MPs have voted to reinstate Labour’s controversial reserve powers requiring pension schemes to invest in UK assets, overturning changes made by the House of Lords.
The Commons rejected peers’ attempts to remove the mandation provisions from the Pension Schemes Bill during the parliamentary ping‑pong process, and also defeated a separate Lords amendment designed to block the Treasury from issuing investment guidance to pension funds.
The legislation aims to improve outcomes for members of defined contribution schemes through better information, consolidation of pension pots and stronger long‑term returns.
Work and pensions minister Torsten Bell defended the inclusion of the reserve powers, saying: “Mandation has one purpose, supporting better outcomes for savers.”
TRENDING
Stories
Videos
Your Say
He argued that an excessive focus on costs remained a major barrier within the pensions sector.
“Giving the industry certainty that they can do what is in savers’ interest, because the rest of the market will move too, is the only purpose of the reserve power,” he said, adding that ministers could not support Lords amendments seeking to remove it.
The Bill also seeks to give savers greater transparency over their retirement options and bring together fragmented pension savings into more efficient schemes.
However, the proposals drew criticism from opposition parties.
MPs back pension mandation powers despite Lords revolt
|GETTY
Liberal Democrat work and pensions spokesperson Steve Darling described the plans as “the dead hand of Government on growth for people’s pensions”, warning they could prove “feckless and dangerous”.
Shadow work and pensions secretary Helen Whately also attacked the mandation powers, saying: “Let’s tell the public the truth — socialists always run out of other people’s money.
First they came for earnings, then they came for your savings, and now for your pension.”
Labour MP Debbie Abrahams, chairwoman of the Commons Work and Pensions Committee, dismissed the criticism as “dangerous scaremongering”.
LATEST DEVELOPMENTS
Are you affected by state pension age changes? | GETTYMr Bell said several Conservative MPs had privately supported retaining the provisions, arguing the Bill “supports savers” by focusing on improving returns.
“Even the most overexcited members opposite know it is the right thing to do,” he said.
The Commons rejected the first Lords amendment by 278 votes to 158, and the second by 276 votes to 155.
The Bill now returns to the House of Lords for further consideration before both Houses reach final agreement.