John Grady

I rise to speak in favour of the Bill. On a policy basis, the Bill addresses a number of very important challenges. The first is ensuring that the pension system delivers good outcomes for the millions of pension savers in Britain. That is absolutely critical. In my lifetime, the risk of pension savings has shifted from the employer to the employee—in other words, to our constituents. At the heart of the reforms is one essential fact: investment in a diverse set of assets leads to better returns and better outcomes than investment in a narrow set of assets. We need to move away from a focus on cost in the industry and on to a focus on overall value and the outcomes that savers get, so they have comfortable retirements. I am determined that the working people in Glasgow East have comfortable retirements and are properly rewarded for their hard work. Therefore, the Bill’s objective of ensuring that savers in Glasgow East and across the United Kingdom ultimately have access to a wider pool of investments, which have historically been restricted, is a good outcome and a good policy. The second challenge the Bill seeks to address is growth. People in Glasgow East are very ambitious, as I know they are in Aberdeen North and in Hampshire. As I knocked on doors ahead of last year’s election, people would say to me, “Britain has lost its way.” And many people said that they felt their children would be better off working abroad, or that there were more opportunities for their children abroad. That is the challenge the Bill plays a part in addressing. We do not invest enough in our productive capacity so we have lower, sclerotic economic growth. Pension savings are an essential source of finance for British industry and infrastructure. In that regard, the Bill includes, in chapter 3 of part 2, something that seems to be causing anxiety: the backstop mandation of investment by defined-contribution pension funds into private asset classes linked to the United Kingdom. Private non-listed shares and debt are now central to investment in a way that they were not when I started off as a junior lawyer many years ago. Growth companies in areas such as medicine, AI, technology and, of course, space remain in private hands for much longer, and list on public markets much later, if at all. The mandation power must be viewed in that context. If UK pension funds do not invest in those classes of domestic assets, working people may miss out on significant returns, and we risk losing the opportunity of growth and of developing the great innovations from our fantastic universities, including the University of Strathclyde.