Viscount Younger of Leckie (Con)

My Lords, the amendments brought forward by the Government today, in lieu of those proposed by the noble Baroness, Lady Bowles, go some way towards addressing our more fundamental concerns about the mandation power. In particular, the shift in the test—from requiring schemes to show that compliance “would be likely to cause material financial detriment” to demonstrating that it is “likely not to be in the best interests of members”— represents a significant and welcome change from the Government’s original position. By placing members’ best interests at the heart of the policy, this reform helps to mitigate the risk that mandation could cut across trustees’ fiduciary duties. It was never acceptable that schemes should have to show a risk of material detriment before securing an exemption, as the Government had proposed in earlier stages. The Government’s recognition of that point is therefore very welcome, albeit somewhat overdue. I welcome the Government’s commitment to require the regulators to undertake an independent assessment of the purported collective action problem and the extent to which it is inhibiting investment in UK assets. The Government have consistently argued that mandation is necessary to address a collective action problem. They will now need to substantiate that claim with robust independent evidence, with the Secretary of State having regard to this assessment before they make regulations. That too is a welcome step forward, as is the Government’s commitment to remove discrimination in the clause between investment vehicles. Their decision to bring forward the sunset period from 2035 to 2032 is also sensible. These changes are a direct result of sustained and determined pressure from across this House to address the question of mandation in the Bill. Noble Lords on all sides recognised early on the fundamental flaws in the Government’s original approach—concerns that were not only shared here but held strongly across industry. I pay particular tribute to the noble Baroness, Lady Bowles, who has led that effort with clarity and persistence. She has kept the House focused on what is, without question, the central issue in our consideration of this Bill. I am glad that this has borne fruit in what is a substantial move from the Government’s original position, which was untenable. I shall not detain the House any further but will just say that we on these Benches are content to accept the amendments that the Government have introduced. I thank the Minister for her earlier remarks. 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. That is a direct result of the work done in your Lordships’ House to stand up for businesses and savers in our country. Finally, as this is my very last contribution from the Front Bench, and in this House, I wish the whole House and all noble Lords the very best of luck for the future. It has been a genuine, huge privilege to serve on the Front Bench almost continuously for 15 years. Of course, I will miss it dreadfully, but I do know that there is a life outside this great House of Lords.