Viscount Younger of Leckie (Con)

My Lords, I thank all noble Lords who have amendments in this group, which broadly seeks to refine the Government’s scale requirement as set out in the Bill to reflect the fundamental principle that size is not everything. We have heard a lot about that in this short debate. For the sake of brevity, I shall limit my remarks to my Amendment 77. The scale requirement as currently framed is too blunt an instrument. It risks prioritising size over quality, process over performance and structure over outcomes—in other words, it risks innovative and high performing funds merely because they are small. These remarks have been echoed by the noble Baroness, Lady Altmann. The central question we must always ask in pensions policy is: does this improve outcomes for savers? This was the essence of my noble friend Lord Fuller’s remarks. If the answer is no, then we should think very carefully before proceeding. When this power comes into force, it will bring into scope schemes that are already delivering strong outcomes—schemes that are well run, well governed and performing effectively for their members. In such cases, forced consolidation is not just unnecessary but may be actively harmful. It risks disrupting successful investment strategies, increasing costs and ultimately undermining the very outcomes that we are seeking to improve. This amendment would introduce a vital safeguard. It would give the regulator the discretion to recognise where consolidation would not benefit members and to treat such schemes as meeting the scale requirement. It would ensure that the policy is applied intelligently and does not run roughshod over schemes that are already doing what the Government want. Crucially, it would also reinforce fiduciary duty: trustees and managers must act in the best interests of their members, not in pursuit of arbitrary thresholds set by the Government. This amendment would ensure that they are not compelled to take actions that run counter to that duty. Scale should be a means to an end, not an end in itself. Where scale improves outcomes, it should be encouraged, but where it does not, where schemes are already delivering for their members, we should not force change for its own sake. This amendment would simply ensure that savers remain at the centre of the policy, and therefore when this amendment is called I will seek to test the opinion of the House.