Baroness Noakes (Con)

My Lords, Amendment 55 is in my name and those of my noble friends Lady Stedman-Scott and Lady Neville-Rolfe, and the noble Baroness, Lady Altmann. I will also speak to Amendments 60 and 94 in this group. This group of amendments concerns the so-called scale requirement in Clause 40. In practice, the Government’s proposals concentrate only on size, with a vision of the DC pensions provision landscape comprising 20 or so schemes with assets of over £25 billion. I have no quarrel with the proposition that the current pensions landscape is too fragmented, which may well have contributed to investment returns for some pension savers that have not been good enough. It is, however, a massive and unwarranted logical leap to move from that proposition to the proposals in the Bill, which mean that virtually all schemes with below £25 billion of assets will cease to exist in a few years’ time. The plain fact is that investment returns do not correlate with the size of assets under management. When the Government produced their report on pension fund investment and the UK economy in November 2024, it was disarmingly honest. It said: “The evidence linking pension provider scale and gross investment returns is mixed … Across the AUM spectrum, there are examples of small, medium and large-sized schemes with both high and low gross returns”. It also said that studies suggested broadly a wide range of benefits of around £25 billion to £50 billion, in particular the ability to invest in certain asset classes. But it did not claim, as it should not, that that amounted to a guarantee of superior returns.