Baroness Neville-Rolfe (Con)

My Lords, it is fair to say that I am not keen on Chapter 4 of the Bill, which appears to allow the state to trample on and prevent the establishment of smaller funds, and, if necessary, requires their assets to be moved, presumably to another fund. “Squashing new entrants” was the telling phrase used by my noble friend Lady Noakes. I very much hope that the Minister will be able to provide some reassurance. I support the amendments in the name of my noble friend Lady Noakes and have added my name to most of them. It is essential to permit the regulations to be pro-competitive rather than over-exclusionary, and for the review required by Clause 43—the timing of which we are yet to hear about—to consider the competitive landscape for pension scheme provision. It is also important that the regulations made encourage innovation, as Amendment 170 would. The substantial £25 billion minimum provided for in the Government’s reforms seems set to deter such innovation—innovation that is characteristic of smaller, growing operators. We have heard that, at length, on several days, but we have not yet received an adequate answer. The noble Baroness, Lady Altmann, has already raised some good points about other risks that may arise from the proposed arrangements. My noble friend Lady Noakes rightly suggested that the Pensions Regulator should be made to consider the competitiveness of new entries. I share her praise for the fintech sandbox, although I would say that that was a long time ago—indeed, when I was a Treasury Minister about 10 years ago. I am, however, less sure about the FCA’s overall success. I have therefore added my name to my noble friend Lord Younger’s stand-part notice, which questions the need for Clause 45. The Government’s Explanatory Notes are far from helpful and the implications of this clause are unclear. Why does it extend the FCA’s supervisory jurisdiction to default arrangements under Chapter 4? What, if any, new delegated powers are being given to it? I have encountered a lot of problems with the FCA over the years. The truth is that I have not found it business or fund-friendly. It presents itself as the champion of the consumer, but adds cost, delay, bureaucracy and uncertainty in a way that often raises prices and returns to the very consumer that it was set up to protect. I am therefore of the view that its role should be minor and constrained. What is the background and rationale for this clause? We need to know more if we are going to support it.