This is the transcript of a speech delivered by the Shadow Secretary of State for Work and Pensions during the Commons debate on the Pension Schemes Bill on April 15, 2026.
Who knew that the Pension Schemes Bill would become so controversial? It is a Bill on which there was so much consensus; a Bill begun by one party in government and now being continued by another; a Bill that could have sailed through Parliament. But no, that was not to be, because the Government had an idea – a bad idea. Labour saw £400 billion-worth of pension funds, the savings built up through years of successful auto-enrolment, and it was tempted.
We can picture Labour Members looking at the pensions piggybank and saying to each other, ‘Just imagine what we could do with that money – we could perhaps put it towards some of the Energy Secretary’s net zero schemes.’ They have taxed the country to the hilt, they cannot bring themselves to make savings on welfare, and they have run the Treasury dry, so now they are coming for pensions.
Labour snuck in the power that we talk about as mandation under the auspices of a backstop to the voluntary Mansion House agreement. Well, well, well. It really did not have to be this way. If only the Pensions Minister had been a little more receptive to suggestions from other parties or from the pension sector itself. It is hard to find anyone who supports his mandation policy.
Pensions UK, the Pensions Management Institute, the Association of British Insurers, Aviva and BlackRock – I could go on – are all against mandation, as are any number of economists and respected voices, from Paul Johnson to Dominic Lawson, and even the Minister’s former colleague Ed Balls. In the other place, noble Lords in their droves have sought to expose this policy for what it is. He should have listened to their debate, as I did, but listening may not be something he likes to do.
He even blocked one respected industry voice, Tom McPhail, on social media when Tom simply called out mandation for what it is: a dangerous power grab by the Government.
Sometimes the Pensions Minister talks about this all as being technicalities, but the fact is that the Government are coming after people’s hard-earned savings, and the public can see it. The Government think it is a pension pot they can mess with. We know that it is people’s own savings. The Government do not know best. The Minister should not just listen to us; he should listen to the noble Lords in the other place.
The Minister has returned to this House after suffering 12 defeats in the other place. That is what happens when a Government put their fingers in their ears. This situation is entirely of the Pensions Minister’s own making, because there is a great deal of common ground here. Across this House, we want pensions policy to move forward.
We have shared ambitions for our pension system, such as boosting pension pots through increased pension scheme scale and a greater focus on returns, rather than minimising costs. We want greater transparency and consumer engagement in the size and performance of pension pots and a system that works better for people with terminal illness. Despite all the consensus, the Minister’s Bill is still far from the finish line.
I have no disagreement with the objectives of the voluntary Mansion House agreement.
On the contrary, I want to see more investment in the UK and higher returns for savers in default pension schemes, and there is widespread support for those objectives, but even the Minister should have realised that he could not get away with saying that the provision is just a backstop to the Mansion House agreement when the mandation power in his Bill was so glaringly different. Back in December last year, I warned him that mandation would not wash, but he did not listen.
That is why I have fought mandation every step of the way, along with the pension sector, my colleagues on the Front Bench and the noble Lords in the other place, who resoundingly rejected it.
The Minister is back here with his tail between his legs, and he has changed his tune from, ‘It’s all fine, nothing to see here’; he reluctantly tabled three amendments last week. I recognise the direction that the Government are trying to move in. They are reining in the power that they are taking, and trying to make it look more aligned with the voluntary Mansion House accord.
The fundamental problem remains unresolved, however, because at its core, the Bill still gives the Government the power to direct the investment of people’s pension savings, and that, as a matter of principle, is wrong.
Pensions belong to savers, not the state. Pension fund trustees are not there to fulfil manifesto commitments or chase political pet projects. They are the custodians of people’s life savings.
The Bill gives the Government the power to force people’s pension savings to be invested in so-called qualifying assets, irrespective of the judgment of pension fund trustees, irrespective of what that could mean for returns and therefore retirement incomes, and irrespective of whether it is in the interests of savers.
The Minister may now point to limiting figures – 10% in qualifying assets and 5% in the UK – and present that as progress from the previously unlimited, undefined power. It is true that this is a little less bad, but let me be clear: if this is wrong in principle, it does not become right in small doses. There is a further problem. Even on its own terms, the drafting of the amendment may well not do what the Government intend. The amendment refers to assets held in default funds of the scheme as a whole.
This may sound technical, but it matters. The Mansion House accord applies only to main default funds; the amendment’s wording goes further. The 10% requirement could apply to a much broader pool of assets, expanding the policy well beyond what the Minister says he intends.
What do we have? A policy that is wrong in principle, unclear in practice and broader than the voluntary agreement it claims to reflect. That goes to the heart of the problem. The Government are trying to turn a voluntary agreement into something it was never meant to be, and the differences between this Bill and the voluntary accord are not minor, but fundamental. The Mansion House accord applied only to its signatories, but this mandation would apply across all default auto-enrolment funds.
The accord was a two-way agreement, with commitments from the sector matched by commitments from the Government, but mandation applies regardless of whether the Government deliver on their side of the bargain.
Most fundamentally, the accord was voluntary. Mandation is not; it will be the law. A voluntary agreement ceases to be voluntary the moment it is backed by even the threat of compulsion. The industry supported a voluntary accord. It has not supported mandation.
The industry wants more investment in the UK and higher returns for savers – as do we, and so, the Government say, do they – but by forcing pension funds to do this, rather than fixing the underlying problems with UK investability, the Government risk lowering returns for savers and therefore their future incomes.
Once the Government have the power of mandation to force investment in the UK, does anyone think they will still be motivated to make the UK a better place to invest in and do business in? Let us just watch as they look for extra taxes that they can slap on businesses or extra red tape that they can tie them up in.
The Minister has told the House that he has no intention of using mandation, and that it is merely a backstop and a reserve, but the Government briefing accompanying their amendments tells a different story. It says what will happen not ‘if’, but ‘when’ the Government use the mandation power. I urge him to look at the wording. That is not the language of a Government who intend to leave a power sitting quietly, unused, on the statute book.
In fact, once this power over pensions rests in the hands of Ministers, it will not sit idle. At every Budget under this Labour Government, as growth flounders, unemployment rises and public finances deteriorate, watch the Chancellor reach for the mandation lever. The Rubicon will have been crossed.
To be clear, if Labour succeeds in forcing this measure through, we will repeal mandation when the Conservatives are back in government, because your pension belongs to you, not the Chancellor.
The Government were defeated so many times in the House of Lords, Madam Deputy Speaker, that I will not test your patience by setting out the arguments on every single one of the amendments, but when it comes to the deeply flawed mandation plan, let us tell the public the truth. Socialists always run out of other people’s money.
First they came for your earnings; then they came for your savings; and now they have come for your pension. The principle at stake here is simple: your pension belongs to you, not the Government. It is not a piggy-bank for Ministers to raid when they run out of money. Conservatives see the world differently. Your pension is your hard-earned and hard-saved money for your retirement.
We want higher returns for pension savings – we want more investment in the UK – but the way to ensure that happens is not to force the hand of pension funds, but to make the UK a great place in which to invest, back businesses and grow the economy.
