Lord Fuller (Con)

My Lords, I knew my love-in with the noble Lord, Lord Davies, could not last, having got on so well with him on our first day in Committee on Monday. I want to come to the defence of my noble friend Lady Stedman-Scott because I do not think that she was talking about a disaster. It is common ground that the Local Government Pension Scheme—by some measure, the fourth-largest or fifth-largest scheme in the world, although it is in 89 separate pots, all of them aggregated—is a strong British success story. There is wide alignment on that on all sides of this Committee. Having defended my noble friend, I shall part company slightly with some of the points she made—but only in one small regard. My noble friend spoke of a council—we do not know which one it is, but that does not really matter; it is illustrative—whereby the numbers were fixed in time, and that led, as the result of a revaluation, to an exceptionally high contribution rate. I do not want to trespass on the next group of amendments, but I will return to this idea. My noble friend almost came to a point where she wanted to deny—she did not say this, but I took it this way—that we should have some sort of stabilisation. I want to talk for stabilisation in the periods between revaluations in the LGPS. We have done this in our scheme in Norfolk, so you avoid the peaks and the troughs. There is a stabilisation method whereby you take, if you like, a floating average over a number of things to give stability in the public finances. I accept that, as my noble friend said, if you have these huge differences—and it is not small change; you have to find lots of money—if it is overly variable every three years, that is not conducive to the public good. So I shall speak in favour of stabilisation, which is partly to do with longevity risk, which is referred to in Amendment 16. The noble Lord, Lord Davies, accurately stated that the LGPS valuation that is currently under review was dated 31 March 2025—10 months ago. I am sure that noble Lords do not need reminding that, on the very next day, the President of the United States announced a whole load of trade barriers and the stock market fell like a stone. You might say that the LGPS got away with it. Had the President made his announcement just one day earlier, those reductions in stock market values would have been crystallised in a much less favourable outcome than we hope will be the case, or are expecting, for this current valuation. Given the vicissitudes of all of these varied changes and events, it is important that we have attenuation and stabilisation between things. I do not think that my noble friend quite made that point, so I want to make it. The further points made by the noble Lord, Lord Davies, will be covered in our debate on a later group, but I want to talk for stabilisation as a counter, if you will, to the case made by my noble friend Lady Stedman-Scott.