The Pension Schemes Bill is set to become law after peers in the House of Lords agreed to a final round of concessions on the controversial mandation reserve power.
Work and pensions secretary Pat McFadden presented amendments in the House of Commons yesterday (28 April). The changes affected the part of clause 40 setting out what the government must do before implementing the reserve power to require specific asset allocations.
The new text stated that the government would have to publish a report identifying barriers to UK and private markets investment, and to set out the steps it has taken “to address any such barriers”.
It marked the fourth version of the mandation clause put before parliament, with the power having become the final sticking point on the bill.
“The situation is far from perfect… but this settlement, which we might now call ‘mandation-lite’, is far better than that in the bill as originally drafted.”
Viscount Younger of Leckie
Last night in the House of Lords, Baroness Sharon Bowles, who has led much of the opposition to the bill among peers, welcomed the latest changes and said: “I am still no fan of mandation, but we have now got it suitably under control…
“There are reasonable guardrails to make sure that it does not go wrong, that we – I hope – never use it, and that we get the additional investments that we all agree in principle are needed.”
Viscount Younger of Leckie, another consistent voice against mandation, added: “The situation is far from perfect, and we remain of the view that the mandation power is wrong in principle, but this settlement, which we might now call ‘mandation-lite’, is far better than that in the bill as originally drafted.”
Legislators were under time pressure this week, with parliament due to be prorogued ahead of the King’s Speech on 13 May. Parliamentary time was further strained by debates over the prime minister’s conduct in relation to the appointment of Peter Mandelson as US ambassador.
Posting on LinkedIn last night, Pensions UK’s Zoe Alexander, executive director of policy and advocacy, said: “Thrilled to see the Pension Schemes Bill go through tonight after its fraught final stages. It’s a critical piece of legislation that will build value in the system and in turn deliver better retirements.”
