Torsten Bell MP: speeches 2025

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Speeches

8 Dec 2025 · Pensioner Poverty · Hansard source
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I am always keen to work together with the Father of the House. He mentions the triple lock, but we are doing far more things to tackle pensioner poverty. There were 900,000 pensioners eligible for pension credit under the Conservatives who were not claiming, and that is why we have brought forward the biggest take-up campaign ever seen. The marketing campaign this year will run from September to the end of the financial year, we are carrying out research on what works to encourage take-up of pension credit and we are stepping up data sharing across Departments, including between His Majesty’s Revenue and Customs and the Department for Work and Pensions.
3 Dec 2025 · Pension Schemes Bill · Hansard source
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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.
3 Dec 2025 · Pension Schemes Bill · Hansard source
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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. [ Official Report , 12 January 2026; Vol. 778, c. 6WC.](Correction)
3 Dec 2025 · Pension Schemes Bill · Hansard source
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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).
3 Dec 2025 · Pension Schemes Bill · Hansard source
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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.
3 Dec 2025 · Pension Schemes Bill · Hansard source
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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. [ Official Report , 12 January 2026; Vol. 778, c. 6WC.](Correction)
3 Dec 2025 · Pension Schemes Bill · Hansard source
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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. New Clause 31 Indexation of periodic compensation for pre-1997 service: Great Britain “(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. New Clause 32 Indexation of periodic compensation for pre-1997 service: Northern Ireland “(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. New Clause 33 Financial Assistance Scheme: indexation of payments for pre-1997 service “(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. New Clause 34 Exemption from public procurement rules “(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. New Clause 35 Funding of the Board of the Pension Protection Fund “(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. 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.”— (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.
3 Dec 2025 · Pension Schemes Bill · Hansard source
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indicated assent.
3 Dec 2025 · Pension Schemes Bill · Hansard source
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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.
3 Dec 2025 · Pension Schemes Bill · Hansard source
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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.
3 Dec 2025 · Pension Schemes Bill · Hansard source
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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.
3 Dec 2025 · Pension Schemes Bill · Hansard source
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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.
3 Dec 2025 · Pension Schemes Bill · Hansard source
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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.
3 Dec 2025 · Pension Schemes Bill · Hansard source
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I beg to move, That the clause be read a Second time.
3 Dec 2025 · Pension Schemes Bill · Hansard source
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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.
3 Dec 2025 · Pension Schemes Bill · Hansard source
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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.
3 Dec 2025 · Pension Schemes Bill · Hansard source
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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.
3 Dec 2025 · Pension Schemes Bill · Hansard source
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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.
27 Nov 2025 · Budget Resolutions · Hansard source
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I did not say anything of the sort. I said that we are not going to have a £10 million mansion in Westminster paying less tax than a terraced house in Blackpool, and that has been brought to an end by this Budget. I have heard the worries of some Opposition Members about the surcharge, and I want to assure the House that less than 1% of properties will be affected, and even for the £10 million mansion I have mentioned, it will not exceed £7,500 a year. To put that in perspective, it is not even enough to bribe a Russian-sympathising, Putin-praising Reform politician—or a traitor, as we should always call them. Other reforms in the Budget will ensure that everyone who drives on our roads helps to maintain them. It will address the fact that tenants pay higher taxes than their landlords and tackle some of the tax breaks that have exploded in recent years, disproportionately benefiting the wealthy. That is the fair thing to do, and it is the responsible thing to do. I know that others want to take a different approach, and I heard representations from some to raise income tax. Who was particularly keen? The shadow Chancellor. He told eager listeners— [ Interruption. ] I think he should listen. He told eager listeners at the Conservative party conference that he would “go for income tax”. In fact, he was more enthusiastic than that, going on to label it the best “thing to do”. We have not taken his advice, and are instead delivering major reforms—reforms ducked by Tory Chancellor after Tory Chancellor. We have heard a lot about welfare today, and I recognise why. It is because our welfare system is failing, and we are changing it. We are undoing the huge incentive to be labelled too sick to work that the Conservative party built into universal credit, and the OBR has confirmed that this will move tens of thousands more people into work. The shadow Chancellor claimed he had a plan to reform welfare, but he did not mention that it was quashed by the courts. What he actually did as Secretary of State for Work and Pensions was to oversee the subsidised leasing of luxury cars, with the ordinary taxpayer bearing the cost of tax breaks for Mercedes and BMWs on the Motability scheme. Well, those days are done. The scheme has itself removed luxury cars, and it has committed to half of its cars being built in Britain. We are reforming its tax breaks to save over £1 billion in the coming year.
27 Nov 2025 · Budget Resolutions · Hansard source
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It is coming down.
27 Nov 2025 · Budget Resolutions · Hansard source
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I will come to the hon. Lady in a second, because she and the hon. Member for St Albans (Daisy Cooper) told us that the Liberal Democrats wanted wealth taxes, while continuing their record run of opposing every single wealth tax put in front of them, and conveniently forgetting that the Liberal Democrats tried and failed to introduce just such a wealth tax in government —a level of convenient amnesia matched only by the hon. Member for Clacton (Nigel Farage) when reminiscing about his school days.
27 Nov 2025 · Budget Resolutions · Hansard source
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Will the hon. Lady give way?
27 Nov 2025 · Budget Resolutions · Hansard source
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What I know is that youth apprenticeships fell by 40% under the Conservative party. That is what failure looks like. I am coming on to some of those matters. We do not want to grow this economy by simply borrowing more, as my hon. Friend the Member for Bolton West (Phil Brickell) rightly pointed out before he turned, at some length, to snails. There is nothing progressive about arguing that we should spend more than £1 in every £10 of taxpayers’ money on debt interest —money that would be better spent on schools and hospitals—so Liz Truss and the leader of the Greens should stay exactly where they belong and where they both started out: in the youth wing of the Liberal Democrats, far away from Government. We in the Labour party will cut borrowing in every single year—more than in any other G7 country—and more than double the headroom against our fiscal rules. We are cutting borrowing and giving businesses the confidence to invest, and cutting inflation too. We are taking £150 off energy bills, freezing rail fares for the first time in 30 years—as my hon. Friend the Member for Burnley (Oliver Ryan) set out—and extending the fuel duty freeze. All this knocks 0.4% off inflation next year, helping interest rates—which have already been cut five times since the election—to keep on falling, helping businesses to expand and getting mortgages down. What will not be coming down is public investment, which the OBR says boosts our economy. The pro-growth choice is not to return to the austerity of the past, as my hon. Friend the Member for Cannock Chase (Josh Newbury) set out. Austerity saw Tory Chancellors slash public investment, and repeatedly scrap and delay projects—the worst kind of short-term political fixes, with the worst kind of long-term economic consequences. This Budget presses ahead with an extra £120 billion of capital investment. It is exactly because this Government are confident about Britain’s future that we are going to invest in it. Sizewell C is going ahead, and we are building the UK’s first small modular reactor at Wylfa—the biggest industrial investment in north Wales for a generation. We are also building the lower Thames crossing. Infrastructure is being built in every corner of Britain. The blockers and the pessimists, and the gloomsters and the doomsters, are being taken on, confronted and defeated. The Opposition parties have never seen a housing development or energy project that they did not want to block, but those days are done. Britain is getting back in the building business. The Budget also contains necessary and fair choices on tax, which hon. Members have raised repeatedly. We have not hidden from that fact, nor am I hiding from the fact that we are asking everybody to contribute by further freezing tax thresholds towards the end of this Parliament. I hear the chuntering and the howls from the Conservatives, but where did this year’s frozen thresholds come from? Them. Who put in place next year’s freeze? Them. They announced threshold freezes, they defended threshold freezes, they voted for threshold freezes, and they cannot howl with outrage about them now. In case all of that is not clear enough to them, let me spell it out: of the revenue raised from frozen thresholds, over three quarters comes from the choices made on their watch. The difference between us and them is that we are not ducking the long-needed reforms that our tax system needs—reforms that mean we can keep the contribution from workers as low as possible. We have already abolished non-dom status, raised capital gains tax and ended tax breaks for private schools. The Budget brings an end to the disgrace of someone in a terraced house in Blackpool paying more in council tax than someone in a £10 million mansion in Westminster—or what the shadow Chancellor called an ordinary family home. If he had had more time, I am sure he would have gone on to worry about people with an ordinary family deer park, duck pond and stables.
27 Nov 2025 · Budget Resolutions · Hansard source
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It is a pleasure to close today’s debate, and I thank all Members for their contributions, including my hon. Friends the Members for North Warwickshire and Bedworth (Rachel Taylor), for Exeter (Steve Race), for South East Cornwall (Anna Gelderd), for Gower (Tonia Antoniazzi), for Norwich North (Alice Macdonald), for Newcastle upon Tyne East and Wallsend (Mary Glindon), for Newcastle-under-Lyme (Adam Jogee), for Newcastle upon Tyne Central and West (Dame Chi Onwurah), for Dunfermline and Dollar (Graeme Downie), for North Northumberland (David Smith), for Glasgow North (Martin Rhodes), for Mid Cheshire (Andrew Cooper), for Glenrothes and Mid Fife (Richard Baker), for Earley and Woodley (Yuan Yang), for Congleton (Sarah Russell) and for Calder Valley (Josh Fenton-Glynn), who all made strong cases for this Budget. I listened carefully as Opposition MP after Opposition MP talked down the British economy, as the hon. Member for Huntingdon (Ben Obese-Jecty) did, talking down British workers and talking down British entrepreneurs. I have been trying to remember what it reminded me of. I was racking my brains, but then it came to me: they are just reading out exactly the same script that they had at exactly this time last year. The shadow Business Secretary, the hon. Member for Arundel and South Downs (Andrew Griffith), frothing with his usual excitement, claimed that Britain would spend 2025 in recession. He said: “‘Could we be in recession?’ Yes we could.” That was his forecast. The actual figures are in, and the truth is that Britain in 2025 did not just avoid recession, but beat the forecast. The OBR has revised up growth this year from 1% to 1.5%. Let us look at wages. As my hon. Friend the Member for Erewash (Adam Thompson) said, wages are up in the forecast and, far more importantly, in people’s pay packets. Wages have gone up more in the first year of this Government than in the entire first decade of the last Conservative Government, and there is much more to do. Changing Britain was always going to be hard, and we now know that the damage from the last decade of austerity and Brexit was worse than previously thought. That lies behind the productivity downgrade that the hon. Member for West Worcestershire (Dame Harriett Baldwin) rightly raised, but the question is how we respond to that news.
27 Nov 2025 · Budget Resolutions · Hansard source
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