line with inflation, he would have seen his pension increase by around 38% over the years to 2025. As a result—this is the real-life impact—he has seen a dramatic fall in his living standards. Ed is not alone. Constituents in Bracknell and across the country should not have to fight any more to make themselves heard and achieve justice.

This is an opportune moment to do what we can to put that right. In the Bill, the Government are reforming the use of surpluses, rightly strengthening the hands of  trustees to act, as the Government themselves have done for the PPF scheme, for which they effectively act as the trustee—they are leading by example. I thank the Chancellor and the Pensions Minister for meeting me to discuss that before the Budget. The Minister has been clear on his expectations of trustees following the passage of the Bill, including in his contribution today, and I thank him for his comments, specifically on strengthening guidance for trustees.

Today must be the beginning, not the end, of the story. I have written to the trustees of the HPE scheme urging them to use the powers in this Bill to right the wrong.

I wanted to take this opportunity to call once more on the trustees of the HPE scheme, and other schemes similarly in surplus, to do everything in their power to ensure that pre-1997 pensions are protected from inflation, and I wanted to do so on the Floor of this House because I think it important that we are as clear as possible that trustees will be given the powers they need to act and should follow through with concrete action to protect pensions. That is the right thing to do, and with the powers the Government are granting in the Bill, it is now in their hands to do it. \p John Milne: I shall speak to new clauses 8 and 13, which stand in my name, among others.

With its title, the Pensions Schemes Bill, this piece of legislation was probably never destined to grab headlines—sorry, Minister, but that is the case—which is a pity, because it contains some genuinely intelligent measures, developed over years with significant cross-party support, and could go some way to boosting UK plc, as we all want. Directing more of our pension fund savings into UK investments is a long-overdue mission; however, it is not just about what you do, but how you do it, and as I argued in Committee, I am not convinced the Government have struck the right balance with their plan to take sweeping powers of mandation. Yes, we should be concerned about very low pension fund investment into the UK, but the reason behind that is not some form of trustee treason; rather, it is a logical and predictable response to the UK’s regulatory framework and a market that over-emphasises costs, which discourages any kind of active management strategy.

Mandation is the wrong solution. There are other ways to reach the same outcome through partnership, building on the consensus achieved in the Mansion House accord. I strongly urge the Government to look again at creating more ready-made investment vehicles. The biggest risk in mandation is that it could force pension funds to make sub-optimal investments, because they are chasing the same limited supply of UK assets as everyone else.

In addition to more support for innovation and start-ups, like others who have spoken today, I see a fantastic opportunity for large-scale investment in social housing, care homes, high streets, environmental schemes and infrastructure. That would bring huge social rewards, as well as boosting growth, which is the Government’s mission. That will not happen, though, unless the  Government help local and regional authorities to pump prime the system with a stream of investable products. To me, that seems like a small ask, and I hope the Government will reconsider.

I am pleased by Ministers’ positive response to some of the amendments we fought for in Committee. That does not always happen. The scandalous treatment of pre-1997 pension savings has been left unresolved for decades, so I welcome this Government being the first to act and their decision to link compensation payments from the PPF and FAS to CPI inflation. Of course, this is far from a complete solution, and indexation applies only going forward, but given that until now there had been no sign of compensation of any kind or of any group, I will take this as a partial win. I pay tribute to persistence of all my Horsham constituents who have raised pre-’97 indexation with me time and again.

Compensation by the PPF is certainly a solution, but we are in danger of missing a one-off opportunity to access pension surpluses. The Bill will give trustees increased access to surplus savings, which have built up in many funds in recent years, which is good, but without some sort of extra push from the Government, it seems to me likely that none or little of the money will go toward pre-1997 pension injustices. In the Work and Pensions Committee last week, I asked the Secretary of State whether he truly believed that the Bill as it stands would help people, and I got a “Yes, Minister” kind of answer:

“I am not going to call stumps on brand new legislation before it has had a chance to have an effect, so let’s see what effect it has.”

That is not good enough. The companies that have not been shamed into action in a quarter of a century are not miraculously going to discover altruism today. Some form of compulsion is required.

I hope that the pre-1997 section will be taken further in the Lords, where the balance of power gives the Liberal Democrats somewhat more leverage than we had in Committee. [Interruption.] It is a wonderful institution—so democratic, is it not? I also welcome the decision to abolish the Pension Protection Fund levy, which had become effectively redundant; that was the subject of another Lib Dem amendment. That move will reduce hidden fees for pension schemes and pass those savings directly to savers.

However, other things are still missing. As someone with a professional background in pensions communications, I argued in Committee for the Government to enable free universal pension guidance at the age of 40, among other stages, when there is still time to change outcomes, rather than waiting all the way to the moment of retirement itself. There is a ticking time bomb of pension inadequacy that must be addressed today, and pensions guidance is an incredibly low-cost way to improve outcomes. The Pension Wise service would be an excellent vehicle for that, and it is ready and waiting for us to use it. If the Government will not back new clause 8, will the Minister meet with me and members of industry to look at how an auto-enrolment trial could finally move this proposal forward?

That brings me to new clause 13, tabled by myself and my hon. Friend the Member for Torbay (Steve Darling), which seeks to strengthen the people-focused elements of the Bill by using pensions services to offer free, accessible guidance to the groups we know are  under-saving. If we look at minority ethnic savers, we see that their pension pots average £52,000—less than half of the £115,000 that applies to white British savers. Let us also consider that women are on average set to retire on just £13,000 a year, compared with £19,000 for men—a third less. Disabled workers are approaching retirement with average pension savings of £47,980—just a third of the UK average. The Government rightly say that they want people to be independent, financially resilient and able to pay their own way, but that cannot happen if entire groups—women, ethnic minorities and disabled people—are destined to retire on a fraction of what others are provided with.

There is a lot to like in this Bill, but legislative opportunities come up only once in a blue moon, and a lot more could be done here. I ask the Government to support new clauses 8 and 13. \p Elaine Stewart: I rise to speak to new clause 22. Let me begin by recognising the work of the Hewlett Packard Pension Association, particularly the work of Patricia Kennedy from Ayrshire—she hoped to be in the Gallery today, but she was too ill to travel. Patricia has been a driving force to keep this issue alive, but of course this is not about only one individual; it is about all pre-1997 pensioners.

Earlier this year, I was proud to host Patricia and many of her fellow campaigners in Parliament. That meeting made clear the human cost of inaction—pensioners seeing their incomes erode for decades, and families struggling because the system has failed them. That is why new clause 22 matters. At its heart, the new clause sets a simple principle: pensions earned before 1997 should not be left to wither away. It also follows a principle that the Government have already adopted.

I welcome the Minister’s commitment in his opening remarks to work with trustees to ensure that schemes in surplus, such as Hewlett Packard Enterprise, work to benefit pensioners. If good co-operation is not forthcoming, will the Government look to other legislative means to correct this course? Many of these schemes are backed by profitable multinationals, yet discretion has failed. It has failed with Wood Group, Hewlett Packard Enterprise, STMicroelectronics, Atos/Sema, American Express, AIG, Pfizer, 3M, Chevron, NCR Scotland, Lloyd’s Register, and Johnson & Johnson.

Some pensioners have gone for 10, 15 or 23 years without a single increase. That is not fairness. NC22 would correct that. I am sure all Labour Members agree that pensioners should not depend on the whims of employers, and we should be wary of accidentally creating an entrenched situation in which pensioners in failed schemes receive protection while those in solvent schemes remain unprotected—to me, that seems inconsistent. New clause 22 would address that inconsistency, ensuring that every pensioner has the security and dignity they deserve, regardless of when their service was accrued. I thank the Minister for meeting me to talk over my worries about this Bill. \p Susan Murray: I start by thanking my hon. Friends the Members for Torbay (Steve Darling) and for Mid Dorset and North Poole (Vikki Slade), who have clearly devoted a lot of time and care to scrutinising the Bill—along with others, of course—and tabling constructive amendments.

As we have heard, the UK pensions market is currently worth around £3 trillion—a staggering sum. The right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) has already highlighted the opportunity for national investing, as well as to improve the quality of life for pension holders. For too many people, though, the rules and regulations that determine what they will receive in retirement are opaque—as anyone who has worked through the Bill will know—and often deeply confusing. That is why I welcome the Liberal Democrat proposals to introduce a simple traffic light system, which will help people to understand their scheme and how well their pension is performing.

However, understanding is only one part of the picture; people must also be confident that their pension is being managed legally and ethically. I therefore welcome the amendment tabled by the hon. Member for Poole (Neil Duncan-Jordan), which would ensure that British pension funds are compliant with the UK’s duty not to aid or assist serious breaches of international law. After the horror we have witnessed in Gaza over the past two years, and judging by the strength of feeling expressed both by my constituents and by Members across this House, I believe that safeguard would be warmly welcomed.

Like other Members, I cannot speak in this debate without raising the topic of pre-1997 pensions. \p Peter Swallow: I apologise for interrupting the hon. Lady just as she is getting on to a point that, as she knows, I care deeply about, but I wanted to tease out a point about ethical investment. What I am struggling with is that her Front-Bench spokesperson, the hon. Member for Torbay (Steve Darling), has spoken against mandation, but the hon. Lady has talked passionately about the need to ensure ethical investment. Will she address the fact that there is a conflict here? I am deeply sympathetic to both viewpoints and understand both of them, but I also recognise that there is a conflict. We either have a system in which pension schemes are given clear guidance about where they should invest and what they should invest in, or we do not; we cannot have both. Will the hon. Lady address that conflict and come down on one side of the fence or the other, not—if I may very gently say so—do the Lib Dem thing of sitting on that fence too much? \p Susan Murray: I appreciate the hon. Gentleman’s point, but the important thing is that there is clear guidance for pension funds to make sure we do not assist breaches of international law. I think that would make things very clear, and quite easy for pension funds to understand and implement.

My constituency of Mid Dunbartonshire has many pensioners who are reliant on schemes that do not provide annual indexation. That is why I was pleased to add my name to Liberal Democrat new clause 7, which takes a nuanced and responsible approach. It calls for an assessment of the position faced by pre-1997 pensioners, and of options to address the reality that their pensions have effectively been frozen for many years. As the hon. Member for Ayr, Carrick and Cumnock (Elaine Stewart) mentioned, when schemes that are in surplus are able to ensure that pension holders have a better quality of life, we should fully support as many of them as possible.

Ultimately, this is about fairness and openness in our system. Pension schemes hold an almost unimaginable amount of money and are among the  most powerful financial actors in our economy, which could help to reduce the inequity in our communities. They are too large and too complex for any individual saver or campaign group to challenge alone, and it therefore falls to us in this House to ensure that schemes operate fairly, ethically and transparently, and that the people who contribute to them and rely on them can retire with dignity and confidence. \p Clive Jones: My constituent David worked for 3M for 31 years, 23 of them pre-1997. His pension payment for service prior to 1997 has not increased since 2008, since when it has lost 40% of its purchasing power. Other constituents have lost more. Another constituent worked for ExxonMobil, which he says gave him written documentation that he would receive annual increases at 80% of RPI. However, since legislation changed in 1995, that has not happened. Those are just two of the 40-plus constituents who have contacted me about the injustice experienced by pensioners whose pension schemes are failing to provide an inflation increase on their service prior to 1997. I know that many more across the country face the same injustice. Their stories are deeply troubling. Rather than enjoying a well-earned retirement, pensioners are left struggling to keep pace with the cost of living, often while their pension scheme is in surplus. \p Helen Maguire: I have a similar constituency case with a similar example of discretionary increases. Those were 80% of RPI, but in 2023 that was reduced to half. That has left my constituent, among others, unable to afford their bills and their home. Although I am pleased to see the pre-1997 pension indexation in the Budget for PPF and FAS members, I remain concerned for constituents such as mine. Does my hon. Friend agree that there needs to be a plan for those impacted by a sudden decrease in inflation payments? \p Clive Jones: I absolutely agree with my hon. Friend. There needs to be some sort of plan, and sooner rather than later.

The Government appear to recognise the injustice and are proposing to use surplus funds in the PPF to provide inflation increases on some pre-1997 pensions. Why are we not seeking to resolve the same issue for company defined-benefit pension schemes? Many of these pension schemes have a funding surplus but choose not to use it to support their former employees, despite often being asked to do so by trustees who are ignored by foreign-based employers. Surely that cannot be right.

Research by the Pensions Regulator has revealed that even among schemes whose rules allow for discretionary benefits, less than a third had provided those benefits in the previous three years. Employer discretion has failed in practice and will continue to fail unless Parliament acts. The Pension Schemes Bill fails to address this issue.

Only by amending the original legislation can we ensure fairness for those with pre-1997 service. The Society of Pension Professionals argues that legislation on pre-1997 benefits is unnecessary, but the evidence is clear: discretion, more often than not, is exercised to the detriment of pensioners. As I have said, trustees lack  the authority to act and pensioners are left behind. The problem appears to be concentrated in a small number of large companies. They were meant to provide long-term financial security for their employees. We must remember that all defined-benefit schemes paid levies into the PPF, creating a surplus that now funds indexation. If pensioners in the PPF deserve protection, so do those in live schemes who helped build the surplus in those schemes.

The Government have taken the first step by restoring indexation for some. They must now take the logical next step by extending inflation protection to all pre-1997 pensioners in live schemes. I believe that pre-1997 pension service should receive inflation protection on the same statutory basis as post-1997 service. This is about fairness, dignity and justice for those who worked hard, paid into schemes, were made promises, and now deserve security in retirement. Pensioners affected by this injustice live in every constituency, and they deserve the support of this House of Commons and the Government. Our constituents affected by these injustices simply ask for fairness, and hopefully the Minister will make sure that it happens soon. \p Ayoub Khan: I hope to devote a large portion of my speech to new clause 36, which stands in my name, but let me first swiftly acknowledge the new clauses tabled by the hon. Member for Poole (Neil Duncan-Jordan), the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), the hon. Member for Stratford-on-Avon (Manuela Perteghella) and the hon. Member for Llanelli (Dame Nia Griffith).

While pension fund managers should no doubt ensure that they deliver sufficient returns to their clients, they must also reflect on the duties that they have not only to those who make contributions, but to society at large. That means not using public money to prop up industries that rail against our primary objectives, be they preventing violations of human rights, upholding our commitment to net zero or delivering unfettered justice for those who have been wronged, as in the case of those whose pension contributions made before 1997 have not risen with inflation. I wholeheartedly align myself with the hon. Member for Mid Dunbartonshire (Susan Murray) on the need for ethical parameters.

In tabling new clause 36, I hoped to bring a focus to the practices relating to pension funds that fall under the local government pension scheme—those that make provision for the employees of schools, universities, local authorities and police forces, to name just a few. Those pension fund managers preside over £390 billion in assets, under the management of members of the investment banking sector. Given that much, if not all, of the funding that flows from our schools, councils and the like comes from taxpayers’ money, we have a right to ensure that none of it is being put to waste. I regret to report, however, that these local government pension funds are heading for an absolute embarrassment of riches. While public money sits idle in a vault, lining the pockets of the investment bankers who manage the funds, we are experiencing deep funding crises in our schools, our universities and our local councils.

Year after year, since the moment when these pension funds were established, we have seen the same tactics deployed by those who preside over them. Councils,  schools and others end up putting too much of their budgets towards employer contributions, leaving them with less money to spend on the things that matter, while obscene amounts of money are left to be used as a lucrative plaything for the investment banking sector.

When calculating the money that councils, schools and the like must pay into their employees’ pensions, the pension fund managers first estimate the annual rate of return that they expect to get from their assets. To do that, they enlist the work of an actuary firm—usually one of the “big four”—which takes into account market conditions and various risk factors in order to come up with a figure. The work of these actuaries is incredibly precise, yet every year they end up drastically underestimating the amount by which the local government pension funds will grow over the next year. Why? Because the local pension boards set the assumptions and parameters on the basis of which they make such calculations, often with the intention of overstating elements that may hit the fund’s assets, such as market volatility and uncertainty. From there, by default, they then skim a substantial percentage off the fund’s assets, usually about 0.5%. While that may not seem a lot, given that, for example, West Midlands Pension Fund holds £21.2 billion-worth of assets, it means that at least £1 billion is being scraped off the top every year.

When a highly conservative estimate for growth is combined with lofty management expenses, the result is one thing, and one thing only: our councils, schools and key institutions end up putting more than they need into the banking sector, under the guise of securing their employees a comfortable retirement. Then, once they get to the end of the year and have mysteriously exceeded their artificially conservative projections for growth, the pension fund managers are left with an even bigger pot of money, from which they take their mandatory percentage fee.

It is this repeated cycle of grossly inflating the contributions of our state institutions that is resulting in more and more taxpayer money being used not to fix our crumbling public services that benefit society as a whole, but for city bankers to make big bets on the market and make profits. It is the equivalent of pension funds setting the rules of the game, marking their own homework and keeping the proceeds for themselves, rather than refunding those who put into the system. It has got to the point that even the LGPS Scheme Advisory Board, which advises local pension boards, has said that they need to stop overcharging their clients and underestimating their growth. Unfortunately, however, all the power lies in the hands of the Secretary of State to make the changes that would put much-needed investment back into our schools, councils and the like.

I will give an example. Research by David Bailey, of the University of Birmingham, and John Clancy, of Birmingham City University, has shown that Birmingham city council has handed over £1.2 billion in employer contributions to the West Midlands Pension Fund in the past 10 years. By 2022 the council was being asked to pay an extra 37% on top of its standard bill, whereas the nine other core city councils in the UK were asked to pay an average of around 17%. Birmingham city council is calculated to have overpaid the West Midlands Pension Fund by roughly £547 million. In 2023 the  council declared section 114 bankruptcy, and this year it has approved council tax rises of 21% and £300 million in cuts to vital services.

Hypothetically, had that payment never been made, Birmingham city council would have needed neither to declare bankruptcy, nor to approve budget cuts that reduced its offer to bare-bones skeleton services. The implications that clamping down on the excesses of local pension boards would have for local councils, schools and universities, and for the British taxpayer, are truly incomprehensible, yet as things stand we are shying away from rebalancing the books and from deploying as much of the Government’s investment into public services as we can.

That leads me to my new clause 36, which would put a cap on the investment expenses that can be claimed on LGPS pension funds. In the case of the West Midlands Pension Fund, the management expenses that are charged amount to an increase of four percentage points in employer contributions. Because the fund charges 60 basis points in management fees, Birmingham council tax payers are paying £13.4 million to the investment managers, which works out at £50 on every band D council tax payer’s bill. However, if new clause 36 were to be put in place, only £3.30 would be charged to every council tax payer’s bill. In the same period, the pension fund has consistently failed to report where the investment management expenses that it charges go, and whom they benefit.

As I say, my new clause 36 would implement a cap on the fees that investment bankers can take from pension funds. While that would certainly mark a great step forward in ensuring that excessive wealth gets put into the hands of the private sector, we must also do more to ensure that our schools and councils pay no more in employer contributions than they must, so that they can put more investment into things that really matter—whether that is local government funding for adult social care or for schoolchildren with special education needs, or being able to put more teaching staff in our classrooms. \p Torsten Bell: With the leave of the House, I will respond to as many of the points raised as I can manage.

I thank hon. Members for their speeches today. They have shown not only the depth of knowledge in this House, but the breadth of pensions issues that matter to all of us and to our constituents. I start by thanking those who have welcomed some of the changes that we have introduced and set out today. My hon. Friends the Members for Oldham East and Saddleworth (Debbie Abrahams) and for Edinburgh South West (Dr Arthur) spoke about the PPF, and I appreciate their remarks. On the changes we have set out on the statutory guidance for trustees, the speech by my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) is much appreciated, as is that from the hon. Member for Aberdeen North (Kirsty Blackman). \p Claire Hanna: Like others, I was delighted to see in the Budget the pre-1997 indexing. The Minister will know that that softens but does not correct a wrong, and it leaves tens of thousands of former employees of Harland & Wolff and Visteon, including my constituents, without indexation. New clauses 28 and 29, in my name, would address that, and I hope the Minister might be able to incorporate them in the future. \p Torsten Bell: I thank my hon. Friend for her intervention. I covered that extensively in my opening remarks.

I want to mention two points raised in the debate. The hon. Member for North West Norfolk (James Wild) asked about the timeline for the Pensions Commission. I can assure him that nothing is going slowly, so the final report will be delivered in early 2027, which is significantly quicker than the last one in the 2000s. I will update the House as soon as I have more to say on that front. The hon. Member for Caerfyrddin (Ann Davies) asked how many people will benefit from the change to the PPF indexation and how many will not benefit. The answer is that 250,000 members will benefit and 90,000 will not benefit, because their schemes did not provide for indexation in the scheme rules in the first place. I hope that answers the question she raised.

I will focus the remainder of my remarks on issues that I did not have a chance to touch on in my opening speech, although I would add that I have heard the powerful speeches of hon. Members—including those of my hon. Friends the Members for Bracknell (Peter Swallow) and for Ayr, Carrick and Cumnock (Elaine Stewart) and the hon. Member for Wokingham (Clive Jones)—that took us back to the issue of pre-1997 indexation. I hope trustees will have heard the powerful case they have all made.

I thank my hon. Friend the Member for Poole (Neil Duncan-Jordan) for his comments and amendments on the local government pension scheme. Amendment 1 rightly focuses us all on ensuring that members’ voices are heard as part of the LGPS governance arrangements. There are already well-established routes at the level of the administering authorities, and that continues to be important, because that is where the crucial investment strategies will be set. He raised pools, and I commit to discussing that further with the Minister for Local Government and Homelessness, and monitoring in more detail what is happening as those organisations go through a significant period of change.

Amendments 2 and 3 and new clause 4 relate to what the LGPS should or should not invest in. As hon. Members will all be aware, the Government’s general position is that investment strategies are set locally by each pension fund. Importantly, that includes decisions on how environmental, social and governance issues are to be taken into account. I encourage LGPS authorities to take such matters incredibly seriously, as my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham) did from her own experience. \p Neil Duncan-Jordan: I want to press the Minister slightly more on the need for UK pension funds not to invest in companies that could be guilty of war crimes and breaking international law. Would he like to reflect on that? \p Torsten Bell: Specifically on the question of having regard to international law, I emphasise that compliance extends far beyond the LGPS, and it obviously reaches right across Government. That said, the LGPS, as a public sector scheme, has particularly high expectations on responsible investment, and I have heard the points my hon. Friend has made.

The hon. Members for Torbay (Steve Darling), for Horsham (John Milne) and for Stratford-on-Avon (Manuela Perteghella) broadened this debate beyond the LGPS, not least on questions of climate change and the wider social impact of investments. The Department for Work and Pensions is currently conducting a review of the task force on climate-related financial disclosures requirements, and we have also asked the Pensions Regulator to assess the practicalities of transition plans for pension schemes. As I mentioned in my opening remarks, we will also bring forward legislation to clarify that trustees can take systemic factors into account when making their investment decisions. I hope this provides hon. Members with significant reassurance on those points.

The hon. Members for North West Norfolk and for Torbay returned to the issue, which we discussed extensively in Committee and on Second Reading, on the limited reserve or backstop asset allocation power. As I have repeatedly made it clear to this House, we do not currently anticipate it will need to be used. That is precisely because of the industry’s commitment to the Mansion House accord and wider support from the pension industry for greater investment in private assets.

I welcome the recognition of the importance of the pipeline of projects by the hon. Member for Horsham, and I encourage him to make sure that no Liberal Democrat anywhere opposes construction projects—I have seen the leaflets—be they for energy, roads, housing or anything else.

A crucial point was raised in Committee about the importance of monitoring these commitments, and I can confirm that since then the ABI and Pensions UK have committed that they will work together to track progress. I hope that helps answer some of the questions raised in Committee.

The proposals to add to the matters on which the Government must report are, I believe, unnecessary, as any exercise of the power would be subject to a wide range of safeguards—not only the production of a report about the impacts on savers and growth, but a savers’ interest test.

The hon. Member for Stratford-on-Avon spoke powerfully to her new clause 3, as did the hon. Member for Mid Dorset and North Poole (Vikki Slade). I believe the PPF works hard to make sure that it can deal quickly with payments for people with terminal illness, and the Bill contains other measures that mean it can do that at an earlier point in someone’s prognosis. The SR1 form would already be sufficient for the PPF to provide the certainty that the hon. Member for Stratford-on-Avon is looking for. I have checked with the PPF to ensure that currently within the PPF and the FAS we do not currently have any outstanding requests for such payments where they have been unable to make them, for example for the reasons of not having sufficient evidence. That said, she has spoken powerfully on that point and I will speak to the PPF at my next meeting with the chief executive and the chair to see what more can be done. I thank her for raising those issues.

I also thank the hon. Member for Horsham for bringing us back to the question of advice and guidance. Most of us do need help in preparing for retirement. However, I take a slightly more positive view of the current provision of free guidance through the Money and Pensions Service. I also agree a bit more with the  hon. Member for Mid Dunbartonshire (Susan Murray) that the task of Government is to reduce the complexity in our pensions system, rather than just hoping that ever more advice will help savers to navigate it. That is exactly why the parts of the Bill on guided retirement and small pots are so important as we move forward.

I would just like to cover some of the commitments I made in Committee. [Interruption.] I know this is going to be electric for all Members. That is the kind of enthusiasm I hope to see from more Members across the House. I will make a quick update on pensions dashboards, which at least one Member will appreciate. User testing on pensions dashboards has begun. I know that will thrill everybody in this House. [Hon. Members: “Hear, hear.”] That is the attitude we need! [Laughter.] It will ramp up over the course of the next year, with greater volumes and more focus on consumer behaviour. We will be conducting a full evaluation of pensions dashboards over the coming years as the service goes live. That will include the impact of dashboards on engagement with pensions. I commit to update the House on that work in due course.

Following on from other issues raised in Committee, I am pleased to report that following the findings of the curriculum and assessment review, the Government will make financial education compulsory in primary schools in England.

One issue raised in Committee was the Department’s monitoring and evaluation plans for the policy programme set out in the Bill, not least the guided retirement measures. Those comments have been taken on board; an updated impact assessment this week lays out how we intend to approach monitoring impact.

I have endeavoured to do justice to the very wide range of different issues raised during the debate today. I hope hon. Members will support Government amendments that build on policies that will make a real difference to all our constituents in the decades to come.

Question put and agreed to.

New clause 30 accordingly read a Second time, and added to the Bill. \p UNKNOWN: “(1) Schedule 7 to the Pensions Act 2004 (pension compensation provisions) is amended in accordance with subsections (2) and (3).

(2) In paragraph 28—

(a) for sub-paragraph (2) substitute—

“(2) Where a person is entitled to periodic compensation under any of those paragraphs, the person is entitled, on the indexation date, to an increase under this paragraph of—

(a) where sub-paragraph (2A) applies, the aggregate of the amount mentioned in sub-paragraph (2C) and the amount mentioned in sub-paragraph (2E);

(b) where sub-paragraph (2B) applies, the aggregate of the amount mentioned in sub-paragraph (2D) and the amount mentioned in sub-paragraph (2E);

(c) in any other case, the amount mentioned in sub-paragraph (2E).

(2A) This sub-paragraph applies where, immediately before the assessment date—

(a) the admissible rules of the scheme included a requirement for all or any part of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,

(b) that requirement did not apply only in relation to a guaranteed minimum pension provided by the scheme, and

(c) that requirement applied in relation to pre-1997 service in respect of which the compensation is payable.

(2B) This sub-paragraph applies where—

(a) the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period,

(b) that accrual was in relation to GMP indexed service in respect of which the compensation is payable, and

(c) immediately before the assessment date the admissible rules of the scheme—

(i) did not include a requirement of the kind mentioned in sub-paragraph (2A)(a), or

(ii) included such a requirement only in relation to a guaranteed minimum pension provided by the scheme.

(2C) The amount mentioned in this sub-paragraph is—

(a) the appropriate percentage of the amount of the pre-1997 underlying rate immediately before the indexation date, or

(b) where the person first became entitled to the periodic compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which the person was so entitled.

(2D) The amount mentioned in this sub-paragraph is—

(a) the appropriate percentage of the amount of the notional pre-1997 underlying rate immediately before the indexation date, or

(b) where the person first became entitled to the periodic compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which the person was so entitled.

(2E) The amount mentioned in this sub-paragraph is—

(a) the appropriate percentage of the amount of the post-1997 underlying rate immediately before the indexation date, or

(b) where the person first became entitled to the periodic compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which the person was so entitled.

(2F) In any case where it is unclear to the Board whether, immediately before the assessment date, the admissible rules of the scheme included a requirement of the kind mentioned in sub-paragraph (2A)(a), this paragraph has effect as if the scheme included such a requirement.

(2G) In any case where it is unclear to the Board whether, immediately before the assessment date, a requirement of the scheme of a kind mentioned in sub-paragraph (2A)(a) (including such a requirement included by virtue of sub-paragraph (2F)) applied in relation to particular pre-1997 service, this paragraph has effect as if the requirement applied in relation to such service.

(2H) In any case where it is unclear to the Board whether the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period, this paragraph has effect as if the scheme so provided.

(2I) In any case where it is unclear to the Board whether the accrual of a guaranteed minimum pension provided by the scheme (including by virtue of sub-paragraph (2H)) was in relation to particular GMP indexed service, this paragraph has effect as if the accrual was in relation to such service.”

(b) in sub-paragraph (3)—

(i) in the opening words for “sub-paragraph (2)” substitute “sub-paragraphs (2) to (2E)”;

(ii) for both definitions of “underlying rate” substitute—

““notional pre-1997 underlying rate” means, in the case of periodic compensation under paragraph 3 or 22, the aggregate of—

(a) a prescribed percentage of so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service, and

(b) so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amount within paragraph (a) of this definition immediately before the indexation date;

“notional pre-1997 underlying rate” means, in the case of periodic compensation under paragraph 5, 8, 11 or 15, the aggregate of—

(a) a prescribed percentage of so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service,

(b) a prescribed percentage of so much of the amount mentioned in sub-paragraph (3)(aa) of the paragraph in question as is attributable to pre-1997 service, and

(c) so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amounts within paragraphs (a) and (b) of this definition immediately before the indexation date;

“post-1997 underlying rate” means, in the case of periodic compensation under paragraph 3 or 22, the aggregate of—

(a) so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to post-1997 service, and

(b) so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amount within paragraph (a) of this definition immediately before the indexation date;

“post-1997 underlying rate” means, in the case of periodic compensation under paragraph 5, 8, 11 or 15, the aggregate of—

(a) so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to post-1997 service,

(b) so much of the amount mentioned in sub-paragraph (3)(aa) of the paragraph in question as is attributable to post-1997 service, and

(c) so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amounts within paragraphs (a) and (b) of this definition immediately before the indexation date;

“pre-1997 underlying rate” means, in the case of periodic compensation under paragraph 3 or 22, the aggregate of—

(a) so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service, and

(b) so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amount within paragraph (a) of this definition immediately before the indexation date;

“pre-1997 underlying rate” means, in the case of periodic compensation under paragraph 5, 8, 11 or 15, the aggregate of—

(a) so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service,

(b) so much of the amount mentioned in sub-paragraph (3)(aa) of the paragraph in question as is attributable to pre-1997 service, and

(c) so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amounts within paragraphs (a) and (b) of this definition immediately before the indexation date.”;

(c) in sub-paragraph (5)—

(i) in paragraph (a), for “sub-paragraph (2), each definition of “underlying rate”” substitute “sub-paragraphs (2C) to (2E), each definition of “notional pre-1997 underlying rate”, “post-1997 underlying rate” and “pre-1997 underlying rate””;

(ii) in paragraph (c), for “sub-paragraph (2), the definition of “underlying rate”” substitute “sub-paragraphs (2C) to (2E), the definition of “notional pre-1997 underlying rate”, the definition of “post-1997 underlying rate” and the definition of “pre-1997 underlying rate””;

(d) in sub-paragraph (6), before the definition of “post-1997 service” insert—

““GMP indexation period” means the period beginning with 6 April 1988 and ending with 5 April 1997;

“GMP indexed service” means—

(a) pensionable service which is within paragraph 36(4)(a) and occurs during the GMP indexation period, or

(b) pensionable service which is within paragraph 36(4)(b) and meets such requirements as may be prescribed;

“guaranteed minimum pension” has the same meaning as in the Pension Schemes Act 1993 (see section 8(2) of that Act);”;

(e) in sub-paragraph (7), for “and “pre-1997 service”” substitute “, “pre-1997 service” and “GMP indexed service””.

(3) In paragraph 29, for sub-paragraph (2) substitute—

“(2) The Board may also determine the percentage that is to be—

(a) the appropriate percentage for the purposes of sub-paragraphs (2C) and (2D) of paragraph 28;

(b) the appropriate percentage for the purposes of sub-paragraph (2E) of that paragraph,

(and where it does so, the definition of “appropriate percentage” in paragraph 28(3) does not apply in relation to the sub-paragraph in question).”

(4) Schedule 5 to the Pensions Act 2008 (pension compensation payable on discharge of pension compensation credit) is amended in accordance with subsections (5) and (6).

(5) In paragraph 17—

(a) for sub-paragraph (2) substitute—

“(2) Subject to sub-paragraph (3), the transferee is entitled, on each indexation date, to an increase of—

(a) where sub-paragraph (2A) applies, the amount mentioned in sub-paragraph (2E);

(b) where sub-paragraph (2B) applies, the amount mentioned in sub-paragraph (2F);

(c) where sub-paragraph (2C) applies, the amount mentioned in sub-paragraph (2G);

(d) where sub-paragraph (2D) applies, the amount mentioned in sub-paragraph (2H).

(2A) This sub-paragraph applies where—

(a) the transferor's PPF compensation is payable in accordance with paragraph 3, 5, 8, 11, 15 or 22 of Schedule 7 to the Pensions Act 2004 (“the relevant Schedule 7 provisions”), and

(b) immediately before the assessment date—

(i) the admissible rules of the scheme in respect of which that compensation is payable included a requirement for all or any part of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,

(ii) that requirement did not apply only in relation to a guaranteed minimum pension provided by the scheme, and

(iii) that requirement applied in relation to pre-1997 service in respect of which that compensation is payable.

(2B) This sub-paragraph applies where—

(a) the transferor's PPF compensation is payable in accordance with the relevant Schedule 7 provisions,

(b) the scheme in respect of which that compensation is payable provided a guaranteed minimum pension that accrued during the GMP indexation period,

(c) that accrual was in relation to GMP indexed service in respect of which that compensation is payable, and

(d) immediately before the assessment date the admissible rules of that scheme—

(i) did not include a requirement of the kind mentioned in sub-paragraph (2A)(b)(i), or

(ii) included such a requirement only in relation to a guaranteed minimum pension provided by the scheme.

(2C) This sub-paragraph applies where—

(a) the transferor's PPF compensation is payable in accordance with the relevant Schedule 7 provisions, and

(b) neither sub-paragraph (2A) nor sub-paragraph (2B) applies.

(2D) This sub-paragraph applies where the transferor's PPF compensation is payable otherwise than in accordance with the relevant Schedule 7 provisions.

(2E) The amount mentioned in this sub-paragraph is the aggregate of the appropriate percentage of the pre-1997 underlying rate and the appropriate percentage of the post-1997 underlying rate.

(2F) The amount mentioned in this sub-paragraph is the aggregate of the appropriate percentage of the notional pre-1997 underlying rate and the appropriate percentage of the post-1997 underlying rate.

(2G) The amount mentioned in this sub-paragraph is the appropriate percentage of the post-1997 underlying rate.

(2H) The amount mentioned in this sub-paragraph is the appropriate percentage of the general underlying rate.”

(b) in sub-paragraph (3), for “(2)” substitute “(2E), (2F), (2G) or (2H) (as the case may be)”;

(c) after sub-paragraph (3) insert—

“(3A) For the purposes of sub-paragraphs (2A) to (2C)—

(a) in any case where it is unclear to the Board whether, immediately before the assessment date, the admissible rules of the scheme included a requirement of the kind mentioned in sub-paragraph (2A)(b)(i), those sub-paragraphs have effect as if the scheme included such a requirement;

(b) in any case where it is unclear to the Board whether, immediately before the assessment date, a requirement of the scheme of a kind mentioned in sub-paragraph (2A)(b)(i) (including such a requirement included by virtue of paragraph (a)) applied in relation to particular pre-1997 service, those sub-paragraphs have effect as if the requirement applied in relation to such service;

(c) in any case where it is unclear to the Board whether the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period, those sub-paragraphs have effect as if the scheme so provided;

(d) in any case where it is unclear to the Board whether the accrual of a guaranteed minimum pension provided by the scheme (including by virtue of paragraph (c)) was in relation to particular GMP indexed service, those sub-paragraphs have effect as if the accrual was in relation to such service.”

(d) in sub-paragraph (4)—

(i) in the opening words, for “sub-paragraph (2)” substitute “sub-paragraphs (2) to (2H)”;

(ii) for the definition of “the underlying rate” substitute—

““the general underlying rate” , as at an indexation date, is the aggregate of—

(a) the general indexed proportion of the aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,

(b) so much of any actuarial increase under paragraph 16A as relates to the amount in paragraph (a), and

(c) so much of any annual increase to which the transferee is entitled under this paragraph in respect of earlier indexation dates as relates to the amounts in paragraphs (a) and (b);

“the notional pre-1997 underlying rate” , as at an indexation date, is the aggregate of—

(a) the notional pre-1997 indexed proportion of the aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,

(b) so much of any actuarial increase under paragraph 16A as relates to the amount in paragraph (a), and

(c) so much of any annual increase to which the transferee is entitled under this paragraph in respect of earlier indexation dates as relates to the amounts in paragraphs (a) and (b);

“the post-1997 underlying rate” , as at an indexation date, is the aggregate of—

(a) the post-1997 indexed proportion of the aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,

(b) so much of any actuarial increase under paragraph 16A as relates to the amount in paragraph (a), and

(c) so much of any annual increase to which the transferee is entitled under this paragraph in respect of earlier indexation dates as relates to the amounts in paragraphs (a) and (b);

“the pre-1997 underlying rate” , as at an indexation date, is the aggregate of—

(a) the pre-1997 indexed proportion of the aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,

(b) so much of any actuarial increase under paragraph 16A as relates to the amount in paragraph (a), and

(c) so much of any annual increase to which the transferee is entitled under this paragraph in respect of earlier indexation dates as relates to the amounts in paragraphs (a) and (b).”;

(e) omit sub-paragraphs (5) and (6);

(f) before sub-paragraph (7) insert—

“(6A) For the purposes of paragraph (a) of the definition of “the general underlying rate”, “the general indexed proportion” is such proportion as is determined in accordance with regulations made by the Secretary of State.

(6B) For the purposes of paragraph (a) of the definition of “the notional pre-1997 underlying rate”, “the notional pre-1997 indexed proportion” is such proportion of the amount mentioned in sub-paragraph (3)(a) of the paragraph of Schedule 7 to the Pensions Act 2004 under which the transferor’s PPF compensation is payable that is attributable to pre-1997 service as may be prescribed.

(6C) For the purposes of paragraph (a) of the definition of “the post-1997 underlying rate”, “the post-1997 indexed proportion” is the proportion of the amount mentioned in sub-paragraph (3)(a) of the paragraph of that Schedule under which the transferor’s PPF compensation is payable that is attributable to post-1997 service.

(6D) For the purposes of paragraph (a) of the definition of “the pre-1997 underlying rate”, “the pre-1997 indexed proportion” is the proportion of the amount mentioned in sub-paragraph (3)(a) of the paragraph of that Schedule under which the transferor’s PPF compensation is payable that is attributable to pre-1997 service.”;

(g) in sub-paragraph (7), for ““the underlying rate”” substitute ““the general underlying rate”, the definition of “the notional pre-1997 underlying rate”, the definition of “the post-1997 underlying rate” and the definition of “the pre-1997 underlying rate””;

(h) in paragraph (9)—

(i) before the definition of “post-1997 service” insert—

““GMP indexation period” means the period beginning with 6 April 1988 and ending with 5 April 1997;

“guaranteed minimum pension” has the same meaning as in the Pension Schemes Act 1993 (see section 8(2) of that Act);”;

(ii) in the definition of “post-1997 service” for “has” substitute “, “pre-1997 service” and “GMP indexed service” have”;

(iii) after that definition insert—

““the assessment date” , in relation to a pension scheme, has the same meaning as in that Schedule (see paragraph 2 of that Schedule);”.

(6) In paragraph 20, in sub-paragraph (1)(b), for “for the purposes of paragraph 17(2)” substitute “—

(i) of the pre-1997 underlying rate and of the notional pre-1997 underlying rate for the purposes of sub-paragraphs (2E) and (2F) of paragraph 17;

(ii) of the post-1997 underlying rate for the purposes of sub-paragraphs (2E), (2F) and (2G) of that paragraph;

(iii) of the general underlying rate for the purposes of sub-paragraph (2H) of that paragraph.””—(Torsten Bell.)

This new clause makes provision for certain compensation paid by the Pension Protection Fund in respect of a person’s pre-1997 pensionable service under legislation extending to England and Wales and Scotland to be increased annually.

Brought up, read the First and Second time, and added to the Bill. \p UNKNOWN: “(1) Schedule 6 to the Pensions (Northern Ireland) Order 2005 (S.I. 2005/255 (N.I. 1)) (pension compensation provisions) is amended in accordance with subsections (2) and (3).

(2) In paragraph 28—

(a) for sub-paragraph (2) substitute—

“(2) Where a person is entitled to periodic compensation under any of those paragraphs, the person is entitled, on the indexation date, to an increase under this paragraph of—

(a) where sub-paragraph (2A) applies, the aggregate of the amount mentioned in sub-paragraph (2C) and the amount mentioned in sub-paragraph (2E);

(b) where sub-paragraph (2B) applies, the aggregate of the amount mentioned in sub-paragraph (2D) and the amount mentioned in sub-paragraph (2E);

(c) in any other case, the amount mentioned in sub-paragraph (2E).

(2A) This sub-paragraph applies where, immediately before the assessment date—

(a) the admissible rules of the scheme included a requirement for all or any part of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,

(b) that requirement did not apply only in relation to a guaranteed minimum pension provided by the scheme, and

(c) that requirement applied in relation to pre-1997 service in respect of which the compensation is payable.

(2B) This sub-paragraph applies where—

(a) the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period,

(b) that accrual was in relation to GMP indexed service in respect of which the compensation is payable, and

(c) immediately before the assessment date the admissible rules of the scheme—

(i) did not include a requirement of the kind mentioned in sub-paragraph (2A)(a), or

(ii) included such a requirement only in relation to a guaranteed minimum pension provided by the scheme.

(2C) The amount mentioned in this sub-paragraph is—

(a) the appropriate percentage of the amount of the pre-1997 underlying rate immediately before the indexation date, or

(b) where the person first became entitled to the periodic compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which the person was so entitled.

(2D) The amount mentioned in this sub-paragraph is—

(a) the appropriate percentage of the amount of the notional pre-1997 underlying rate immediately before the indexation date, or

(b) where the person first became entitled to the periodic compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which the person was so entitled.

(2E) The amount mentioned in this sub-paragraph is—

(a) the appropriate percentage of the amount of the post-1997 underlying rate immediately before the indexation date, or

(b) where the person first became entitled to the periodic compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which the person was so entitled.

(2F) In any case where it is unclear to the Board whether, immediately before the assessment date, the admissible rules of the scheme included a requirement of the kind mentioned in sub-paragraph (2A)(a), this paragraph has effect as if the scheme included such a requirement.

(2G) In any case where it is unclear to the Board whether, immediately before the assessment date, a requirement of the scheme of a kind mentioned in sub-paragraph (2A)(a) (including such a requirement included by virtue of sub-paragraph (2F)) applied in relation to particular pre-1997 service, this paragraph has effect as if the requirement applied in relation to such service.

(2H) In any case where it is unclear to the Board whether the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period, this paragraph has effect as if the scheme so provided.

(2I) In any case where it is unclear to the Board whether the accrual of a guaranteed minimum pension provided by the scheme (including by virtue of sub-paragraph (2H)) was in relation to particular GMP indexed service, this paragraph has effect as if the accrual was in relation to such service.”

(b) in sub-paragraph (3)—

(i) in the opening words for “sub-paragraph (2)” substitute “sub-paragraphs (2) to (2E)”;

(ii) for both definitions of “underlying rate” substitute—

““notional pre-1997 underlying rate” means, in the case of periodic compensation under paragraph 3 or 22, the aggregate of—

(a) a prescribed percentage of so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service, and

(b) so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amount within paragraph (a) of this definition immediately before the indexation date;

“notional pre-1997 underlying rate” means, in the case of periodic compensation under paragraph 5, 8, 11 or 15, the aggregate of—

(a) a prescribed percentage of so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service,

(b) a prescribed percentage of so much of the amount mentioned in sub-paragraph (3)(aa) of the paragraph in question as is attributable to pre-1997 service, and

(c) so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amounts within paragraphs (a) and (b) of this definition immediately before the indexation date;

“post-1997 underlying rate” means, in the case of periodic compensation under paragraph 3 or 22, the aggregate of—

(a) so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to post-1997 service, and

(b) so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amount within paragraph (a) of this definition immediately before the indexation date;

“post-1997 underlying rate” means, in the case of periodic compensation under paragraph 5, 8, 11 or 15, the aggregate of—

(a) so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to post-1997 service,

(b) so much of the amount mentioned in sub-paragraph (3)(aa) of the paragraph in question as is attributable to post-1997 service, and

(c) so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amounts within paragraphs (a) and (b) of this definition immediately before the indexation date;

“pre-1997 underlying rate” means, in the case of periodic compensation under paragraph 3 or 22, the aggregate of—

(a) so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service, and

(b) so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amount within paragraph (a) of this definition immediately before the indexation date;

“pre-1997 underlying rate” means, in the case of periodic compensation under paragraph 5, 8, 11 or 15, the aggregate of—

(a) so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service,

(b) so much of the amount mentioned in sub-paragraph (3)(aa) of the paragraph in question as is attributable to pre-1997 service, and

(c) so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amounts within paragraphs (a) and (b) of this definition immediately before the indexation date.”;

(c) in sub-paragraph (5)—

(i) in paragraph (a), for “sub-paragraph (2), each definition of “underlying rate”” substitute “sub-paragraphs (2C) to (2E), each definition of “notional pre-1997 underlying rate”, “post-1997 underlying rate” and “pre-1997 underlying rate””;

(ii) in paragraph (c), for “sub-paragraph (2), the definition of “underlying rate”” substitute “sub-paragraphs (2C) to (2E), the definition of “notional pre-1997 underlying rate”, the definition of “post-1997 underlying rate” and the definition of “pre-1997 underlying rate””;

(d) in sub-paragraph (6), before the definition of “post-1997 service” insert—

““GMP indexation period” means the period beginning with 6 April 1988 and ending with 5 April 1997;

“GMP indexed service” means—

(a) pensionable service which is within paragraph 36(4)(a) and occurs during the GMP indexation period, or

(b) pensionable service which is within paragraph 36(4)(b) and meets such requirements as may be prescribed;

“guaranteed minimum pension” has the same meaning as in the Pension Schemes Act (see section 4(2) of that Act);”;

(e) in sub-paragraph (7), for “and “pre-1997 service”” substitute “, “pre-1997 service” and “GMP indexed service””.

(3) In paragraph 29, for sub-paragraph (2) substitute—

“(2) The Board may also determine the percentage that is to be—

(a) the appropriate percentage for the purposes of sub-paragraphs (2C) and (2D) of paragraph 28;

(b) the appropriate percentage for the purposes of sub-paragraph (2E) of that paragraph,

(and where it does so, the definition of “appropriate percentage” in paragraph 28(3) does not apply in relation to the sub-paragraph in question).”

(4) Schedule 4 to the Pensions (No.2) Act (Northern Ireland) 2008 (pension compensation payable on discharge of pension compensation credit) is amended in accordance with subsections (5) and (6).

(5) In paragraph 17—

(a) for sub-paragraph (2) substitute—

“(2) Subject to sub-paragraph (3), the transferee is entitled, on each indexation date, to an increase of—

(a) where sub-paragraph (2A) applies, the amount mentioned in sub-paragraph (2E);

(b) where sub-paragraph (2B) applies, the amount mentioned in sub-paragraph (2F);

(c) where sub-paragraph (2C) applies, the amount mentioned in sub-paragraph (2G);

(d) where sub-paragraph (2D) applies, the amount mentioned in sub-paragraph (2H).

(2A) This sub-paragraph applies where—

(a) the transferor's PPF compensation is payable in accordance with paragraph 3, 5, 8, 11, 15 or 22 of Schedule 6 to the 2005 Order (“the relevant Schedule 6 provisions”), and

(b) immediately before the assessment date —

(i) the admissible rules of the scheme in respect of which that compensation is payable included a requirement for all or any part of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,

(ii) that requirement did not apply only in relation to a guaranteed minimum pension provided by the scheme, and

(iii) that requirement applied in relation to pre-1997 service in respect of which that compensation is payable.

(2B) This sub-paragraph applies where—

(a) the transferor's PPF compensation is payable in accordance with the relevant Schedule 6 provisions,

(b) the scheme in respect of which that compensation is payable provided a guaranteed minimum pension that accrued during the GMP indexation period,

(c) that accrual was in relation to GMP indexed service in respect of which that compensation is payable, and

(d) immediately before the assessment date the admissible rules of that scheme—

(i) did not include a requirement of the kind mentioned in sub-paragraph (2A)(b)(i), or

(ii) included such a requirement only in relation to a guaranteed minimum pension provided by the scheme.

(2C) This sub-paragraph applies where—

(a) the transferor's PPF compensation is payable in accordance with the relevant Schedule 6 provisions, and

(b) neither sub-paragraph (2A) nor sub-paragraph (2B) applies.

(2D) This sub-paragraph applies where the transferor's PPF compensation is payable otherwise than in accordance with the relevant Schedule 6 provisions.

(2E) The amount mentioned in this sub-paragraph is the aggregate of the appropriate percentage of the pre-1997 underlying rate and the appropriate percentage of the post-1997 underlying rate.

(2F) The amount mentioned in this sub-paragraph is the aggregate of the appropriate percentage of the notional pre-1997 underlying rate and the appropriate percentage of the post-1997 underlying rate.

(2G) The amount mentioned in this sub-paragraph is the appropriate percentage of the post-1997 underlying rate.

(2H) The amount mentioned in this sub-paragraph is the appropriate percentage of the general underlying rate.”

(b) in sub-paragraph (3), for “(2)” substitute “(2E), (2F), (2G) or (2H) (as the case may be)”;

(c) after sub-paragraph (3) insert—

“(3A) For the purposes of sub-paragraphs (2A) to (2C)—

(a) in any case where it is unclear to the Board whether, immediately before the assessment date, the admissible rules of the scheme included a requirement of the kind mentioned in sub-   paragraph (2A)(b)(i), those sub-paragraphs have effect as if the scheme included such a requirement;

(b) in any case where it is unclear to the Board whether, immediately before the assessment date, a requirement of the scheme of a kind mentioned in sub-paragraph (2A)(b)(i) (including such a requirement included by virtue of paragraph (a)) applied in relation to particular pre-1997 service, those sub-paragraphs have effect as if the requirement applied in relation to such service;

(c) in any case where it is unclear to the Board whether the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period, those sub-paragraphs have effect as if the scheme so provided;

(d) in any case where it is unclear to the Board whether the accrual of a guaranteed minimum pension provided by the scheme (including by virtue of paragraph (c)) was in relation to particular GMP indexed service, those sub-paragraphs have effect as if the accrual was in relation to such service.”

(d) in sub-paragraph (4)—

(i) in the opening words, for “sub-paragraph (2)” substitute “sub-paragraphs (2) to (2H)”;

(ii) for the definition of “the underlying rate” substitute—

““the general underlying rate” , as at an indexation date, is the aggregate of—

(a) the general indexed proportion of the aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,

(b) so much of any actuarial increase under paragraph 16A as relates to the amount in paragraph (a), and

(c) so much of any annual increase to which the transferee is entitled under this paragraph in respect of earlier indexation dates as relates to the amounts in paragraphs (a) and (b);

“the notional pre-1997 underlying rate” , as at an indexation date, is the aggregate of—

(a) the notional pre-1997 indexed proportion of the aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,

(b) so much of any actuarial increase under paragraph 16A as relates to the amount in paragraph (a), and

(c) so much of any annual increase to which the transferee is entitled under this paragraph in respect of earlier indexation dates as relates to the amounts in paragraphs (a) and (b);

“the post-1997 underlying rate” , as at an indexation date, is the aggregate of—

(a) the post-1997 indexed proportion of the aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,

(b) so much of any actuarial increase under paragraph 16A as relates to the amount in paragraph (a), and

(c) so much of any annual increase to which the transferee is entitled under this paragraph in respect of earlier indexation dates as relates to the amounts in paragraphs (a) and (b);

“the pre-1997 underlying rate” , as at an indexation date, is the aggregate of—

(a) the pre-1997 indexed proportion of the aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,

(b) so much of any actuarial increase under paragraph 16A as relates to the amount in paragraph (a), and

(c) so much of any annual increase to which the transferee is entitled under this paragraph in respect of earlier indexation dates as relates to the amounts in paragraphs (a) and (b).”;

(e) omit sub-paragraphs (5) and (6);

(f) before sub-paragraph (7) insert—

“(6A) For the purposes of paragraph (a) of the definition of “the general underlying rate”, “the general indexed proportion” is such proportion as is determined in accordance with regulations made by the Department.

(6B) For the purposes of paragraph (a) of the definition of “the notional pre-1997 underlying rate”, “the notional pre-1997 indexed proportion” is such proportion of the amount mentioned in sub-paragraph (3)(a) of the paragraph of Schedule 6 to the 2005 Order under which the transferor’s PPF compensation is payable that is attributable to pre-1997 service as may be prescribed.

(6C) For the purposes of paragraph (a) of the definition of “the post-1997 underlying rate”, “the post-1997 indexed proportion” is the proportion of the amount mentioned in sub-paragraph (3)(a) of the paragraph of that Schedule under which the transferor’s PPF compensation is payable that is attributable to post-1997 service.

(6D) For the purposes of paragraph (a) of the definition of “the pre-1997 underlying rate”, “the pre-1997 indexed proportion” is the proportion of the amount mentioned in sub-paragraph (3)(a) of the paragraph of that Schedule under which the transferor’s PPF compensation is payable that is attributable to pre-1997 service.”;

(g) in sub-paragraph (7), for ““the underlying rate”” substitute ““the general underlying rate”, the definition of “the notional pre-1997 underlying rate”, the definition of “the post-1997 underlying rate” and the definition of “the pre-1997 underlying rate””;

(h) for sub-paragraph 9 substitute—

“(9) In this paragraph—

“GMP indexation period” means the period beginning with 6 April 1988 and ending with 5 April 1997;

“guaranteed minimum pension” has the same meaning as in the Pension Schemes Act (see section 4(2) of that Act);

“post-1997 service” , “pre-1997 service” and “GMP indexed service” have the same meaning as in paragraph 28 of Schedule 6 to the 2005 Order (annual increase in periodic compensation);

“the assessment date” , in relation to a pension scheme, has the same meaning as in that Schedule (see paragraph 2 of that Schedule).”

(6) In paragraph 20, in sub-paragraph (1)(b), for “for the purposes of paragraph 17(2)” substitute “—

(i) of the pre-1997 underlying rate and of the notional pre-1997 underlying rate for the purposes of sub-paragraphs (2E) and (2F) of paragraph 17;

(ii) of the post-1997 underlying rate for the purposes of sub-paragraphs (2E), (2F) and (2G) of that paragraph;

(iii) of the general underlying rate for the purposes of sub-paragraph (2H) of that paragraph.””—(Torsten Bell.)

This new clause makes provision for certain compensation paid by the Pension Protection Fund in respect of a person’s pre-1997 pensionable service under legislation extending to Northern Ireland to be increased annually.

Brought up, read the First and Second time, and added to the Bill. \p UNKNOWN: “(1) The Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986) are amended as follows.

(2) In paragraph 7(1)(b) of Schedule 2 (determination of annual and initial payments), after “(b)(i)” insert “, (ia) and (ib)”.

(3) Paragraph 9 of that Schedule is amended in accordance with subsections (4) to (6).

(4) In sub-paragraph (2)—

(a) in paragraph (a) of the definition of “underlying rate”, after sub-paragraph (i) insert—

“(ia) where sub-paragraph (2A) applies, the product of X multiplied by so much of the expected pension as is attributable to pre-1997 service;

(ib) where sub-paragraph (2B) applies, the product of X multiplied by the relevant percentage of so much of the expected pension as is attributable to pre-1997 service;”;

(b) in paragraph (b) of the definition of “underlying rate”—

(i) omit the “and” at the end of sub-paragraph (i);

(ii) after that sub-paragraph insert—

“(ia) where sub-paragraph (2A) applies, so much of the expected pension as is, proportionally, attributable to pre-1997 service;

(ib) where sub-paragraph (2B) applies, the relevant percentage of so much of the expected pension as is, proportionally, attributable to pre-1997 service; and”;

(c) after the definition of “post-1997 service” insert—

““pre-1997 service” means—

(a) pensionable service (whether actual or notional) which occurs before 6th April 1997; or

(b) where the annual payment is payable to, or in respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred before 6th April 1997;

“relevant percentage” means such percentage as may be determined by the Secretary of State;”.

(5) After sub-paragraph (2) insert—

“(2A) This sub-paragraph applies where, immediately before the qualifying pension scheme began to wind up—

(a) the scheme rules included a requirement for all or any part of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,

(b) that requirement did not apply only in relation to a guaranteed minimum pension provided by the scheme, and

(c) that requirement applied in relation to pre-1997 service in respect of which the annual payment is payable.

(2B) This sub-paragraph applies where—

(a) the qualifying pension scheme provided a guaranteed minimum pension that accrued during the GMP indexation period,

(b) that accrual was in relation to GMP indexed service in respect of which the annual payment is payable, and

(c) immediately before the scheme began to wind up the scheme rules—

(i) did not include a requirement of the kind mentioned in sub-paragraph (2A)(a), or

(ii) included such a requirement only in relation to a guaranteed minimum pension provided by the scheme.

(2C) For the purposes of sub-paragraphs (2A) and (2B)—

(a) in any case where it is unclear to the scheme manager whether, immediately before the scheme began to wind up, the scheme rules included a requirement of the kind mentioned in sub-paragraph (2A)(a), those sub-paragraphs have effect as if the scheme included such a requirement;

(b) in any case where it is unclear to the scheme manager whether, immediately before the scheme began to wind up, a requirement of the scheme of a kind mentioned in sub-paragraph (2A)(a) (including such a requirement included by virtue of paragraph (a)) applied in relation to particular pre-1997 service, those sub-paragraphs have effect as if the requirement applied in relation to such service;

(c) in any case where it is unclear to the scheme manager whether the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period, those sub-paragraphs have effect as if the scheme so provided;

(d) in any case where it is unclear to the scheme manager whether the accrual of a guaranteed minimum pension provided by the scheme (including by virtue of paragraph (c)) was in relation to particular GMP indexed service, those sub-paragraphs have effect as if the accrual was in relation to such service.

(2D) In sub-paragraphs (2B) and (2C)—

“GMP indexation period” means the period beginning with 6 April 1988 and ending with 5 April 1997;

“GMP indexed service” means—

(a) pensionable service (whether actual or notional) which occurs during the GMP indexation period; or

(b) where the annual payment is payable to, or in respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred during the GMP indexation period.”

(6) In sub-paragraph (3)—

(a) after “attributable to” insert “pre-1997 service or”;

(b) for “that amount” substitute “the amount in question”.

(7) In paragraph 7(1)(b) of Schedule 2A (determination of ill health and interim ill health payments), after “(b)(i)” insert “, (ia) and (ib)”.

(8) Paragraph 9 of that Schedule is amended in accordance with subsections (9) to (11).

(9) In sub-paragraph (2)—

(a) after the definition of “E” insert—

““EA” means so much of the expected pension as is attributable to pre-1997 service;

“EB” means the relevant percentage of so much of the expected pension as is attributable to pre-1997 service;”;

(b) after the definition of “post-1997 service” insert—

““pre-1997 service” means—

(a) pensionable service (whether actual or notional) which occurs before 6th April 1997; or

(b) where the ill health payment is payable to, or in respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred before 6th April 1997;

“relevant percentage” means such percentage as may be determined by the Secretary of State;”;

(c) in paragraph (a) of the definition of “underlying rate”, after sub-paragraph (i) insert—

“(ia) where sub-paragraph (2A) applies, the product of X multiplied by (C x EA);

(ib) where sub-paragraph (2B) applies, the product of X multiplied by (C x EB);”;

(d) in paragraph (b) of the definition of “underlying rate”—

(i) omit the “and” at the end of sub-paragraph (i);

(ii) after that sub-paragraph insert—

“(ia) where sub-paragraph (2A) applies, so much of the amount “A” for the purposes of paragraph 2 as is, proportionately, attributable to pre-1997 service;

(ib) where sub-paragraph (2B) applies, the relevant percentage of so much of the amount “A” for the purposes of paragraph 2 as is, proportionately, attributable to pre-1997 service; and”;

(10) After sub-paragraph (2) insert—

“(2A) This sub-paragraph applies where immediately before the qualifying pension scheme began to wind up—

(a) the scheme rules included a requirement for all or any part of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,

(b) that requirement did not apply only in relation to a guaranteed minimum pension provided by the scheme, and

(c) that requirement applied in relation to pre-1997 service in respect of which the ill health payment is payable.

(2B) This sub-paragraph applies where—

(a) the qualifying pension scheme provided a guaranteed minimum pension that accrued during the GMP indexation period,

(b) that accrual was in relation to GMP indexed service in respect of which the ill health payment is payable, and

(c) immediately before the scheme began to wind up the scheme rules—

(i) did not include a requirement of the kind mentioned in sub-paragraph (2A)(a), or

(ii) included such a requirement only in relation to a guaranteed minimum pension provided by the scheme

(2C) For the purposes of sub-paragraphs (2A) and (2B)—

(a) in any case where it is unclear to the scheme manager whether, immediately before the scheme began to wind up, the scheme rules included a requirement of the kind mentioned in sub-paragraph (2A)(a), those sub-paragraphs have effect as if the scheme included such a requirement;

(b) in any case where it is unclear to the scheme manager whether, immediately before the scheme began to wind up, a requirement of the scheme of a kind mentioned in sub-paragraph (2A)(a) (including such a requirement included by virtue of paragraph (a)) applied in relation to particular pre-1997 service, those sub-paragraphs have effect as if the requirement applied in relation to such service;

(c) in any case where it is unclear to the scheme manager whether the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period, those sub-paragraphs have effect as if the scheme so provided;

(d) in any case where it is unclear to the scheme manager whether the accrual of a guaranteed minimum pension provided by the scheme (including by virtue of paragraph (c)) was in relation to particular GMP indexed service, those sub-paragraphs have effect as if the accrual was in relation to such service.

(2D) In sub-paragraphs (2A) to (2C)—

“GMP indexation period” means the period beginning with 6 April 1988 and ending with 5 April 1997;

“GMP indexed service” means—

(a) pensionable service (whether actual or notional) which occurs during the GMP indexation period; or

(b) where the ill health payment is payable to, or in respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred during the GMP indexation period;

“guaranteed minimum pension” has the meaning given in section 8(2) of the 1993 Act.”

(11) In sub-paragraph (3)—

(a) after “attributable to” insert “pre-1997 service or”;

(b) for “that amount” substitute “the amount in question”.

(12) In paragraph 6 of Schedule 3 (determination of certain annual payments)—

(a) in sub-paragraph (2)—

(i) in the definition of “underlying rate”, after paragraph (a) insert—

“(aa) where sub-paragraph (2A) applies, the product of X multiplied by—

(i) where the beneficiary is a qualifying member or a survivor or surviving dependant of a qualifying member who died on or after the calculation date—

(aa) where the qualifying member is not a qualifying member to whom regulation 17D applied, so much of the revalued notional pension as is attributable to pre-1997 service; or

(bb) where the qualifying member is a qualifying member to whom regulation 17D applied, so much of the sum of R-A as is attributable to pre-1997 service; and

(ii) where the beneficiary is a survivor or surviving dependant in respect of whom a survivor notional pension has been determined, so much of the survivor notional pension as is attributable to the qualifying member’s pre-1997 service;

(ab) where sub-paragraph (2B) applies, the product of X multiplied by—

(i) where the beneficiary is a qualifying member or a survivor or surviving dependant of a qualifying member who died on or after the calculation date—

(aa) where the qualifying member is not a qualifying member to whom regulation 17D applied, the relevant percentage of so much of the revalued notional pension as is attributable to pre-1997 service; or

(bb) where the qualifying member is a qualifying member to whom regulation 17D applied, the relevant percentage of so much of the sum of R-A as is attributable to pre-1997 service; and

(ii) where the beneficiary is a survivor or surviving dependant in respect of whom a survivor notional pension has been determined, the relevant percentage of so much of the survivor notional pension as is attributable to the qualifying member’s pre-1997 service;”;

(iii) after the definition of “post-1997 service” insert—

““pre-1997 service” means—

(a) pensionable service (either actual or notional) which occurred before 6th April 1997; or

(b) where the pension was payable to, or in respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred before 6th April 1997;

“relevant percentage” means such percentage as may be determined by the Secretary of State;”;

(b) after sub-paragraph (2) insert—

“(2A) This sub-paragraph applies where immediately before the qualifying pension scheme began to wind up—

(a) the scheme rules included a requirement for all or any part of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,

(b) that requirement did not apply only in relation to a guaranteed minimum pension provided by the scheme, and

(c) that requirement applied in relation to pre-1997 service in respect of which the annual payment is payable.

(2B) This sub-paragraph applies where—

(a) the qualifying pension scheme provided a guaranteed minimum pension that accrued during the GMP indexation period,

(b) that accrual was in relation to GMP indexed service in respect of which the annual payment is payable, and

(c) immediately before the scheme began to wind up the scheme rules—

(i) did not include a requirement of the kind mentioned in sub-paragraph (2A)(a), or

(ii) included such a requirement only in relation to a guaranteed minimum pension provided by the scheme.

(2C) For the purposes of sub-paragraphs (2A) and (2B)—

(a) in any case where it is unclear to the scheme manager whether, immediately before the scheme began to wind up, the scheme rules included a requirement of the kind mentioned in sub-paragraph (2A)(a), those sub-paragraphs have effect as if the scheme included such a requirement;

(b) in any case where it is unclear to the scheme manager whether, immediately before the scheme began to wind up, a requirement of the scheme of a kind mentioned in sub-paragraph (2A)(a) (including such a requirement included by virtue of paragraph (a)) applied in relation to particular pre-1997 service, those sub-paragraphs have effect as if the requirement applied in relation to such service;

(c) in any case where it is unclear to the scheme manager whether the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period those sub-paragraphs have effect as if the scheme so provided;

(d) in any case where it is unclear to the scheme manager whether the accrual of a guaranteed minimum pension provided by the scheme (including by virtue of paragraph (c)) was in relation to particular GMP indexed service, those sub-paragraphs have effect as if the accrual was in relation to such service.

(2D) In sub-paragraphs (2A) to (2C)—

“GMP indexation period” means the period beginning with 6 April 1988 and ending with 5 April 1997;

“GMP indexed service” means—

(a) pensionable service (whether actual or notional) which occurs during the GMP indexation period; or

(b) where the pension was payable to, or in respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred during the GMP indexation period;

“guaranteed minimum pension” has the meaning given in section 8(2) of the 1993 Act.”;

(c) in sub-paragraph (3), after “attributable to” insert “pre-1997 service and”.

(13) In paragraph 6 of Schedule 5 (determination of certain ill health payments)—

(a) in sub-paragraph (2)—

(i) in the definition of “underlying rate”, after paragraph (a) insert—

“(aa) where sub-paragraph (2A) applies, the product of X multiplied by (C x VA);

(ab) where sub-paragraph (2B) applies, the product of X multiplied by (C x VB);”;

(ii) after the definition of “post-1997 service” insert—

““pre-1997 service” means—

(a) pensionable service (either actual or notional) which occurred before 6th April 1997; or

(b) where the pension was payable to, or in respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred before 6th April 1997;

“relevant percentage” means such percentage as may be determined by the Secretary of State;”;

(iii) after the definition of “V” insert—

““VA” means—

(a) where the beneficiary is a qualifying member or a survivor or surviving dependant of a qualifying member who died on or after the calculation date—

(i) where the qualifying member is not a qualifying member to whom regulation 17D applied, so much of the revalued notional pension as is attributable to pre-1997 service; or

(ii) where the qualifying member is a qualifying member to whom regulation 17D applied, so much of the sum of R-A as is attributable to pre-1997 service; and

(b) where the beneficiary is a survivor or surviving dependant in respect of whom a survivor notional pension has been determined, so much of the survivor notional pension as is attributable to the qualifying member’s pre-1997 service;

“VB” means—

(a) where the beneficiary is a qualifying member or a survivor or surviving dependant of a qualifying member who died on or after the calculation date—

(i) where the qualifying member is not a qualifying member to whom regulation 17D applied, the relevant percentage of so much of the revalued notional pension as is attributable to pre-1997 service; or

(ii) where the qualifying member is a qualifying member to whom regulation 17D applied, the relevant percentage of so much of the sum of R-A as is attributable to pre-1997 service; and

(b) where the beneficiary is a survivor or surviving dependant in respect of whom a survivor notional pension has been determined, the relevant percentage of so much of the survivor notional pension as is attributable to the qualifying member’s pre-1997 service;”;

(b) after sub-paragraph (2) insert—

“(2A) This sub-paragraph applies where immediately before the qualifying pension scheme began to wind up—

(a) the scheme rules included a requirement for all or any part of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,

(b) that requirement did not apply only in relation to a guaranteed minimum pension provided by the scheme, and

(c) that requirement applied in relation to pre-1997 service in respect of which the ill health payment is payable.

(2B) This sub-paragraph applies where—

(a) the qualifying pension scheme provided a guaranteed minimum pension that accrued during the GMP indexation period,

(b) that accrual was in relation to GMP indexed service in respect of which the ill health payment is payable, and

(c) immediately before the scheme began to wind up the scheme rules—

(i) did not include a requirement of the kind mentioned in sub-paragraph (2A)(a), or

(ii) included such a requirement only in relation to a guaranteed minimum pension provided by the scheme.

(2C) For the purposes of sub-paragraphs (2A) and (2B)—

(a) in any case where it is unclear to the scheme manager whether, immediately before the scheme began to wind up, the scheme rules included a requirement of the kind mentioned in sub-paragraph (2A)(a), those sub-paragraphs have effect as if the scheme included such a requirement;

(b) in any case where it is unclear to the scheme manager whether, immediately before the scheme began to wind up, a requirement of the scheme of a kind mentioned in sub-paragraph (2A)(a) (including such a requirement included by virtue of paragraph (a)) applied in relation to particular pre-1997 service, those sub-paragraphs have effect as if the requirement applied in relation to such service;

(c) in any case where it is unclear to the scheme manager whether the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period, those sub-paragraphs have effect as if the scheme so provided;

(d) in any case where it is unclear to the scheme manager whether the accrual of a guaranteed minimum pension provided by the scheme (including by virtue of paragraph (c)) was in relation to particular GMP indexed service, those sub-paragraphs have effect as if the accrual was in relation to such service.

(2D) In sub-paragraphs (2A) to (2C)—

“GMP indexation period” means the period beginning with 6 April 1988 and ending with 5 April 1997;

“GMP indexed service” means—

(a) pensionable service (whether actual or notional) which occurs during the GMP indexation period; or

(b) where the pension was payable to, or in respect of, a qualifying member who is, or was, a pension credit member of the scheme, pension credit rights deriving from rights attributable to service (whether actual or notional) which occurred during the GMP indexation period;

“guaranteed minimum pension” has the meaning given in section 8(2) of the 1993 Act.”;

(c) in sub-paragraph (3), after “attributable to” insert “pre-1997 service and”.”—(Torsten Bell.)

This new clause makes provision for certain assistance paid under the Financial Assistance Scheme Regulations 2005 in respect of a person’s pre-1997 pensionable service to be increased annually.

Brought up, read the First and Second time, and added to the Bill. \p UNKNOWN: “(1) After paragraph 2 of Schedule 2 to the Procurement Act 2023 (general vertical arrangements exemption from public procurement rules) insert—

2A “(1) A contract between a local government pension scheme manager and an asset pool company providing for the company—

(a) to manage the funds and other assets for which the scheme manager is responsible,

(b) to make and manage investments on behalf of the scheme manager, and

(c) if the contract so provides, to carry out other investment management activities for or on behalf of the scheme manager,

if each of the conditions set out in sub-paragraph (2) is met.

(2) The conditions are—

(a) that more than 80% of the activities of the company are investment management activities carried out for or on behalf of local government pension scheme managers;

(b) that no person exercises a decisive influence on the activities of the company (either directly or indirectly) other than—

(i) the participating scheme managers in the company, acting in their capacity as local government pension scheme managers, and

(ii) where the only shareholder in the company is another company (see section 1(9)(a) of the Pension Schemes Act 2025), that other company;

(c) that the company does not carry out any activities that are contrary to the interests of—

(i) the participating scheme managers in the company, in their capacity as local government pension scheme managers, or

(ii) where the only shareholder in the company is another company, that other company.

(3) The contracts covered by this paragraph include a contract where the local government pension scheme manager concerned is already a participating scheme manager in the company (as well as one where the scheme manager concerned will become a participating scheme manager in the company as a result of entering into it).

(4) An appropriate authority may by regulations make provision about how a calculation as to the percentage of activities carried out by an asset pool company is to be made for the purposes of sub-paragraph (2)(a).

(5) For the purposes of sub-paragraph (2)(b), a person does not exercise a decisive influence on the activities of the asset pool company only by reason of—

(a) being a director, officer or manager of the company, acting in that capacity, or

(b) where the only shareholder in the company is another company, being a director, officer or manager of that other company.

(6) In this paragraph—

“asset pool company” has the meaning given by section 1(7)(a) of the Pension Schemes Act 2025;

“investment management activities” means activities involved in or connected with the management of funds or other assets for which a scheme manager is responsible (including making and managing investments on behalf of the scheme manager);

“local government pension scheme manager” means a person who is, by virtue of section 4(5) of the Public Service Pensions Act 2013, a scheme manager for a pension scheme for local government workers in England and Wales;

“participating scheme manager” , in relation to an asset pool company, means a local government pension scheme manager who participates in the company within the meaning of section 1(9)(b) of the Pension Schemes Act 2025.””—(Torsten Bell.)

This new clause amends the Procurement Act 2023 to create a new category of exempted contract covering certain investment management contracts between a local government scheme manager and the asset pool company. This is intended to replace Clause 4 in the current print of the Bill.

Brought up, read the First and Second time, and added to the Bill. \p UNKNOWN: “(1) The Pensions Act 2004 is amended in accordance with subsections (2) to (5).

(2) Omit section 116 (power of Secretary of State to pay grants to Board of Pension Protection Fund).

(3) Omit section 117 (power of Secretary of State to impose administration levy on pension schemes).

(4) In section 173 (Pension Protection Fund), in subsection (3), before paragraph (a) insert—

“(za) any sums required to meet expenditure of the Board that is attributable to the operation or administration of the Pension Protection Fund,”

(5) In section 188 (fraud compensation fund), in subsection (3), before paragraph (a) insert—

“(za) any sums required to meet expenditure of the Board that is attributable to the operation or administration of the Fraud Compensation Fund,”

(6) No amount is payable to the Secretary of State by virtue of section 117 of the Pensions Act 2004 (administration levy) in respect of the financial years beginning with 1 April 2023 and 1 April 2024.

(7) In the Pensions Act 2008, in Schedule 10 (interest on late payment of levies), omit paragraph 3 (which makes an amendment about interest for late payment of the administration levy that has not been brought into force).”—(Torsten Bell.)

This new clause (which is intended to be added after clause 112) enables administrative expenses of the Board of the Pension Protection Fund to be paid out of the Pension Protection Fund and the Fraud Compensation Fund, and removes the existing administration levy mechanism; it also clarifies that no administration levy is payable for 2023/24 or 2024/25.

Brought up, read the First and Second time, and added to the Bill. \p UNKNOWN: “(1) The Secretary of State must by regulations make provision about how a person may demonstrate that they are terminally ill for purposes relating to compensation or assistance from the Pension Protection Fund or Financial Assistance Scheme.

(2) In making regulations under this section, the Secretary of State must seek to minimise the administrative burden placed upon the person with a terminal illness.

(3) Regulations under this section must provide that, where the Department of Work and Pensions (“the Department”) holds a valid SR1 form in respect of a person seeking to demonstrate that they are terminally ill for purposes relating to compensation or assistance from the Pension Protection Fund or Financial Assistance Scheme, the Department must share that form with the Pension Protection Fund or the Financial Assistance Scheme.

(4) Regulations under this section must require the Pension Protection Fund and the Financial Assistance Scheme to make the appropriate payment or payments within a specified time of receipt of a valid application.”—(Manuela Perteghella.)

This new clause would require the Secretary of State to provide, by regulations, for the use of a valid SR1 form to make it easier for a person to demonstrate that they are terminally ill for purposes related to compensation from the PPF or FAS.

Brought up, and read the First time.

Question put, That the clause be read a Second time. \p UNKNOWN: The House divided: Ayes 87, Noes 299.

Question accordingly negatived. \p UNKNOWN: ‘(1) The Secretary of State may by regulations make provision for the establishment or facilitation of one or more investment vehicles through which pension schemes may invest for targeted social or economic benefit.

(2) Regulations under subsection (1) must specify the descriptions of targeted social or economic benefit to which the investment vehicles are to contribute, which may include, but are not limited to, investment in—

(a) projects that revitalise high street areas;

(b) initiatives demonstrating social benefit;

(c) affordable or social housing development;

(d) capital projects that meet essential public needs, such as care homes;

(e) clean, renewable energy projects.

(3) The regulations must make provision for—

(a) the types of pension schemes eligible to participate in such investment vehicles;

(b) the governance, oversight, and reporting requirements for the investment vehicles and participating pension schemes;

(c) the means by which the contribution of such investments to targeted social or economic benefit is measured and reported;

(d) the roles and responsibilities of statutory bodies, including the Pensions Regulator and the Financial Conduct Authority, in authorising, regulating, or supervising such investment vehicles and the participation of pension schemes within them.

(4) The regulations may—

(a) make different provision for different descriptions of pension schemes, investment vehicles, or targeted social or economic benefits;

(b) provide for the pooling of assets from multiple pension schemes within such vehicles;

(c) require pension scheme trustees or managers to have regard to the availability and suitability of investment vehicles when formulating investment strategies, where consistent with—

(i) their fiduciary duties, and

(ii) the long-term value for money for members.

(5) In this Chapter, "pension scheme" has the same meaning as in section 1(5) of the Pension Schemes Act 1993.’—(Steve Darling.)

This new clause would allow the Secretary of State to establish investment funds to encourage investment in areas such as high streets, social housing, care homes, clean renewable energy, and other investments with clear social benefits.

Brought up, and read the First time.

Question put, That the clause be read a Second time:— \p UNKNOWN: The House divided: Ayes 77, Noes 298.

Question accordingly negatived. \p UNKNOWN: Amendments made: 20, page 3, line 24, leave out from “whose” to “, and” and insert

“shares are all held by scheme managers only or by another company limited by shares and registered in the United Kingdom whose shares are all held by scheme managers only”.

The amendment ensures that a company can be an asset pool company either if its shareholders consist only of scheme managers or if it only has one shareholder, being a company whose shareholders consist only of scheme managers.

Amendment 21, page 3, line 26, after “company” insert—

“( ) being a shareholder in another company which is the only shareholder of the company,”—(Torsten Bell.)

The amendment is consequential on amendment 20, which allows scheme managers to arrange for a company wholly owned by scheme managers to hold the shares in an asset pool company. \p UNKNOWN: Amendments made: 22, page 4, line 9, leave out from “Wales” to end of line and insert

“each scheme manager (other than the Environment Agency) co-operates with an appropriate strategic authority”.—(Torsten Bell.)

The amendment refines the duty under clause 2(2)(c) for scheme regulations to require scheme managers to co-operate with strategic authorities. The new wording reflects a policy intention for the regulations to require each authority to co-operate (in relation to developing local investment opportunities) with the strategic authority whose area covers the area of the scheme manager. The Environment Agency’s area is the whole of England and so it is excluded by the amendment because the intended policy approach does not work for it. \p UNKNOWN: Amendment made: 23, page 5, line 35, leave out clause 4. —(Torsten Bell.)

This amendment is consequential on NC34 which inserts a new clause intended to supersede the current Clause 4. \p UNKNOWN: Amendment made: 24, page 23, line 25, leave out “specify” and insert “prescribe”—(Torsten Bell.)

This amendment is consequential on Amendment 25. \p UNKNOWN: Amendments made: 25, page 23, line 32, leave out

“person specified in the regulations”

and insert “prescribed person”.

This amendment makes use of the defined term “prescribed” to clarify how the regulations may identify a person who is to make proposals as to the destination of small pots.

Amendment 26, page 24, leave out line 1.

This amendment is consequential on Amendment 28.

Amendment 27, page 24, line 16, leave out “The” and insert “A”.

This amendment is consequential on Amendment 28.

Amendment 28, page 24, line 18, leave out subsection (5) and insert—

“(5) Small pots regulations may, in compliance with subsection (1)—

(a) prescribe one person to make all of the proposals required to be made under that subsection, or

(b) prescribe two or more persons in relation to different descriptions of those proposals.

(6) Small pots regulations must require a proposal made by virtue of subsection (1) to be notified to the trustees or managers of the auto-enrolment scheme that holds the pension pot to which the proposal relates unless those trustees or managers are themselves the destination proposer).

(7) A person prescribed under subsection (1) is referred to in this Chapter as a ‘destination proposer’.”—(Torsten Bell.)

This amendment ensures that the task of proposing destinations for small dormant pots may be undertaken by different persons, and defines such persons as “destination proposers”. \p UNKNOWN: Amendment made: 29, page 27, line 23, leave out

“by the small pots data platform operator under”

and insert “by virtue of”—(Torsten Bell.)

This amendment is consequential on Amendment 28. \p UNKNOWN: Amendment made: 30, page 28, line 1, leave out

“the small pots data platform operator”

and insert “a destination proposer”—(Torsten Bell.)

This amendment is consequential on Amendment 28. \p UNKNOWN: Amendments made: 31, page 29, line 28, leave out paragraph (h) and insert—

“(h) require a destination proposer, the trustees or managers of a relevant pension scheme, or the Secretary of State, to pay compensation to an individual who has suffered a loss as a result of a breach of the regulations;”.

This amendment makes a change consequential on Amendment 28; it also adds the Secretary of State to the list of persons who can be required to pay compensation for mistakes made operating the small pots regime.

Amendment 32, page 30, line 14, leave out

“the small pots data platform operator”

and insert “a destination proposer”.

This amendment is consequential on Amendment 28.

Amendment 33, page 30, line 22, leave out

“the small pots data platform operator”

and insert “a destination proposer”.

This amendment is consequential on Amendment 28.

Amendment 34, page 30, line 24, leave out

“the small pots data platform operator”

and insert—

“(i) a destination proposer, or (ii) the Secretary of State by virtue of section 31(1)(h) (compensation).”—(Torsten Bell.)

This amendment is consequential on Amendment 28. \p UNKNOWN: Amendments made: 35, page 32, line 29, at end insert—

“‘destination proposer’ has the meaning given by section 23(7);”.

This amendment is consequential on Amendment 28.

Amendment 36, page 33, leave out lines 19 and 20.—(Torsten Bell.) \p UNKNOWN: Amendments made: 37, page 39, line 17, after “Trust” insert “(“the RMT”)”.

This amendment introduces a defined term which is used in text added to the inserted section 28A by Amendment 42 and other amendments.

Amendment 38, page 39, line 20, leave out “relevant master trust” and insert “RMT”.

This amendment is consequential on Amendment 37.

Amendment 39, page 39, line 23, leave out “A relevant Master Trust” and insert “The RMT”.

This amendment is consequential on Amendment 37.

Amendment 40, page 39, line 25, leave out “and” and insert “to”.

This amendment is consequential on Amendment 42.

Amendment 41, page 39, line 29, leave out “relevant master trust” and insert “RMT”.

This amendment is consequential on Amendment 37.

Amendment 42, page 39, line 33, at end insert—

“(aa) if one or more relevant Master Trusts are connected with the RMT, the total value of assets of those schemes that—

(i) represent accrued rights of members of those schemes,

(ii) are held subject to the main scale default arrangement, and

(iii) are managed under the investment strategy mentioned in paragraph (a)(iii);”.

This amendment ensures that, when determining whether a relevant Master Trust has sufficient assets to be approved under the new section 28A of the Pensions Act 2008, the assets of connected relevant Master Trusts are included.

Amendment 43, page 39, leave out lines 34 and 35 and insert—

“(b) if one or more group personal pension schemes are connected with the RMT, the total value of assets of those schemes that—”.

This amendment is consequential on Amendment 44.

Amendment 44, page 40, line 1, leave out subsection (5) and insert—

“(5) A reference in subsection (4) to a relevant Master Trust or a group personal pension scheme being ‘connected’ with the RMT is to a relevant Master Trust or a group personal pension scheme having a prescribed connection with the RMT.

(5A) Regulations under subsection (5) may, for example, provide—

(a) that a relevant Master Trust is connected with the RMT only if it has the same scheme funder or scheme strategist as the RMT, or

(b) that a group personal pension scheme is connected with the RMT only if its provider is also the scheme funder or scheme strategist of the RMT.”

This amendment would mean that regulations would set out the relationship that must exist between the RMT and other relevant Master Trusts, or group personal pension schemes, for their assets to be pooled for the purposes of gaining approval under the new section 28A of the Pensions Act 2008.

Amendment 45, page 40, line 31, leave out “the” and insert “a”.

This amendment clarifies that the reference is not to a particular relevant Master Trust.

Amendment 46, page 40, line 37, leave out “Regulator” and insert “Authority”.

This amendment ensures consistent use of the defined term “the Authority”.

Amendment 47, page 42, leave out lines 1 and 2 and insert—

“(b) if one or more group personal pension schemes are connected with the GPP, the total value of assets of those schemes that—”.

This amendment is consequential on Amendment 49.

Amendment 48, page 42, leave out lines 8 and 9 and insert—

“(c) if one or more relevant Master Trusts are connected with the GPP, the total value of assets of those schemes that—”.

This amendment is consequential on Amendment 49.

Amendment 49, page 42, line 27, leave out subsection (8) and insert—

“(8) A reference in subsection (4) to a group personal pension scheme or a relevant Master Trust being “connected” with the GPP is to a group personal pension scheme or a relevant Master Trust having a prescribed connection with the GPP.

(8A) Regulations under subsection (8) may, for example, provide—

(a) that a group personal pension scheme is connected with the GPP only if it has the same provider as the GPP, or

(b) that a relevant Master Trust is connected with the GPP only if its scheme funder or scheme strategist is also the provider of the GPP.—(Torsten Bell.)

This amendment would mean that regulations would set out the relationship that must exist between the GPP and other group personal pension schemes, or relevant Master Trusts, for their assets to be pooled for the purposes of gaining approval under the new section 28B of the Pensions Act 2008.

Amendment proposed: 16, page 43, line 38, leave out from beginning to end of line 27 on page 46.—(James Wild.)

This amendment would remove the ability of the Government to set mandatory asset allocation targets for certain pension schemes, specifically requiring investments in UK productive assets such as private equity, private debt, and real estate.

Question put, That the amendment be made. \p UNKNOWN: The House divided: Ayes 143, Noes 304.

Question accordingly negatived.

Amendment proposed: 15, page 46, line 9, leave out from “Before” to the end of the subsection and insert

“implementing the first set of regulations under subsection (1) the Secretary of State must—

(a) prepare and publish a report regarding—

(i) what barriers pension funds, based in the United Kingdom, are facing that are preventing them from investing back into the United Kingdom due to—

(A) legislation introduced after The Pensions Act 1995;

(B) regulations introduced by the Financial Conduct Authority, Prudential Regulation Authority, HM Treasury, or Bank of England;

(C) cultural and market behaviours;

(ii) how financial interests of members of relevant Master Trusts and group personal pension schemes would be affected by the proposed regulations;

(iii) what effects the proposed measures could be expected to have on economic growth in the United Kingdom;

(iv) any other matters the Secretary of State considers appropriate; and

(b) respond to any recommendations or issues raised in the report.”—(James Wild.)

This amendment prevents use of the reserved mandation powers in this Bill until the Government produces a report on the reasons why the powers are needed and the effects of the use of the powers and resolves any issues raised in the report.

Question put, That the amendment be made. \p UNKNOWN: The House divided: Ayes 154, Noes 303.

Question accordingly negatived.

Amendments made: 50, page 48, line 17, after “28A” insert “or 28B”.

This amendment adds a missing cross reference.

Amendment 51, page 51, line 22, leave out “Regulator” and insert “Regulatory Authority”.

This amendment clarifies that the reference in the new section 28J(2)(a) of the Pensions Act 2008 is to the Regulatory Authority (as defined by regulations under the new section 99(2) of that Act).

Amendment 52, page 52, line 31, leave out “they” and insert

“the provisions mentioned in paragraphs (a) and (b)”.—(Torsten Bell.)

This amendment clarifies that transition pathway relief will be repealed five years after the relief first becomes available. \p UNKNOWN: Amendment made: 53, page 53, line 33, after “the” insert “Pensions”.—(Torsten Bell.)

This amendment clarifies that the reference to the Regulator is to the Pensions Regulator. \p UNKNOWN: Amendment made: 54, page 72, line 35, leave out subsection (6).—(Torsten Bell.)

This amendment removes a redundant interpretation provision. \p UNKNOWN: Amendments made: 55, page 105, line 7, after “a” insert “GB”.

This is a drafting correction to clarify that clause 100(3) is only about GB pension schemes.

Amendment 56, page 105, line 18, at end of line insert—

“( ) References to non-compliance with the requirements of paragraph (2)(a) and (b) of regulation 42 include non-compliance with the requirement in either paragraph (2)(a) or (2)(b) (as well as with both requirements).”

The amendment confirms that the phrase “non-compliance with the requirements of paragraph (2)(a) and (b) of regulation 42” covers failure to comply with either or both of those requirements. This deals with the possibility that the scheme actuary for a GB scheme was notified of a proposed alteration to the rules (so that paragraph 42(2)(a) was complied with)) without the confirmation required by paragraph 42(2)(b) being given.

Amendment 57, page 105, line 33, leave out “a” and insert “the”.

This is a drafting correction to secure consistency in the way subsection (7) refers back to things mentioned in subsection (6). It should refer to “the alteration”(as well as “the scheme”) because subsection (7) is explaining what counts as “positive action” in relation to the alteration mentioned in subsection (6)(c).

Amendment 58, page 105, line 40, leave out from beginning of line to “which” in line 42 and insert—

“(b) notifying any members of the scheme in writing (in consequence of the trustees or managers being of the view mentioned in subsection (6)(c)) to the effect that the trustees or managers are taking (or have taken) any other step in relation to the administration of the scheme”.

The amendment applies where the trustees or managers of a GB scheme, after deciding that an alteration is void for non-compliance with regulation 42(2)(a) and (b), take any step in the administration of the scheme that has (or will have) the effect of altering payments to beneficiaries. Under the amended subsection (7)(b) such a step will only be “positive action” (for the purposes of subsection (6)(c)) if they notify beneficiaries that they are taking or have taken the step. If that happens the alteration in question is not a potentially remediable alteration and so is ineligible for retrospective validation under clause 101 or 102.

Amendment 59, page 106, leave out lines 5 to 13 and insert—

“(a) has, before this section comes into force, been determined by the court in qualifying legal proceedings,

(b) was in issue on or before 5 June 2025 in qualifying legal proceedings, but has been settled by agreement between the parties at any time before this section comes into force, or

(c) was in issue on or before 5 June 2025 in qualifying legal proceedings and remains in issue in those proceedings when this section comes into force.

(9) In subsection (8) “legal proceedings” means proceedings for the determination of a dispute that have been brought before a court in the United Kingdom; and such proceedings are “qualifying legal proceedings” if —

(a) they will determine a dispute as to the rules of the scheme, and

(b) the parties are (or include)—

(i) the trustees or managers of the scheme, and

(ii) one or more members or other beneficiaries of the scheme (or a person acting on behalf of one or more members or other beneficiaries).”—(Torsten Bell.)

Under clause 100(8) a purported alteration of a GB scheme is outside the scope of remediation under clauses 101 and 102 if its validity is or has been in issue in legal proceedings in circumstances specified in any of paragraphs (a) to (c). The new subsection (9) clarifies the proceedings which are to count for this purpose: proceedings before a UK court the parties to which are or include both the trustees or managers of the scheme in question and beneficiaries or their representative. The terms used in subsection (9) are intended to have their usual meaning in the law of England and Wales, or Scotland so that, for example, proceedings before a tribunal or proceedings on a complaint to an ombudsman would not count. \p UNKNOWN: Amendments made: 60, page 106, line 17, leave out “scheme other than one” and insert

“GB scheme other than a potentially remediable alteration”.

This is a drafting amendment. It clarifies that the clause is only about GB pension schemes and corrects a potentially ambiguous reference in clause 101(1). The word “one” was intended to refer to a potentially remediable alteration, rather than to a GB scheme.

Amendment 61, page 106, line 37, leave out “under” and insert “as mentioned in”.

This is a drafting amendment for consistency with the language of subsection (5) of clause 101. It is not necessary for the actuary receiving a request to consider whether it was made “under” subsection (3), especially if received before subsection (3) is in force. Subsection (4) already makes clear that a request of the kind mentioned in subsection (3) can be made (and if made can be dealt with) before clause 101 is in force.

Amendment 62, page 106, line 39, that paragraph (a) of subsection (4) be transferred to the end of line 3 on page 107.

The amendment would transpose the two paragraphs of clause 101(4) to reflect the fact that consideration of the information available should happen first. If the actuary thinks there is missing information they can address that before going on to consider whether to give the confirmation mentioned in subsection (3)(b).

Amendment 63, page 107, line 18, at end insert—

“(8) This section has effect, in relation to a potentially remediable alteration purportedly made to a public service scheme, as if the references in subsections (3) and (7) to the trustees or managers of the scheme were references to the responsible authority.

(9) In subsection (8)—

“public service scheme” means—

(a) a pension scheme established under section 1 of the Public Service Pensions Act 2013, or

(b) a statutory pension scheme which is connected with a scheme referred to in paragraph (a) (and for this purpose “statutory pension scheme” and “connected” have the meanings given in that Act);

“responsible authority” , in relation to a public service scheme, means the authority that is the responsible authority for the scheme by virtue of section 2 of, and Schedule 2 to, that Act.”—(Torsten Bell.)

The amendment ensures that in the case of a public service pension scheme, things falling to be done by or to the trustees or managers of the scheme under clause 101(3) or (7) are to be done by or to the responsible authority for the scheme. The responsible authorities for public service schemes in Great Britain are identified in Schedule 2 to the Public Service Pensions Act 2013. \p UNKNOWN: Amendments made: 64, page 107, line 23, leave out “scheme” and insert

“GB scheme, or a part of a GB scheme,”.

It is possible in certain circumstances for a part of a GB scheme to be wound up on its own. This would include a case where the part in question is a section of a segregated pension scheme. The amendment would secure that clause 102 applies to a potentially remediable alteration to a part of a GB scheme (as well as a GB scheme as a whole) that has been wound up before the clause comes into force.

Amendment 65, page 107, line 25, leave out “scheme” and insert

“GB scheme, or a part of a GB scheme,”

The amendment would ensure that clause 102 applies where the Board of the Pension Protection Fund has become responsible for part only of a GB pension scheme.

Amendment 66, page 107, line 29, after “a” insert “GB”. —(Torsten Bell.)

This is a drafting amendment to clarify that the provision refers only to a GB pension scheme. \p UNKNOWN: Amendments made: 67, page 108, line 36, at end insert—

“(5A) References to non-compliance with the requirements of paragraph (2)(a) and (b) of regulation 42 include non-compliance with the requirement in either paragraph (2)(a) or (2)(b) (as well as with both requirements).”

The amendment confirms that the phrase “non-compliance with the requirements of paragraph (2)(a) and (b) of regulation 42” covers failure to comply with either or both of those requirements. This deals with the possibility that the scheme actuary for an NI scheme was notified of a proposed alteration to the rules (so paragraph 42(2)(a) was complied with)) without the confirmation required by paragraph 42(2)(b) being given.

Amendment 68, page 109, line 13, leave out “a” and insert “the”.

This is a drafting correction to secure consistency in the way subsection (7) refers back to things mentioned in subsection (6). It should refer to “the alteration” (as well as “the scheme”) because subsection (7) is explaining what counts as “positive action” in relation to the alteration mentioned in subsection (6)(c).

Amendment 69, page 109, line 20, leave out from beginning of line to “which” in line 22 and insert—

“(b) notifying any members of the scheme in writing (in consequence of the trustees or managers being of the view mentioned in subsection (6)(c)) to the effect that  the trustees or managers are taking (or have taken) any other step in relation to the administration of the scheme”.

The amendment applies where the trustees of managers of an NI scheme, after deciding that an alteration is void for non-compliance with regulation 42(2)(a) and (b), take any step in relation to the administration of the scheme that has (or will have) the effect of altering payments to beneficiaries. The amendment secures that such a step will only be “positive action” (for the purposes of subsection (6)(c)) if they notify beneficiaries that they are taking or have taken the step. Where that happens, the alteration in question is not a potentially remediable alteration and so is ineligible for retrospective validation under clause 101 or 102.

Amendment 70, page 109, leave out lines 28 to 36 and insert—

“(a) has, before this section comes into force, been determined by the court in qualifying legal proceedings,

(b) was in issue on or before 5 June 2025 in qualifying legal proceedings, but has been settled by agreement between the parties at any time before this section comes into force, or

(c) was in issue on or before 5 June 2025 in qualifying legal proceedings and remains in issue in those proceedings when this section comes into force.

(9) In subsection (8) “legal proceedings” means proceedings for the determination of a dispute that have been brought before a court in the United Kingdom; and such proceedings are “qualifying legal proceedings” if—

(a) they will determine a dispute as to the rules of the scheme, and

(b) the parties are (or include)—

(i) the trustees or managers of the scheme, and

(ii) one or more members or other beneficiaries of the scheme (or a person acting on behalf of one or more members or other beneficiaries).”—(Torsten Bell.)

Clause 104(8) secures that a purported alteration of an NI scheme is outside the scope of remediation under clauses 105 and 106 if its validity is or has been in issue in legal proceedings in circumstances specified in any of paragraphs (a) to (c). The amendment is intended to clarify which legal proceedings are to count for this purpose, namely proceedings for the determination of a dispute before a court in the United Kingdom, the parties to which are or include both the trustees or managers of the scheme in question and beneficiaries under the scheme or a person representing beneficiaries. The terms used in the new subsection (9) are intended to have their usual meaning in the law of Northern Ireland domestic law, so that proceedings before a tribunal or on a complaint to an ombudsman would not count as “legal proceedings”. \p UNKNOWN: Amendments made: 71, page 109, line 40, leave out “one” and insert “a potentially remediable alteration”.

This is a drafting amendment which would correct a potentially ambiguous reference in clause 105((1). The word “one” was intended to refer to a potentially remediable alteration rather than to an NI scheme.

Amendment 72, page 110, line 18, leave out “under” and insert “as mentioned in”.

This is a drafting amendment for consistency with the language of subsection (5) of clause 105. It is not necessary for the actuary receiving a request to consider whether it was made “under” subsection (3), especially if received before subsection (3) is in force. Subsection (4) already makes clear that a request of the kind mentioned in subsection (3) can be made (and if made can be dealt with) before clause 101 is in force.

Amendment 73, page 110, line 20, that paragraph (a) of subsection (4) be transferred to the end of line 25.

The amendment would transpose the two paragraphs of clause 105(4) to reflect the fact that consideration of the information available should happen first. If the actuary thinks there is missing information they can address that before going on to consider whether to give the confirmation mentioned in subsection (3)(b).

Amendment 74, page 110, line 28, leave out “a” and insert “an NI”.

This is a drafting amendment to clarify that the provision refers only to an NI pension scheme.

Amendment 75, page 110, line 30, leave out “Chapter 3 of”.

The amendment make a drafting correction. The term “assessment period” is defined by Article 116 of the Pensions (Northern Ireland) Order 2005 for the purposes of Part 3 of the Order, and not just for Chapter 3 of that Part.

Amendment 76, page 110, line 42, at end insert—

“(8) This section has effect, in relation to a potentially remediable alteration purportedly made to a public service scheme, as if the references in subsections (3) and (7) to the trustees or managers of the scheme were references to the responsible authority.

(9) In subsection (8)—

“public service scheme” means—

(a) a pension scheme established under section 1 of the Public Service Pensions (Northern Ireland) Act 2014 (2014 c. 2), or

(b) a statutory pension scheme which is connected with a scheme referred to in paragraph (a) (and for this purpose “statutory pension scheme” and “connected” have the meanings given in that Act);

“responsible authority”, in relation to a public service scheme, means the authority that is the responsible authority for the scheme by virtue of section 2 of and Schedule 2 to that Act.”—(Torsten Bell.)

The amendment ensures that in the case of a public service pension scheme, things falling to be done by or to the trustees or managers of the scheme under clause 105(3) or (7) are to be done by or to the responsible authority for the scheme. The responsible authorities for public service schemes in Northern Ireland are identified in Schedule 2 to the Public Service Pensions (Northern Ireland) Act 2014. \p UNKNOWN: Amendments made: 77, page 111, line 5, leave out “a scheme” and insert

“an NI scheme, or a part of an NI scheme,”.

It is possible in certain circumstances for a part of an NI pension scheme to be wound up on its own. This would include a case where the part in question is a section of a segregated pension scheme. The amendment would secure that clause 106 applies to a potentially remediable alteration to a part of an NI scheme (as well as an NI scheme as a whole) that has been wound up before the clause comes into force.

Amendment 78, page 111, line 7, leave out “a scheme” and insert

“an NI scheme, or a part of an NI scheme,”.

The amendment clarifies that clause 106(1)(b) applies only to an NI pension scheme. It would also ensure that clause 106 applies where the Board of the Pension Protection Fund has become responsible for part only of an NI pension scheme.

Amendment 79, page 111, line 11, leave out “a” and insert “an NI”.—(Torsten Bell.)

This is a drafting amendment to clarify that the provision refers only to an NI pension scheme. \p UNKNOWN: Amendments made: 80, page 111, line 20, leave out “A Northern Ireland Department” and insert

“The Department for Communities in Northern Ireland”.

The amendment identifies the Northern Ireland department which is to exercise the powers conferred by subsection (1) of clause 107.

Amendment 81, page 111, line 27, at end insert—

“( ) Regulations under subsection (1) are subject to negative resolution.”

The amendment makes provision corresponding to clause 103(3) for Northern Ireland. Provision corresponding to clause 103(6) is proposed by Amendment 83 in place of the current clause 107(4) which applied to both the regulation-making powers in clause 107.

Amendment 82, page 111, line 28, leave out “A Northern Ireland Department” and insert

“The Department for Communities in Northern Ireland”.

The amendment identifies the Northern Ireland department which is to exercise the powers conferred by subsection (3) of clause 107.

Amendment 83, page 111, line 31, leave out subsection (4) and insert—

“(4) Regulations under subsection (3) may amend Northern Ireland legislation, or an Act of Parliament, passed or made before or in the same Session as this Act.

(4A) Regulations under subsection (3) which contain provision made under

subsection (4)—

(a) must be laid before the Northern Ireland Assembly after being made,

(b) take effect on such date as may be specified in the regulations, and

(c) cease to have effect on the expiry of the period of six months beginning with the day on which they take effect, unless the regulations have been approved during that period by resolution of the Assembly.

Paragraph (c) is without prejudice to the validity of anything done under the regulations or to the making of new regulations.

(4B) Regulations under subsection (3) which do not contain provision made under subsection (4) are subject to negative resolution.

(4C) In this section “subject to negative resolution” has the meaning given by section 41(6) of the Interpretation Act (Northern Ireland) 1954.”

The amendment secures that regulations under clause 107(3) can amend primary legislation. Regulations which include provision doing that will need to be approved by resolution of the Northern Ireland Assembly within six months from being made. Otherwise, the regulations will expire at the end of that period.

Amendment 84, page 111, line 34, leave out “A Northern Ireland Department” and insert

“the Department for Communities in Northern Ireland”.—(Torsten Bell.)

The amendment is consequential on amendments 80 and 82. \p UNKNOWN: Amendment made: 85, page 119, line 24, leave out “105” and insert “104”.—(Torsten Bell.)

The amendment corrects an error in subsection (2) of clause 116 as inserted in Public Bill Committee. Clause 104 should extend only to Northern Ireland, in addition to clauses 105 to 107. \p UNKNOWN: Amendments made: 86, page 120, line 29, leave out from “force” to “the” in line 30 and insert “on”.

The amendment would alter the commencement date for Chapter 1 of Part 4 (Validity of certain alterations to salary-related contracted-out pension schemes) to the date of Royal Assent to the Bill.

Amendment 87, page 120, line 30, at end insert—

“(8A) Chapter 1A of Part 4 comes into force on such day as the Secretary of State may by regulations appoint.”

This amendment provides that the new clauses inserted by NC31, NC32 and NC33 (which are intended to form a new Chapter in Part 4 of the Bill) come into force on such day as the Secretary of State may by regulations appoint.

Amendment 88, page 120, line 37, at end insert—

“(d) section (Funding of the Board of the Pension Protection Fund)—

(i) comes into force on 1 April 2026, or,

(ii) if this Act is passed after that date, is treated as having come into force on that date;”.

This amendment provides that the funding change for the Board of the Pension Protection Fund introduced by NC35 has effect from 1 April 2026.

Amendment 89, page 120, line 37, at end insert—

“(e) section (Funding of the Ombudsman for the Board of the Pension Protection Fund) is treated as having come into force on 1 April 2007.”—(Torsten Bell.)

This amendment provides that the funding change for the Ombudsman for the Board of the Pension Protection Fund introduced by NC30, which has in practice been in operation since 1 April 2007, is treated as having had effect since that date.

Third Reading

King’s consent signified. \p Torsten Bell: I beg to move, That the Bill be now read the Third time.

Pensions matter. They are the means by which we deliver on some of the biggest promises we have made to the public: that the prospect of a comfortable retirement, with the option of leisure—hon. Members may choose not to take it—in later life, is there for the many, not just the few. We need not only to encourage people to save, but to ensure that those savings work as hard as possible for them to deliver that comfortable retirement. That is ultimately what this occasionally technical Bill is all about. Better returns mean better retirements, and there are few things more important than that.

The Bill adds wind to the sails of some of the major changes already under way in our pension landscape. Most importantly, it pushes ahead with the shift towards larger, better-governed schemes, better able to access and deliver returns for savers and to invest in a wider range of assets. It introduces a new value for money framework, so that schemes are judged on performance and service, not just cost. It removes one of the big barriers to people engaging with their pensions by consolidating small, inactive pension pots. It delivers reforms to ensure people are building up a pension, not just a savings pot, with simple default pensions that do not require each of us to become a financial expert as we approach retirement.

For defined benefit schemes, the Bill strengthens the local government pension scheme, puts more trustees in the driving seat for managing scheme surpluses, and  addresses the lack of pre-1997 indexation within the PPF and the FAS. Those are real improvements shaped by constructive debate and detailed scrutiny in this place and across the pension industry.

I again thank Members from all parts of the House for their contributions and I thank the Clerks for taking us through Committee. I also thank the Bill team—Jo, Amanda, Mike, James, Sagar, Saadia and Steve—and the many officials across DWP and the Treasury who have worked behind the scenes to support the Government in bringing forward this important legislation. I appreciate that it is not a short Bill. The PPF, the Financial Conduct Authority and the Pensions Regulator have also played important roles for which I am grateful. I commend all of them, and this Bill, to the House. \p Helen Whately: As this Bill nears the end of its journey through our House, I take a moment to acknowledge some of the people who have played their part, whether that is former Pensions Ministers, including my right hon. Friend the Member for Sevenoaks (Laura Trott), the former hon. Member for Hexham, my hon. Friend the Member for Wyre Forest (Mark Garnier), who cannot be with us today, or my hon. Friend the Member for South West Devon (Rebecca Smith), who also cannot be here today. My hon. Friend the Member for North West Norfolk (James Wild) did such a brilliant job speaking earlier this afternoon. I also thank the hard-working members of the Bill Committee, including my hon. Friend the Member for Mid Leicestershire (Mr Bedford). Many civil servants will have worked on this Bill and pensions experts will have contributed, and I thank them all for their hard work and expertise. May I also finally offer congratulations to the current Pensions Minister, the lucky one who gets to be here to see this Bill off to the other place?

We on the Conservative Benches do not agree with all of the Bill, but there is a lot in it that we do welcome, particularly the parts that the Minister inherited from us, including the consolidation of fragmented pension pots, the introduction of the value for money framework and the pensions dashboard. Those will help people to manage their pension savings and get better returns. We also welcome the Government’s amendment of the Bill, reflecting our new clause, to index pre-1997 pensions, for which there was significant consensus across the House. That will provide some dignity for pensioners who have seen their pensions eroded over the years, and we hope that the Government continue to work with campaign groups to see that through. I also thank my right hon. Friends the Members for Herne Bay and Sandwich (Sir Roger Gale) and for Hereford and South Herefordshire (Jesse Norman) for their representations on that.

The Bill also has some serious flaws. Nestled within the sensible reforms that the Government inherited is a power that no Government should wield: the power to mandate how pension funds invest. Today, the job of a pension fund manager is to make the best possible decisions for their fund members about where to invest. Their sole objective is the interests of those members. That is their legal duty, and mandation would change that, because mandation means the Government will be able to tell pension funds how to invest their assets. We  should not for a minute underestimate the significance of that. Ministers have insisted it is merely a backstop and a tool they hope never to use, but a threat made just in case is still a threat, and pension trustees know it. I say to the Pensions Minister that a Minister should always consider the worst thing that someone else might do in their position—in essence, “I am not a bad man, but what might a bad man do?” He might be confident that he would not abuse the power, but what if someone else had it?

Those in the pensions sector do not support this plan. Earlier in the year the Minister told them to “chillax”. He may be intensely relaxed, but I must say to him that he is also intensely wrong. Trustees are the custodians of people’s life savings. They are not there to carry out manifesto pledges or pet projects, and the Minister should not put himself or any future pensions Minister in a position to tell them to do so.

Instead of forcing pension funds to invest in the UK, Ministers should ask why they have not been investing and then do something about that. Our amendment 15 gave them the opportunity to diagnose these problems and resolve them, but, as we have just seen, they voted it down. In any event, they should stop making Britain a worse place in which to do business, ramping up taxes on employment, slapping on red tape, and briefing out bad Budget news for months in advance to kill confidence in every sector of the economy.

As my hon. Friend the Member for North West Norfolk (James Wild) said earlier, our other concern with the Bill is the relationship between scale and innovation. We agree with the need for scale, but the Government should avoid blocking the emergence of new entrants and the scaling up of existing smaller players.

Finally, there is the question of pension adequacy. While the Bill should help people to manage their pension savings and boost their returns, it falls short when it comes to tackling the serious problem of people under-saving for later life. Millions of people simply are not saving enough for old age. The Government should be acting now in this regard, rather than delaying the next phase of the pensions review and attacking pension savings at every turn. First they came for pensioners’ winter fuel payments, then they came for self-invested personal pensions, and last week they came for salary sacrifice—and that was not a small tweak. The cap on salary sacrifice will net the Treasury nearly £5 billion of extra tax revenue in 2029-30—money that would otherwise have gone into people’s pensions.

We have made our points, argued our position and put amendments to a vote, so we will not be voting against the Bill on Third Reading. However, I urge the Government to listen to the wise and the many expert words that will be spoken when it is debated in the other place, and to use that opportunity to fix it. \p Kirsty Blackman: I figured that, as I had only about 17 minutes in which to speak on Report, the House deserved to hear from me again on Third Reading, but I shall be very brief in expressing my views and those of my hon. Friends.

Members spoke earlier about people’s understanding of pensions, and I continue to have concerns about people’s understanding of defined contribution schemes.  People who are given a figure for how much money is in their defined contribution scheme are often confused about what that will actually mean when they hit retirement. Those schemes are very different from defined benefit schemes, and, given the massive increase in the number of people investing in defined contribution schemes rather than defined benefit schemes, those issues will continue unless an incredible amount of education is provided so that people can understand what they might receive in their pensions, rather than just the amount in the total pot.

The Minister has made a number of changes to the Bill that I appreciate, not least the pre-1997 indexation for the Pension Protection Fund. The fiduciary duty announcement that he made today is, I think, extremely helpful in clarifying for trustees what their objectives are. He also mentioned that the Association of British Insurers had come up with an agreement. In my experience of serving on a significant number of Bill Committees, it is very unusual for so many changes to be made. I appreciate the fact that the Committee members were listened to, and that some of the concerns raised by Members in all parts of the Committee have been tackled during the Bill’s progress. I have already raised concerns about the short notice that we had for some of the amendments and new clauses and the fact that we were not properly able to scrutinise the Government changes, both in Committee on Report.

Finally, let me thank Matt and Fergus, who helped me with some of this. We rarely see pension Bills presented, and I would love to see another—shortly, probably. Given that the Minister has made commitments in relation to fiduciary duty, and given that he said he expected such a measure to appear in primary legislation with guidance to follow, I assume that a Bill will follow those commitments. I also think that the adequacy review may—hopefully—kick up some requirements for legislation.

This House should get used to talking about pensions. As the generations shift, the state pension will become a smaller percentage of what people rely on in retirement, and auto-enrolment and defined contribution schemes mean that significantly more people will rely on private pensions. Ensuring that they have the best possible outcomes for retirement is something that all Members of the House can support, and we need to have a legislative framework that keeps pace with how people are actually investing for the future, rather than one that reflects how people invested 20 or 30 years ago.

As the Minister will be aware, I would be delighted to debate more pensions Bills as they come forward. We will do our best to provide cross-party support wherever we can.

Bill read the Third time and passed. \p Nusrat Ghani: With the leave of the House, we shall take motions 3 to 5 together.

Motion made, and Question put forthwith (Standing Order No. 118(6)), \p UNKNOWN: That the draft Financial Services and Markets Act 2023 (Prudential Regulation of Credit Institutions) (Consequential Amendments) Regulations 2025, which were laid before this House on 20 October, be approved.

That the draft Financial Services and Markets Act 2000 (Regulated Activities) (ESG Ratings) Order 2025, which was laid before this House on 27 October, be approved. \p UNKNOWN: That the draft Heat Networks (Market Framework) (Great Britain) (Amendment) Regulations 2025, which were laid before this House on 30 October, be approved.—(Gregor Poynton.)

Question agreed to. \p UNKNOWN: [Relevant documents: 247th Report of the Ecclesiastical Committee, Armed Forces Chaplains (Licensing) Measure; Abuse Redress Measure, HC 1453.]

Motion made, and Question put forthwith (Standing Order No. 118,(6)),

That the Armed Forces Chaplains (Licensing) Measure (HC 1454), passed by the General Synod of the Church of England, which was laid before this House on 11 November, be presented to His Majesty for his Royal Assent in the form in which it was laid before Parliament.—(Marsha de Cordova.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

That the Abuse Redress Measure (HC 1455), passed by the General Synod of the Church of England, which was laid before this House on 11 November, be presented to His Majesty for his Royal Assent in the form in which it was laid before Parliament.—(Marsha de Cordova.)

Question agreed to. \p Sharon Hodgson: On the eighth day of the UN’s 16 days of activism against gender-based violence, I rise to present a petition on pornography on behalf of Washington and Gateshead South constituents. Pornography has never been more accessible than it is today, and we know that what is viewed online does not stay online. We therefore must ensure that safeguards are in place, so that those participating are safe, and that we protect the influence that it has on the younger generation, who watch it and then go on to believe that the violence they see in pornography is normal.

The petitioners therefore request that the House of Commons urge the Government to extend safeguards applied to pornography offline to pornography distributed online, to legally require all pornography websites accessed from the UK to verify the age and permission of every individual featured on their platform, and to give performers the right to withdraw their consent at any time to the continued publication of pornography in which they appear.

Following is the full text of the petition:

[The petition of residents of the constituency of Washington and Gateshead South,

Declares that pornography use is fuelling sexual violence; violence against women is prolific in mainstream pornography; and sexual coercion is inherent to the commercial production of pornography.

The petitioners therefore request that the House of Commons urge the Government to extend safeguards applied to pornography offline to pornography distributed online; and to legally require all pornography websites accessed from the UK to verify the age and permission of every individual featured on their platform—and give performers the right to withdraw their consent at any time to the continued publication of pornography in which they appear.

And the petitioners remain, etc.]

[P003139] \p Sarah Russell: I rise to present a petition on Sunday rail services in Congleton. In presenting this petition, I thank councillors from the progressive coalition on Congleton town council, Richard Eadie and the Congleton Sustainable Travel group for acquiring the relevant signatures.

The petitioners request the House of Commons to urge the Department for Transport and the independent regulator, the Office of Rail and Road, to require a Sunday train service for Congleton of at least six trains each way between Stoke and Manchester, facilitated by a more equitable share of the Northern train crew resource and a requirement, at least in the interim, for certain CrossCountry trains to make an additional stop at Congleton throughout the day on Sundays; and to confirm and commit to a date when a sufficiently robust seven-day timetable will resume for Congleton.

Following is the full text of the petition:

[The petition of residents of the United Kingdom,

Declares that Congleton has been without a Sunday train service for over a year; further that this lack of Sunday trains makes weekend trips from our local station of Congleton all but impossible; further that for a town the size of Congleton, which is rapidly expanding, the lack of a full 7 day per week timetable is not an acceptable level of service; and that this has continued for far too long; and notes that CrossCountry trains could make an additional stop at Congleton throughout the day on Sundays, causing the passengers on those trains little inconvenience while at the same time increasing passenger numbers on our train network.

The petitioners therefore request the House of Commons to urge the Department for Transport and the independent regulator, the Office of Rail and Road, to require a Sunday train service for Congleton of at least six trains each way between Stoke and Manchester, facilitated by a more equitable share of the Northern train crew resource and a requirement, at least in the interim, for certain CrossCountry trains to make an additional stop at Congleton throughout the day on Sundays, and to confirm and commit to a date when a sufficiently robust 7 day timetable will resume for Congleton.

And the petitioners remain, etc.]

[P003141] \p UNKNOWN: Motion made, and Question proposed, That this House do now adjourn.—(Gregor Poynton.) \p Charlotte Cane: I draw Members’ attention to my entry in the Register of Members’ Financial Interests as a district councillor for East Cambridgeshire.

The outline business case for the Ely area capacity enhancement scheme shows that for every £1 invested, there will be a return of £4.89—so you may wonder, Madam Deputy Speaker, why we need a half-hour debate on what is so obviously a great scheme. Yet successive Governments have failed to deliver the scheme. There have been feasibility studies, consultations and task groups aplenty; funding was even promised just in time for the 2024 election, but we could all see at the time that the many promised schemes totalled far more than the money available, so I was not surprised when the incoming Labour Government acknowledged that the outgoing Conservative Government had not put funding in place for the project. The sum of £500 million is a lot of money to find, but it would deliver almost a quarter of a billion pounds in return, so I hope that the Government will commit to the funding soon.

The outline business case was submitted in March 2022, after which progress was held at a red signal, where it remains to this day. I was disappointed that the Ely junction project was not one of the projects progressed in the spending review, but I have been heartened by the Department of Transport’s responses to my written questions, in which Ministers recognise the undeniable benefits of the scheme. The Ely area capacity enhancement scheme would upgrade the railway to allow more trains to run through Ely, to improve connectivity and reliability for passenger services and to meet the demand for more rail freight between the port of Felixstowe, the west midlands and the north. \p Daniel Zeichner: The hon. Member is making an important speech, and I strongly support what she is doing. Would she agree with me that the enthusiasm for East West Rail now makes the case for doing the works on Ely junction even stronger? \p Charlotte Cane: I absolutely agree. This gives us a real opportunity to sort out quite a lot of network issues in Cambridgeshire. I would be delighted if we could resolve them all; that would make a significant difference to rail in the area.

The scheme would support sustainable, long-term economic growth. The upgraded junction would increase resilience in our transport network. There is currently a single lead junction, which means that a failure in that section has the effect of practically stopping all rail traffic. Without the upgrade, if there is a failure, the other Peterborough track keeps working for a while, but the other lines, including Ely’s, quickly fill up with stuck trains. Ely station is beautiful and the staff are great, but it is still frustrating to see the notices of delayed and cancelled trains building up as we wait for our own delayed train. Progressing the upgrade would allow us to strengthen the resilience of this network and mitigate the risk of any future bottlenecks.

The environmental benefit of the Ely junction upgrade is clear. Through upgrading rail freight capacity and increasing the number of journeys possible, we can take tens of thousands of freight journeys off the road and put them on to rail. Fewer lorry journeys mean not only less congestion, but fewer road accidents. Provisional figures for the first six months of this year show that there were 4,116 road casualties who were occupants of lorries—almost one accident involving a lorry every hour—and I am sad to say that 42 of those were fatal. Taking these lorries off the road can only improve safety, given the clear danger to their drivers and other road users. \p Adrian Ramsay: The hon. Lady is making an important case for upgrading Ely junction. Would she agree that alongside that, as per Network Rail’s business case, we need to upgrade the Haughley junction in my constituency, so that we can realise the many benefits of moving freight on to the rails from the port of Felixstowe and through the east to the midlands? \p Charlotte Cane: I agree that Haughley junction is also very important to making the scheme deliver its full potential.

Fewer lorries will also help to protect the crumbling roads in my constituency, which struggle with the wear and tear placed by heavy goods vehicles travelling along them every day. That could save considerable expense in road maintenance and extend the life of those roads. The project is estimated to take 98,000 lorry journeys off the road every single year, and to cut car journeys by 376,000. When that is added to the capacity for more passenger rail services, it is estimated to reduce carbon emissions by 1.7 million tonnes of carbon dioxide over 60 years, and reduce congestion on our roads by 5.6 million hours every year. In the context of the urgent need to protect our environment and planet, that is a substantial impact.

England’s Economic Heartland and Transport East co-produced the “Keeping Trade on Track” document, estimating the upgrade would result in an extra six freight trains per day to and from the port of Felixstowe—the equivalent of over 450 lorries, stretching over six miles every single day. For people who know the area, that is the distance on the A14 from the Quy junction to the east of Cambridge to the M11 junction to the west of Cambridge. I have to say that some mornings it feels like all 450 of them are on that stretch of road in front of me.

On that basis alone, the scheme has strong grounds for approval, but the name of the scheme does not give the full context to show just how important it is not only to Ely, but to the whole UK. If approved, it allows for an additional 2,900 extra freight services operating to and from Felixstowe port every year. Those freight services do not stop in Cambridgeshire. Some 70% of containers go from Felixstowe to the midlands, the north of England and Scotland—and, of course, the other way, too. And that is not all. Expanding capacity through the Ely junction upgrade will free up much needed capacity elsewhere.

Currently, freight trains from Felixstowe use the great eastern main line and north London line to access routes to the north and midlands, using the growing  Thames ports. If Ely junction is approved, the demand for Felixstowe freight trains to use the north London line would be reduced and those would then be available to the London ports. Ely is mentioned in the strategies of Transport for London, Transport for the North and Midlands Connect, showing the benefit the scheme can have for those areas. Transport for the North said that its region will benefit by having access to a rail freight terminal that could result in extra freight trains from the south-east to the north. Transport East has told me it is keen to see improvements, as the project would benefit Norfolk, Suffolk and Greater Essex. England’s Economic Heartland chairs the Ely taskforce, a group of local authorities, industry groups and rail operators, all of whom are desperate to have a clear pathway to the upgrade finally being progressed. \p Steve Barclay: I congratulate the hon. Lady on securing the debate. I very much support the case she is making. Given that the previous Government, in October 2023, did secure funding for this, it is deeply regrettable that the Labour Government have cut it. Does she agree that if we are to unlock the growth potential of Cambridgeshire as a whole and in particular Fenland, and to connect that to Cambridge’s growth potential, we need Manea, March and Whittlesea stations to be better able to connect to the economy in Cambridgeshire? \p Charlotte Cane: I agree. One of the big advantages of the scheme would be twice as many trains on that route. That would be a huge benefit to everyone along the route.

This is a truly national project, with national benefits. Since coming to office, the Government have been very keen to stress their growth credentials and they continue to search for a silver bullet to grow the economy quickly. Ely junction is not a magic bullet, but it can certainly help the Government on their quest. As I said, the scheme has a £4.89 cost to benefit ratio, returning £4.89 in benefits for every £1 invested. But that does not even reflect the full picture and the growth opportunities centred on Cambridge, Peterborough and, as we have heard, the Oxford-Cambridge growth corridor, so the real economic impact is likely to be significantly higher.

Let me give some examples. The Rail Freight Group says that the rail route through Ely is underperforming due to its capacity limitations, and that the upgrade would be an essential first step to achieving a positive outcome for the UK economy. Freightliner says that the junction is one of the principal bottlenecks restricting growth of rail freight volumes from Felixstowe, and that the wider economic benefits will be felt as far as Scotland, the midlands, Wales and the north of England. As I said, this is a truly national project, with national benefits.

England’s Economic Heartland has spoken to the freight industry, which has said that there is significant unmet demand for increased levels of rail freight. Maritime Transport said that it has identified a strong demand from both importers and exporters, which see the environmental benefits in their supply chains using rail over road. The Eastern Powerhouse, chambers of commerce and the east of England all-party parliamentary group have all backed the scheme too. The rail industry, rail  operators, the maritime sector, the freight sector, local government and elected parliamentarians are all backing the scheme—a remarkably strong show of support. We also have hundreds of commuters waiting at stations for trains delayed by faults around Ely junction.

At a time when the Government need to do more to encourage people to use public transport, approving the Ely junction upgrade would stimulate an extra 277,000 rail passenger journeys per year. Network Rail estimates that the proposals would see the doubling of passenger services on the Ely-to-King’s Lynn and Ipswich-to-Peterborough routes. The logic is simple: if we deliver more rail services, passengers will have not only more choice, but more opportunities to travel by rail. A higher-quality, higher-frequency passenger rail service can only encourage more passengers to choose public transport over car journeys, which benefits commuters and the environment.

In previous written questions, I have asked the Department to name a specific sum that it would cost to provide Network Rail with the funding needed to undertake detailed planning for the Ely junction upgrade, but I have not yet received an answer. Can the Minister provide the sum today? Stakeholders are very frustrated that we have to wait until the next spending review in the eternal hope that the scheme will finally be progressed. My constituents have been waiting for 25 years for this project. They, and businesses, have gone through reviews, reports, summaries and investigations, and countless proposals have been produced.

The business case has been made. We know the arguments and the benefits. We also know the financial situation that the Government find themselves in. What my constituents, businesses, and the rail, freight and maritime sectors need is clarity and a clear route forward. Will the Minister commit to asking the Rail Minister for a meeting with Network Rail and me to agree how we can deliver the Ely junction upgrade? At least then we could all be on the same platform, going in the same direction.

I am sure that, deep down, the Government support the scheme; I am confident that they understand its merits. But the Minister needs to understand that the scheme has been in varying states of limbo for 25 years now. The Minister has heard in this debate the support for the scheme from across the House, which shows how important the scheme is to our region. It is time to set Ely junction on track to fulfil the potential we all know it has, and to deliver economic growth for Ely and East Cambridgeshire—and for all the UK. \p Lilian Greenwood: I am grateful to the hon. Member for Ely and East Cambridgeshire (Charlotte Cane) for securing this important debate on the Ely area capacity enhancement programme—EACE. I want to recognise her tireless advocacy on behalf of her constituents, rail passengers and freight operators across the region on a matter that affects many rail users, in one way or another.

As the hon. Lady said, the Ely area plays an essential role in our national rail network. It is a gateway for freight from the port of Felixstowe—one of Britain’s largest container ports—and is a key connector for communities across East Anglia and beyond. The hon. Member is  absolutely right to highlight the constraints at Ely, which limit passenger capacity and hold back the full potential for rail freight growth in the east. Indeed, East Anglia is one of the fastest-growing parts of the country and this Government are extremely ambitious for the future prosperity of the region. Rail will continue to play a vital role in supporting new housing, unlocking jobs and strengthening sustainable freight links. The hon. Lady rightly highlighted the potential environmental benefits of moving freight from road to rail and, indeed, the safety benefits. \p Sam Carling: I thank the hon. Member for Ely and East Cambridgeshire (Charlotte Cane) for securing this debate. As she said, there is a lot of support for this scheme across the political spectrum, and it has been on the books for a very long time—as a good indication, the number of years she just mentioned is longer than I have been alive. Can the Minister confirm that the Government recognise the huge growth that the scheme could unlock not only in my region of Cambridgeshire, but more broadly across the country, and that we therefore want to bring it forward as soon as the financial situation will allow? \p Lilian Greenwood: My hon. Friend is a great champion for growth in his constituency and his region. I can assure him that this scheme is in the pipeline of future rail enhancements and will be reconsidered as further funding becomes available. \p Steve Barclay: The Minister seems to be citing a lack of funding as the reason for the scheme not being funded, but when I spoke to the Rail Minister in his previous role as chair of Network Rail, it was a priority for Network Rail. Can the Minister confirm from the Dispatch Box that schemes with a worse benefit-cost ratio were funded in the spending review? In other words, did the Government choose to fund transport schemes with a lower BCR over funding the Ely junction? \p Lilian Greenwood: As I am sure the right hon. Gentleman knows, there are a number of considerations that go into making decisions about which schemes go forward. \p Steve Barclay: What about the BCR? \p Lilian Greenwood: The BCR is, of course, one of the things that is considered, but wider strategic issues are always brought to bear. It is just one of the tests that is considered. I would not for a moment suggest that this scheme does not have a good BCR.

Improvements to East Anglia’s rail network will benefit not only local passengers, but communities and businesses across the midlands and the north. I commend the collaboration shown by local partners, councils, industry and residents who have come together to present a united voice behind the scheme.

However, it is important that we address the funding position directly. On 8 July, the Secretary of State updated Parliament on which road and rail infrastructure schemes will progress following the spending review; as the hon. Member for Ely and East Cambridgeshire is aware, the EACE programme has unfortunately not been allocated funding at this stage.

As the hon. Lady rightly noted, the previous Government committed to a range of major schemes in their October 2023 Network North announcement, knowing full well, with a general election on the horizon, that there was no funding to deliver them. That, unfortunately, included the Ely area capacity enhancement. I recognise and share the frustration that has caused locally, and this Government are determined to ensure transparency regarding the future of this programme. We are committed to delivering infrastructure with the greatest benefit to passengers, freight and the wider economy as quickly as possible and within a fully funded and deliverable programme.

I appreciate that it is disappointing for the hon. Lady and the many supporters of this scheme, but it is not the end of the story—I want to be absolutely clear on that point. We fully recognise the strategic importance of the Ely area capacity enhancement programme, which is why, as I said in response to my hon. Friend the Member for North West Cambridgeshire (Sam Carling), we remain committed to supporting its place in the pipeline of future rail enhancements, and the programme will be kept under active review and considered carefully as further funding becomes available.

As the hon. Member for Ely and East Cambridgeshire pointed out, the scheme has a strong business case. Indeed, EACE would increase freight capacity from 36 to 42 daily trains to and from the port of Felixstowe, which would deliver huge benefits including supporting the economy, cutting emissions, reducing HGV congestion on roads like the A14 and strengthening our supply chains; the passenger benefits would also be substantial, delivering more reliable journeys and supporting growth across the region from Norwich and Ipswich to Cambridge and beyond.

I want to recognise, as the hon. Lady set out, the powerful and united voice of local and regional stakeholders, including Transport East, England’s Economic Heartland, local authorities, ports and freight operators, and indeed MPs from across the political spectrum. My hon. Friend the Member for Cambridge (Daniel Zeichner) brings great knowledge and experience to this debate. The hon. Member for Ely and East Cambridgeshire herself has been vocal in championing this investment, and of course that local support strengthens the case for future funding.

The Rail Minister recently met the Mayor of Cambridgeshire and Peterborough to discuss how the Ely programme could support housing and economic development in the east of England, and the potential for raising third-party funding to support the scheme. Given the strong local support for the scheme, and the real development and growth opportunities it could unlock across the region, it is important that all sources of funding are fully explored. But I am sure the hon. Member for Ely and East Cambridgeshire will recognise that any private finance or alternative funding proposals would need to demonstrate value for money to the public sector.

As the hon. Lady may know, 44 level crossings would need to be upgraded or closed to deliver the increased capacity envisioned by EACE. I note that it has been suggested in the media that the cost of upgrading Ely North junction has ballooned from £25 million in 2012 to almost £500 million, but let me be clear that that is not the case. As one of my officials put it, this is like  comparing apples with deck chairs, as the Ely area capacity enhancement scheme comprises a much wider series of interventions, including upgrades to bridges, signalling and Ely station itself, as well as additional track and the upgrading and closure of level crossings, alongside the Ely North upgrades that were announced in 2012.

That is likely to be one of the most challenging and costly aspects of the scheme, particularly the planning consent, and securing local agreement to ease the delivery of these works on level crossings could radically reduce the cost of the scheme. The Rail Minister has asked the mayor to work with local highways authorities to explore how the required works around level crossings could be simplified or rationalised.

As we have observed, the investment case for EACE is strong. However, no development work has taken place on the scheme since it was closed by the previous Government in 2022. Upgrading the business case, including revised cost estimates, demand forecasts and benefits assessments, would be a positive first step in bringing the programme forward.

The Rail Minister has recently written to the mayor suggesting that he meets the chief executive of Network Rail to discuss how the EACE programme’s business case could be updated, and the mayor’s office would be well placed to co-ordinate other stakeholder engagement with Network Rail on that update. To that end, I encourage the hon. Member for Ely and East Cambridgeshire and other hon. Members to continue engaging with the mayor. It would also be important to time any business case updates to align with the potential release of funding at future spending reviews.

While we consider how best to progress EACE, I reassure the hon. Lady that Cambridgeshire is already benefiting from significant rail investment. The new Cambridge South station is forecast to open in June 2026, improving access to new housing and one of the most important life sciences campuses in the world. The Government have also reaffirmed their commitment to East West Rail serving Cambridge and allocated £2.5 billion of funding for the next stages of the project at the last spending review.

Investment in East West Rail demonstrates Government support for enhanced connectivity across the Oxford-Cambridge corridor, and that project can enable up to 100,000 new homes and is expected to boost the regional economy by £6.7 billion a year by 2050. \p Charlotte Cane: It is wonderful that East West Rail is coming, but my constituents need to be able to get to it in Cambridge, which is why we need the upgrade at Ely junction. \p Lilian Greenwood: The hon. Lady has made a compelling case for Ely junction and the wider Ely area capacity enhancement scheme. It is about ensuring that it is affordable and deliverable, which is precisely why we are keeping it in the pipeline for when further funding is available. We inherited terrible economic pressures and, in the Department for Transport, billions of pounds of schemes that were simply unfunded, which I am afraid is the position with the Ely area capacity enhancement scheme.

Let me finish by thanking the hon. Member again for securing this debate and for the passion with which she continues to champion the Ely area capacity enhancement scheme. I understand the disappointment that she and other stakeholders have expressed following the spending review earlier this year, but I hope that I have reassured her that the Government recognise EACE as a key strategic enhancement, that we see clear value in its future delivery, and that we will continue to work constructively with regional partners as we consider how and when best to take the programme forward.

The case that the hon. Member and others have articulated this evening and on many other occasions will remain central to ensuring that when future funding becomes available, the scheme will be well placed to progress. I look forward to continuing that dialogue and to unlocking the full potential of rail passengers and freight in the Ely area, and indeed wider Cambridgeshire, in the years ahead. My noble Friend the Rail Minister has notified me that he will be happy to meet her to discuss this further.

Question put and agreed to.

House adjourned.