Retirement of a Member: Lord Mandelson
The Lord Speaker (Lord Forsyth of Drumlean)
My Lords, I announced in the Chamber yesterday that the noble Lord, Lord Mandelson, had given notice of his retirement. I now formally notify the House of his retirement, with effect from today, pursuant to Section 1 of the House of Lords Reform Act 2014.
NHS: Corridor Care
(1 day, 10 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Baroness Watkins of Tavistock
To ask His Majesty’s Government what assessment they have made of the provision of corridor care in the NHS; and what plans they have to mitigate any issues arising.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, we have introduced new data collection on corridor care, which will be published shortly for the first time. We are taking sustained action to reduce the use of corridor care, ensuring that there are safeguards for patients in the interim to still receive high-quality and safe care with dignity and privacy. We are investing £450 million to expand same-day and urgent care services, and to improve hospital flow, as well as introducing new clinical operational standards.
Baroness Watkins of Tavistock (CB)
I thank the Minister for her reply, but I want to understand when a credible long-term delivery plan will be published—rather than “in the near future”—to restore year-round resilience, making whole-system patient flow a core performance priority. Unnecessary stays in hospital are linked to worse patient outcomes, and it should be possible to reduce the nearly 13,000 beds occupied on average each day in 2025 by people medically fit for discharge, in turn reducing the need for corridor care.
Baroness Merron (Lab)
Let me say at the outset that corridor care should not be normalised; it is not what we want to see as routine. The reality is that we cannot eliminate it entirely—I think that is understood—but the current situation is not as we would want it to be. In addition to the Urgent and Emergency Care Plan 2025/26, which sets out clear actions to deliver improvements, the most challenged trusts are receiving targeted support. Looking to the future, as the noble Baroness asked about, the medium-term planning framework clearly sets out a trajectory to improve the situation. The introduction of clinical guidelines for the first 72 hours will also increase the proportion of people discharged within 72 hours. I very much recognise the situation the noble Baroness describes.
Baroness Kingsmill (Lab)
My Lords, as a former chair of an NHS community trust, I say that the situation often arises because of the shortage of social and community care. What are the Government doing to address those issues?
Baroness Merron (Lab)
On social care, we are making progress on building a national care service. Around £4.6 billion of additional funding has been made available for adult social care by 2028-29. Along with other matters, including funds to improve and provide adaptation so that people can return home when they would not have been able to otherwise, we are providing funding of over £1 billion for adult social care with local authorities. This can be used to expand capacity. Of course, we have an independent commission chaired by the noble Baroness, Lady Casey.
Baroness Manzoor (Con)
My Lords, in a recent survey 78% of physicians reported undertaking corridor care. It is becoming almost the norm all the year round. It affects patients’ dignity, health and safety, and patient outcomes, because there are greater infection rates. I welcome the Minister’s points on the action that the Government are taking, but it is rather long-sighted and there is a real urgency to do something now.
Baroness Merron (Lab)
I agree with the noble Baroness. Corridor care is perhaps one of the most visible and distressing symptoms of an NHS that the noble Lord, Lord Darzi, described as broken. We have to fix a number of the processes. I welcome that we are expanding urgent care access, for example, in primary, community and mental health settings, which will reduce demand on services. However, without publicly available data and the clinical operational standards that we are setting, the change will not be made as quickly as we would all like. There are immediate actions, as well as medium and long-term actions.
Lord Rennard (LD)
I shall pass on your Lordships’ best wishes to her. Last year, she was taken ill and the ambulance took her to a Liverpool hospital in the early afternoon, but, after some tests, no bed could be found for her. She spent the rest of the day and all of the night on a trolley in a corridor. Every hour throughout the night she was moved along, deprived of sleep and the basic provisions, including food and drink, which she would have had on a ward. What are the Government now doing to tackle the problem of delayed transfer of care, which results in fewer beds being available? Does the Minister accept that this can be done only by properly resourcing adult social care?
Baroness Merron (Lab)
I agree with the need for more adult social care, but there is a whole range of factors that affect discharge delays, including the number of people who present. What the noble Lord outlined was not right and not the way in which his mother-in-law should have been dealt with. I know he would not expect me to comment further on individual circumstances, but if somebody is being considered for corridor care, that should be appropriately risk-assessed by clinical teams. The exact point he made is something that I have asked about. There should be a named nurse, and the provisions he talked about, such as food and drink, should have been there.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
We will have the Cross Benches and then we will come to the Conservative Benches.
Baroness Gerada (CB)
We know from evidence that you can avoid hospital admission by improving continuity of care by general practitioners. When will the Minister redress the imbalance whereby GPs are funded from only 8% of the NHS budget yet deliver 70% to 80% of its care?
Baroness Merron (Lab)
We very much appreciate the role that GPs play. Corridor care is related to a whole range of factors, not only the position of GPs. I have heard what the noble Baroness has said and will gladly relate it to my ministerial colleague.
The Earl of Effingham (Con)
My Lords, the Minister referenced data collection in her previous responses. In November, hospitals carried out 10% fewer operations than in October, but the Government claim the waiting list went down. Is that because the Government are paying hospitals £3 million per month in a process known as “validation”, and so it appears that the health service is treating more patients than it actually is? Is that the real reason that corridor care numbers are up?
Baroness Merron (Lab)
No. I hope that the noble Lord would welcome a greater level of activity in this area. The waiting lists are going down. We have delivered, for example, 5.2 million extra appointments since we came into government, when we had promised just 2 million. Waiting lists are going down, and I am very happy to provide the data again to the noble Lord so that he can investigate that.
Lord Kennedy of Southwark (Lab Co-op)
It is definitely the turn of the Labour Benches. Can noble Lords make up their minds quickly?
Lord Brooke of Alverthorpe (Lab)
My Lords, my recent experience in care homes is that there are vacancies—unfilled beds—in private care homes. When are we going to do something about the mismatch of people in corridors, when beds are available? There needs to be some system introduced to get people into them.
Baroness Merron (Lab)
The first thing that needs to happen is that people need to be cared for in the hospital. As I said in answer to an earlier question, everybody should be assessed according to their need. If there is a shortage of beds, it is for that hospital to manage. There will always be a difference of demand. However, where there are problems in hospitals that are not responding as they should, we are putting in improvement teams to ensure that change can be made. Of course, it is only when people are well enough, and it is suitable and safe to discharge them, that they will be discharged. It is important to match up availability of social care beds to needs.
Land Covenants: Supermarket Chains
(1 day, 10 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Kirkhope of Harrogate
To ask His Majesty’s Government what discussions they are having with the Competition and Markets Authority about updating the rules relating to land covenants on supermarket chains.
Lord Kirkhope of Harrogate (Con)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and, in doing so, I declare my interest as a holder of a number of loyalty club cards with various supermarket chains and also my membership of the Co-op.
The Minister of State, Department for Business and Trade and HM Treasury (Lord Stockwood) (Lab)
My Lords, the Competition and Markets Authority is currently assessing whether additional retailers should be designated under the controlled land order and brought within its scope. We continue to engage with the CMA and will consider its findings carefully once it has concluded its assessment later this year.
Lord Kirkhope of Harrogate (Con)
I thank the Minister for that incomplete reply. The situation is absolutely unsatisfactory in that the seven main supermarket chains have been obliged to adhere to strict requirements on restrictive covenants in their area, preventing others from opening shops nearby, whereas newcomers such as Aldi and Lidl, which have now grown to an enormous size—a commensurate size—are not required to fulfil those obligations. That surely is wrong. If the Competition and Markets Authority has any role in life, surely it must be to have a level-playing field in retailing.
Lord Stockwood (Lab)
I am assuming from the noble Lord’s question that he does not have Aldi and Lidl advantage cards as well. Just to acknowledge, the CMA is currently doing its work, including on a consultation to get feedback on how Aldi and Lidl should be treated. We acknowledge that the argument for exemption does distort the market, but the independence of the CMA must be respected. I share the noble Lord’s views that it seems right on face value that Aldi and Lidl should be brought into that same regime.
Lord Fox (LD)
My Lords, as well as the issue of Aldi and Lidl, there is also the issue of almost complete non-compliance with the 2010 order system. The CMA has identified multiple repeated breaches across all of the seven majors, as mentioned by the noble Lord. So, in addition to having this system, it is entirely unenforceable because the CMA has no legal powers to fine on this issue. The whole thing is being brought into disrepute by the absence of any real enforcement. Can the Minister confirm that the digital markets Act gives powers that could be taken by the CMA to fine on this issue, and will that be one of the issues that the CMA will be reviewing?
Lord Stockwood (Lab)
The CMA has a broad primary and competition regulatory framework. It is equipped with the powers to investigate and to act against anti-competitive conduct. On the specific question about the digital Bill, I will have to consult with colleagues and come back to the noble Lord; I am not familiar with it.
Lord Sharpe of Epsom (Con)
My Lords, we all recognise the importance of competition, not just for economic growth but for the competitive pressure that keeps prices low for consumers. As the Minister has acknowledged, it is obviously not fair that some large retailers operate under different rules. At the same time, however, the fairness test fails when one considers this Government’s business rate policies. Does the Minister think it is fair that business rates will rise by 115% on hotels over three years but only 4% on supermarkets?
Lord Stockwood (Lab)
Taking a broad perspective on the question, I came into government to support the pro-business agenda. What the Government are trying to enact is the ability to stabilise the economy based on fiscal rules, to create an investment environment that is investable from all parts of the market, and then, importantly, to look at regulation to enforce that fairness and sense of competitive tension. The Government are committed to reforming the business rates regime, and that work has already begun. At the Budget, the Chancellor announced a permanent 5p cut in the business rates multiplier for over 750,000 retail, hospitality and leisure properties, which is also funded by the higher tax rate for the most expensive 1% of properties. We continue to take feedback to try to create the right fiscal conditions for businesses to be able to thrive.
Lord Watts (Lab)
My Lords, like most regulators, this one is failing the general public. Do we not need to review all our regulators to make sure that they are doing the job that they are supposed to do? If the legislation needs strengthening, then strengthen it—but also hold the regulators to account for the work that they do.
Lord Stockwood (Lab)
I share some of the views that the noble Lord put over. As I have learned from my 20-plus years in business, the role of government is to set the regulatory conditions so that business can do the work in growing the economy. What we are seeing from the Government is a commitment to reduce the regulatory burden overall. Our Regulation Action Plan commits to reducing the £22 billion annual burden by 25%. There are reforms in place, and the unlocking business consultation means that we will take direct feedback from the market. It is beholden on us to ensure we set the conditions for businesses to thrive, while also ensuring that we have the right regulation in place so that we do not see the abuses of power that have been suggested by these particularly restrictive covenants.
Baroness McIntosh of Pickering (Con)
My Lords, does the Minister agree that the CMA also has a role to play in looking at the work of the Groceries Code Adjudicator? There is a great imbalance of power between the big supermarkets and the very small horticultural businesses and fruit growers in this country. Does he agree that it would be better if the Groceries Code Adjudicator could take an own-initiative inquiry off its own bat, rather than waiting for a producer to come forward with a complaint? That producer could so easily be identified and possibly lose their contract with the supermarket.
Lord Stockwood (Lab)
In my relative newness to government, I thank the noble Baroness for her questions. Overall, it is correct that the CMA’s regulatory framework should have independence. I would love to pick up that discussion outside the Chamber; I do not know the detail of that, but it sounds like an important thing that we should follow up on.
Lord Evans of Rainow (Con)
My Lords, I will pick up from my noble friend’s question comparing hospitality and retail on the high street. Recently, a pub closed on a high street that was paying £67,000 in business rates. It was taken over by a supermarket, which now pays £16,000 in business rates—and, of course, supermarkets sell alcohol at cost price. Can the Minister look into this and provide much-needed help for hospitality on our high streets? Without hospitality, our high streets will become deserts.
Lord Stockwood (Lab)
Again, the noble Lord raises an important issue about our high streets. While it is not within the range of this Question, I am willing to follow it up. The Government announced a £150 million package for supporting our high streets, but I agree that we should go further on this.
Baroness Wheatcroft (CB)
My Lords, in considering the use of land by supermarkets, does the Minister agree with me that there is huge acreage sitting unused on top of supermarkets throughout the country? Given the housing shortage, would it not make sense to put pressure on supermarkets to use that space to provide housing, perhaps in a prefab state so that it is made easily, quickly and accessibly? After all, the shops are nearby.
Lord Stockwood (Lab)
It is important to state that the reason for some of these restrictive covenants in business is that they are commercially negotiated and should be mutually agreed in the bounds of setting up a contract. This is quite a normal course of action, so I want to make sure that I am not stood here in any way demonising the large retailers entirely. However, particularly pertinent to the point of the homes target, the Government, through the Planning and Infrastructure Act, are looking at how we streamline all our planning for homes and critical infrastructure, and I suggest that land usage by the major retailers would come within that review as well.
Lord Hunt of Wirral (Con)
Following on from the question of the noble Lord, Lord Watts, does the Minister share my concern that, over recent months, there is increasing evidence that delays from the Competition and Markets Authority are having a serious effect on a number of key areas? The noble Lord, Lord Fox, mentioned the digital markets regulation side, but there are also outstanding decisions on veterinary services, cloud computing and legal services. The Minister may be aware that the authority is now looking at what it calls the four Ps project—pace, predictability, proportionality and process. Is he happy with its progress?
Lord Stockwood (Lab)
In preparation for this Question, I spent a bit more time than I should have done learning about the CMA’s role. I agree that, as we look to create a regulatory framework that is both agile and appropriate, it is only right that we ask the same questions of the CMA. There is a strong strategic steer from this Government about making sure that we have the right regulation and application for growth and pace. On price, product, place and promotion, I suggest that we have to reverse that and apply it to the CMA, so I will be asking that question and will come back to the noble Lord on that.
Think Tanks: Funding
(1 day, 10 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Rennard
To ask His Majesty’s Government what assessment they have made of the level of transparency required for the funding of think tanks, including in relation to funding from abroad.
Baroness in Waiting/Government Whip (Baroness Anderson of Stoke-on-Trent) (Lab)
My Lords, it is for each individual think tank to publicise and declare their sources of funding. Think tanks with charitable status must follow Charity Commission guidance, ensuring political activity remains subsidiary and exclusively furthers their charitable purposes. The Government are committed to responding to threats of foreign interference in our democracy. We eagerly await the findings of Philip Rycroft’s independent review into countering foreign financial influence, which will report by the end of March.
Lord Rennard (LD)
My Lords, for 25 years, political parties have had to declare their significant sources of income, but so-called think tanks that promote the causes of some political parties, and undertake research and produce reports helpful to them, do not have to declare any such funding. The right-wing think tanks based at Tufton Street refuse to declare their sources of funding but have been linked with the fossil fuel industry, property developers, tobacco companies and dark-money trusts in the US. Since 2012, anonymous foundations in the United States have poured over $14 million into these groups. Money to them is also filtered via charities. Will the Minister confirm that the elections Bill will tackle this anomaly and make such funding completely transparent?
Baroness Anderson of Stoke-on-Trent (Lab)
I thank the noble Lord for his work in this space to make sure that we have faith and trust in the many democratic institutions that are part of the wider ecosystem. On the substance of his question, electoral law already covers think tanks that donate or spend during regulated election periods. Our reforms will ensure that those with a genuine UK connection can contribute to our democracy—for instance, by requiring recipients to undertake “know your donor” due diligence to guard against illegitimate foreign funding. The Government are committed to protecting our democracy from foreign actors. As I said, the Rycroft review will form a vital part of this work. I look forward to discussing this—over many hours, probably—in your Lordships House when the legislation is in front of us.
Lord Mackinlay of Richborough (Con)
My Lords, I am the director of the Global Warming Policy Foundation—one of those institutions that occupies an address in Tufton Street. I can declare most absolutely that the foundation has never and will never take money from the fossil fuel industry. But if changes are afoot in this whole field—the Minister said clearly that if institutions are involved in the political field, they are already caught by regulations requiring reporting to the Electoral Commission—let us hope they apply as well to the left-wing charities that some would prefer, if they are to apply to right-wing charities that some do not like.
Baroness Anderson of Stoke-on-Trent (Lab)
I am not sure there was a question in there, but I will take the opportunity to reassure your Lordships that, just as CC9 guidance for the Charity Commission applies to every charity, regardless of their charitable objectives, and just as the electoral law applies to every third-party campaigner, the issue is making sure that people who actively participate in our elections are duly registered as third-party campaigners.
Baroness Falkner of Margravine (CB)
My Lords, on transparency, is the Minister aware of the Fundraising Regulator’s concerns about the registration of very small community interest companies at Companies House? They prefer that route of registration in order to avoid Charity Commission oversight and evade all accountability in terms of fundraising. I understand that the Government are in talks with the Fundraising Regulator and others to improve that situation. Can she tell the House when those talks might come to an end?
Baroness Anderson of Stoke-on-Trent (Lab)
I thank the noble Baroness for her question. I am afraid I am not in a position to update her on the timescale or the development of those talks, but I will make sure that she gets an answer.
Lord Wallace of Saltaire (LD)
My Lords, I declare an interest: I used to work for the all-party think tank Chatham House, which always declares its donors, as all partisan or non-partisan think tanks should. The Minister may have noticed that, some days ago, the Free Speech Union took out an emergency injunction to prevent the publication of its donors. We are talking about a range of bodies which are partisan think tanks, lobbies trying to influence the political debate, and third parties, in effect, and we need to tighten the rules on those bodies. It is money coming in from the United States and the UAE, as well as from hostile states such as Russia and China in much smaller numbers. Some of the money coming in from the Gulf states to the Blair Foundation, I think, is very considerable. Should there not be tougher rules to make sure that transparency is insisted on in all cases?
Baroness Anderson of Stoke-on-Trent (Lab)
The noble Lord will be aware that last year, we published our anti-corruption strategy, which outlined the risks posed by corrupt actors who are seeking to influence UK institutions or launder their reputations by engaging in some organisations. As I have said before from this Dispatch Box, we have also recently launched the Counter Political Interference and Espionage Action Plan, which addresses how some state actors use different elements of the state. But the one thing that is incredibly important within the context of all these issues is that fundamentally, our country is run by the Government, and it is Ministers who make final decisions, supported by an impartial Civil Service. Those aspects are key and, while engagement with wider stakeholders is incredibly important and is covered by the Ministerial Code, it is about the integrity of our Ministers and making sure that we have a consistent, impartial Civil Service.
Lord Watts (Lab)
My Lords, is not the only way to address this to require all think tanks to publish annual reports on where their sources of funding are coming from? It is clear that many have a political agenda, and it is important for our democracy that they are transparent.
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, if a think tank is a charity, it is subject to regulation by the Charity Commission. If it is engaging in election activity, it is subject to the Electoral Commission for any spend over £10,000 and donations over £700. But the noble Lord raises an important point, which is why we asked Philip Rycroft to undertake his review, and I look forward to reading it at the end of March.
Baroness Finn (Con)
My Lords, think tanks plays an important role in advancing democratic engagement by developing ideas and policy. There is currently no legal requirement for them to disclose their funders, and imposing such a requirement on charities and research institutes would risk a disproportionate intrusion into civil society. The ability of organisations across the political spectrum to contribute freely to public debate is an important part of our civic strength. Will the Minister therefore confirm that the Government recognise the value of the current arrangements in enabling think tanks to carry out this work and that they have no plans to change that existing regime?
Baroness Anderson of Stoke-on-Trent (Lab)
I hate to disappoint the noble Baroness, but I cannot and will not. To be very clear, while I appreciate and have worked directly with think tanks—as I think most Members of your Lordships’ House have—and sat on panels and engaged with them, the reality is that if a regulatory framework is required to make sure that people know who they are engaging with and whether there are any ulterior motives, we have to be clear on what those are. I have written for organisations such as the Policy Exchange, and I used to run HOPE not hate, a third-party campaign organisation. There are different structures that everybody has to engage with, but it is only right and proper that we know who is funding what, when and why.
Baroness Crawley (Lab)
My Lords, do the reforms the Government have coming down the line cover the structure and scale of think tanks? One might call itself the “worldwide progressive institute” and you would think, “Oh, they must be good”, but it is actually just a chap and his dog in his mum’s spare bedroom. So, will the reforms cast some light into the spare bedroom?
Baroness Anderson of Stoke-on-Trent (Lab)
I was hoping we would go for the dog rather than the spare bedroom.
As I have said, Philip Rycroft is looking at some of these issues of foreign interference in the round. There is a genuine issue, and my noble friend raises a genuinely important point about knowing who we are engaging with and why. We have seen in recent days, not least when I was in front of your Lordships’ House discussing it, why we need the espionage strategy, and to make sure people know who they are talking to and why. This is the case for lobbying as much as for think tanks, and we need to make sure the right regulatory environment is in place.
Baroness Foster of Aghadrumsee (Non-Afl)
My Lords, one of the previous questions to the noble Baroness was about all political parties having to declare where their sources of income are from. Of course, that is not the case: Sinn Féin does not have to declare this because it is an all-Ireland party. Can she confirm whether Philip Rycroft will look at this issue as well? It is an important issue, because Sinn Féin is standing in elections to the other place.
Baroness Anderson of Stoke-on-Trent (Lab)
I knew I was going to get that question. I would like to thank the noble Baroness for the question—I think. She is absolutely right, and I have had several meetings, including with the Election Commissioner for Northern Ireland, about some of the things operating in this space. I will talk to the noble Baroness outside your Lordships’ House, but I will also write to her with any specific details.
Baby Milk Powder: Cereulide
(1 day, 10 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Baroness Bennett of Manor Castle
To ask His Majesty’s Government whether they have identified any systemic issues following the discovery of the toxin cereulide in baby milk powder sold in the UK; and if so, what steps they plan to take as a result.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, Nestlé and Danone launched product recalls of certain infant formula products because of the possible presence of cereulide toxin. This is a live incidence and it is too early to identify any systemic issues.
The Food Standards Agency is working across agencies and with the Department of Health and Social Care to manage the incident response. The FSA has published information on the product recalls on its website, including advice for consumers.
Baroness Bennett of Manor Castle (GP)
I thank the Minister for her Answer, but I would posit that there is very clearly a well-identified systemic problem that non-mandatory ingredients such as arachidonic acid, which is the source of the current contamination in Nestlé and Danone products, place a burden on infant metabolism and create multiple potential points of microbial and other contamination in the manufacturing process by the four companies that supply the vast bulk of infant formula in this country through complex, for-profit global supply chains. Are the Government going to look into further action on this?
Baroness Merron (Lab)
Obviously, we are very concerned about toxins and ensuring that there is no damage done to people: that is the reason for the product recall. The effect of this is that it creates bacteria, so it is like food poisoning in that respect.
With regard to what the noble Baroness has said about ARA oil, the concern of the FSA is very much about safety. What has happened here, as I understand, is that ARA oil is a very common ingredient, but this one appears to have had some contamination, which has affected certain batches, and it is those that are being recalled.
Lord Patel (CB)
My Lords, what the Minister said is correct, but only partially. Arachidonic acid is the key component that may contain bacillus cereus, which is the product that produces the toxin cereulide, which causes problems for babies including vomiting and diarrhoea. It is the same as any bacteria or virus that causes the gut rot that we often experience. It is a supply chain problem and the current regulatory mechanism relies on self-regulation. That is what needs to be addressed. We had a similar problem in 2008 with another chemical called melamine, which was in milk products and caused kidney damage to babies. Does the Minister agree that it is the regulation of the supply chain and production that needs to be addressed?
Baroness Merron (Lab)
As ever, the noble Lord has put things better than I did. I understand the point he is making. The FSA’s role, certainly in the incident response, includes chasing supply chains to identify any additional potential products and businesses. I certainly agree that it is very important to stem any difficulty. But, as it is a live incident, the only point I would make, as I said to the noble Baroness, is that the focus is very much on managing the situation. Therefore, there has not been the opportunity to look into the detail that I agree it needs. That will happen, as it always does, in an incident such as this.
Baroness Walmsley (LD)
My Lords, is the Minister aware that it took Nestlé four weeks from its first notification of contamination to the Dutch Government to initiate the first product recall on 5 January, following further tests? Does she agree that there should be independent testing, rather than relying on in-house testing by the formula producers? Does she agree that that independent testing should be triggered, at the very least, at the first whiff of any possible contamination?
Baroness Merron (Lab)
In my preparation for this Question, which is an important one, I asked a similar question to officials, particularly those from the FSA, and they assured me that testing shows we are meeting the right standards. They also made the point that this is all covered by the Food Safety Act. In their opinion, they have the tools to do the job. I am not aware that there has been something wrong in the management of this live incident, but I am aware that the FSA and the UK Health Security Agency are liaising very closely with the manufacturers to establish the root cause of the possible presence of this toxin. But I can also reassure your Lordships’ House that it is confined to certain batches. That is the information that is going out.
The Earl of Effingham (Con)
My Lords, providing the best nutrition for children of all ages is surely a “must have”. So, why do the Government allow ultra-processed foods to constitute between two-thirds and three-quarters of calories in UK school meals? They are high in fat, sugar and salt. That is not a good combination.
Baroness Merron (Lab)
The noble Earl has moved from food safety to what is in food. Food standards applicable to school meals are both monitored and in place. As he knows, the general advice from the NHS on processed foods is that we would all benefit from eating less of the foods that are high-fat, high-salt and high-sugar. But those foods are not presenting the immediate safety concerns. I make that distinction as we are looking here at toxins in products.
Baroness Manzoor (Con)
My Lords, of course the best food for babies comes from breastfeeding. May I advocate that we should not lose sight of the fact that many mothers do breastfeed? But I understand the anguish and fear that mothers who cannot breastfeed have had in relation to this incident, and the department needs to do more to make young new mothers aware of the issue, because, as the Minister and I know, there is a shortage of community midwives and health visitors.
Baroness Merron (Lab)
That last point is something that will be looked at as part of workforce planning. I totally agree with the noble Baroness about the importance of the multidisciplinary team in supporting new mothers to find the right ways that are suitable for them and best for their baby—and I am glad the noble Baroness accepted that breastfeeding is not possible for everybody.
Baroness Neville-Rolfe (Con)
My Lords, as the grandmother of a baby who was born pre-term, I was very interested in this incident. As far as I could make out, it seems to have been well publicised, and those who might be affected got to know of it very quickly. Is there any evidence that harm has been caused, or did the Food Standards Agency, which was set up to deal with these sorts of things, do a decent job on this occasion?
Baroness Merron (Lab)
I am certainly convinced that more than a decent job has been done on this occasion. I know that the FSA, along with the department and the UK Health Security Agency, have, as was said to me, been working non-stop since the incident was notified, and I am genuinely reassured by that. What I would say is that alternatives are available, there is no problem with the supply of alternatives and if anybody—grandmothers, mothers, parents, friends, or whoever—has concerns, they should check the NHS website and the FSA website and, if they remain concerned, they should seek guidance from a medical professional. There are people who are potentially affected, but, as I said, this is a live incident and it is being monitored.
Lord Winston (Lab)
My Lords, I have in the past given notice to the Minister about this, with regard not to milk but to other issues: for example, where small humans, such as embryos or babies, come in contact with fluids or chemicals that might be dangerous. It is not only milk that may need better observation. Does she agree that we should look rather carefully at how we regulate the fluids used for culture of human tissues, in particular embryos, where there may be some risks of not getting better results, or possibly even of danger to the embryo?
Baroness Merron (Lab)
Safety is paramount, whether we are talking about embryos, adults or children. I would be pleased to hear from my noble friend if there are particular areas on which he would like to be reassured, or at least responded to. But I hope that, in respect of food safety, in this situation, your Lordships’ House will see that all actions have been taken by the relevant authorities, with speed and in line with the laws available.
Public Order Act 2023 (Interference With Use or Operation of Key National Infrastructure) Regulations 2025
(1 day, 10 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
17:28 - Division on the amendment to the Motion - Ayes: 62 / Noes: 295 - Amendment to the Motion disagreed.
Lord Hanson of Flint
That the draft Regulations laid before the House on 27 November 2025 be approved.
Relevant document: 45th Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Home Office (Lord Hanson of Flint) (Lab)
My Lords, I will come on to the SI in detail in a moment, but I begin by reminding the House of a Labour manifesto commitment that is central to this area of work.
The Labour Government have planned to champion robust and world-leading animal welfare standards. On Tuesday 11 November, the Government published our animals in science strategy, a joint effort led by my noble friend Lord Vallance and supported by my noble friend Lady Hayman of Ullock and me. The policy statement was to phase out animal use in science, as announced by a Written Ministerial Statement. This policy has been welcomed by animal welfare groups, industry and academia. We have been clear that this can be done only at a pace that scientific advances allow, and that in some areas it will be essential to continue the use of animals in science for specific purposes.
It is therefore critical—this is where I return to the SI—that, although the Government’s direction of travel is to find alternatives to animals in science and phase out their use, we ensure at the same time that we get growth potential from this business in the world at large. The protection of those critical resources, while we try to reduce and eliminate their use where possible, is therefore essential. The purpose of the SI is to better protect facilities that are indeed essential for developing treatments for human and animal diseases. That is why, although the government manifesto’s direction of travel is clear and will, I hope, be met, the life sciences industry remains integral to this country. It is central to health resilience, to pandemic preparedness and to capabilities in this area. In my view, recent experience underscores why we must be prepared at all times to respond to such a crisis.
This Government want the UK to become a global beacon for scientific discovery. The life sciences sector employs over 350,000 people and generates £150 billion-worth of turnover annually. The sector is essential to the development of new treatments and crucial to the safety testing of new medicines and vaccines. No one knows that better than my noble friend Lord Vallance, who dealt with such issues during the response to the Covid-19 outbreak; its contribution in that instance cannot be overstated.
When it comes to the SI, recent protest activity has deliberately targeted the life science sector, threatening the UK’s sovereign capability to produce vaccines, medicines and therapies, and has disrupted supply chains that are, in my view, indispensable to research and national health protection. As a result of that disruption, work that is of significant benefit to society is, I am afraid, placed at risk. It is therefore incumbent on the Government of the day to act without delay.
That brings me directly to the subject of our debate today. The legislation before the House will address the issue that I have outlined by amending Section 7 of the Public Order Act 2023 to add the life sciences sector to the list of key national infrastructure. This will make it a criminal offence to deliberately or recklessly disrupt life sciences infrastructure or interfere with its use or operation. Anyone convicted of this offence will, obviously, have been arrested by the police and potentially warned by them, and the CPS will have gone through those charges, but anyone who ultimately faces that conviction will face a penalty of up to 12 months’ imprisonment, a fine or both. In turn, this change will strengthen the police’s ability to, in my view, respond to disruptive protest activity that is undermining our national health resilience.
The legislation will cover infrastructure that primarily facilitates pharmaceutical research, or the development or manufacturing of pharmaceutical products, or which is used in connection with activities authorised legally by Parliament under the Animals (Scientific Procedures) Act 1986. That will include pharmaceutical laboratories, medicine and vaccine manufacturing facilities, suppliers of animals for research and academic laboratories carry out research involving animals.
It is clear that when Parliament passed the Public Order Act 2023, it explicitly deemed it necessary to build in the ability for new elements to be added to Section 7. The original section covered vital infrastructure being targeted by overtly disruptive protest; the life science sector now faces precisely the same situation. Parliament deliberately framed the definitions in the Act widely and explicitly allowed Parliament to add to the list of key national infrastructure, should the need arise. Today, that need has arisen.
If I may, I will directly address the fatal amendment tabled by the noble Baroness, Lady Bennett. First, I disagree with the stance and content of the amendment, but I think I have a duty to explain why. Let us take the components in turn. The noble Baroness has argued that the regulations constitute “legislative overreach” and
“extend the definition of ‘critical national infrastructure’ beyond its appropriate meaning”.
I will listen to her comments, but it is important that we put this on the record now.
Disruption to the life science sector poses significant and imminent risk to this country’s ability to act in a medical crisis and, if not addressed, could seriously undermine the UK’s readiness for the next pandemic. This is entirely in keeping with the existing definition of key national infrastructure and, given the risk posed to the country, in my view it comfortably meets the Government’s high threshold for this protection. The key national infrastructure sections that we have already include road transport, rail infrastructure, air transport infrastructure, harbours, downstream oil infrastructure, gas infrastructure, onshore oil and gas, onshore electricity generation and newspaper printing infrastructure. I suggest that support for activity in a medical crisis meets that criterion.
Secondly, the noble Baroness argues in her amendment that the proposal from me and the Government today further restricts
“the democratic right to peaceful protest”.
Let me be clear to this House: the right to peaceful protest is a fundamental part of our democratic society. People should have the right to protest. If they wish to protest, they should have that right. I have undertaken protest myself. This measure is not to limit protests: it does not prohibit or restrict peaceful protests, but there is a balance to be struck, and the right to protest does not extend to causing serious disruption to or imperilling that key national infrastructure.
Finally, the noble Baroness’s amendment includes an assertion that
“sufficient steps to end animal testing have not been taken”.
I referred in my opening remarks—I put those at the top of my speech, because I am quite proud of this— to the fact that my noble friends Lord Vallance and Lady Hayman of Ullock have, with me, brought forward a manifesto commitment in the first year of this Labour Government to publish a strategy to replace animals in science. It sets out how we will create a revolutionary research and innovation system that replaces animals with alternative methods, the key caveat being “wherever possible”. That technology, which my noble friend is very much on top of, will develop. We hope to replace animals in science as we can and to phase them out, in line with our manifesto commitment.
Through the Office for Life Sciences, my noble friend Lord Vallance has allocated £75 million in funding alongside publication of the strategy to help ensure that we can develop those alternatives, which will support laboratories in moving away from animal testing and adopting safe, proven alternatives. Nobody in this country of animal lovers wants to see suffering or their unnecessary use. The Government’s plan will support that work to end animal testing, wherever possible, and roll out alternatives as soon as it is effective and safe to do so. In doing so, that will contribute to the export potential and the growth agenda for this country, and the serious scientific research that this country can utilise to make a difference in the world at large.
Baroness Bennett of Manor Castle
As an amendment to the above motion, to leave out from “that” and to insert “this House declines to approve the draft Public Order Act 2023 (Interference With Use or Operation of Key National Infrastructure) Regulations 2025 on the basis that they are legislative overreach; they extend the definition of “critical national infrastructure” beyond its appropriate meaning; the practical need for such an extension has not been adequately justified; they represent a further restriction on the democratic right to peaceful protest; and sufficient steps to end animal testing have not been taken.”
Baroness Bennett of Manor Castle (GP)
My Lords, I thank the Minister for both outlining the statutory instrument and explaining my amendment to decline to approve it. I am going to structure my speech in an unconventional manner, starting with the points that I know the fewest people in this Chamber will agree with, moving backwards through the order in the amendment to the point that I believe that most people in this Chamber, particularly the Benches to my right, might be persuaded to agree with. I will finish not on points about animal testing or the right to protest, but on the basic constitutional understanding that statutory instruments are a way in which the law can be illegitimately extended well beyond the original intentions manifested when it was democratically debated, pored over and scrutinised, in both your Lordships’ House and the other place. This statutory instrument is a notable and dangerous piece of legislative overreach.
I start with animal testing, the phasing out of which, as the amendment says, is not going nearly quickly enough under the replacing animals in science strategy. Why do I argue that this is too slow? It is for morality and for efficacy. There is public revulsion, yes, which results in widespread peaceful protest about the treatment of more than 2.5 million animals a year used in medical research here. More than that, there is a recognition of the inadequacy of animal testing, the “valley of death” that sees drugs apparently showing promise in animals failing to work in humans. Animal Free Research UK reports that that is the case for over 92% of drugs, and that failure makes up 75% of the cost of drug development. As an entire edition of the journal Frontiers in Immunology published in 2024 points out, there are 90 million years of evolution between humans and rodents.
However, there are alternatives. Our Minister, the noble Lord, Lord Vallance of Balham, said last November:
“Now, new advances in technology—particularly AI and genomics, but also organoid and 3D cell systems—finally allow us to see a path to changing our reliance on animals in science”.
But this SI will be an active discouragement to the commercial companies to push on in this direction, the direction in which the Government say they want to head and for which public pressure—democratic forces—is clearly important.
My second argument, to quote the amendment, is that the SI reflects
“a further restriction on the democratic right to peaceful protest”.
That was the key concern in the debate on the SI in the other place of many of the 26 Labour MPs who voted against it. The Mother of the House, Diane Abbott, was among the 110 “no” tally. Among the Labour opponents were Stella Creasy and Kerry McCarthy, former Shadow Minister of State for Defra and a former Minister for Climate. As was suggested after the debate by Neil Duncan-Jordan, the Labour MP for Poole:
“This proposal treats private, often American-owned companies the same as airports, motorways and utilities. It shields private profits from fair criticism and puts them above our right to protest. That is not right”.
Protest is part of our political system, and it is a crucial part of delivering democracy. The Minister suggested that recent developments in protest had demanded that this SI be brought in. I can go back to the 19th century, when the UK was a leader in protest movements, such as anti-vivisection, through the Cruelty to Animals Act 1876.
I have circulated two briefings to noble Lords. One of those represents some 21 signatories, among them Protect the Wild, Camp Beagle, Medicine Without Cruelty and the Network for Police Monitoring, known as Netpol. It says that some 30,000 emails have been sent to noble Lords; I apologise to the many who have written to me personally, but I do not have the capacity to respond individually. Together with the other briefing written by Naturewatch Foundation, and supported by 26 other signatories, including Cruelty Free International, Wildlife and Countryside Link, Lush cosmetics and the Animal Law Foundation, this indicates that the SI in question represents a significant and unprecedented expansion of public order powers—already some of the most far-reaching protest-related restrictions in recent UK law—and would extend them to a broad and very loosely defined sector. When it comes to animal testing, the Government have failed to demonstrate why existing laws covering harassment, obstruction, criminal damage and public order are not already sufficient.
I turn to what I believe is my point of broadest appeal, and an appeal of considerable constitutional significance. I thank Jennifer Scotney, our staff member, for going through all the debates on the original Bill. In the Commons Public Bill Committee, the right honourable Kit Malthouse stated:
“The offence will cover major roads, railways, airports, harbours, and downstream oil and gas infrastructure”.
The Explanatory Notes to the Bill list transport and energy, and add newspaper printing infrastructure, but Parliament did not scrutinise life sciences as key national infrastructure. Its later inclusion relies solely on delegated powers and was not the original legislative intent. KNI was identified as specific, identifiable physical systems whose operation underpins daily life. Life sciences, by contrast, is a broad sector, operating largely on private land, consisting of thousands of sites of varying importance. To quote the right honourable Kit Malthouse again:
“Minor infrastructure such as undesignated roads and small-scale power stations will be out of scope”.—[Official Report, Commons, Public Order Bill Committee, 14/6/22; col. 134.]
If minor or diffused infrastructure was deliberately excluded, a whole commercial research sector cannot logically fit within the definition. The National Police Chiefs’ Council testified that it would have concern about an explicit duty being placed on policing to deal with an activity on private land.
Emergency services, health, and food services were explicitly rejected as not being suitable for inclusion in the Bill; Ministers said that they were not in scope. In Committee in the Commons, Sarah Jones MP proposed adding emergency services; this was rejected by the Minister. The response in the Commons to a proposal suggesting adding farms and food production was that this would
“significantly increase the scope of the Bill”.—[Official Report, Commons, 18/10/22; col. 606.]
In our own House, the noble Lord, Lord Sharpe of Epsom, the then Conservative Minister, said
“we do not believe it is necessary to add … into the list … at present”.—[Official Report, 16/11/22; col. 936.]
referring to other sectors. If ambulances, hospitals and food supply were excluded for being too expansive to be included in the Bill, life sciences represent a clear shift beyond Parliament’s stated limits for the Bill.
Ministers justified the secondary legislation power on the basis that new forms of infrastructure might emerge, or novel protest tactics might target previously unforeseen sites. Protests at animal testing and life science facilities, however, are long established—going back to the 19th century, as I said—well known and were explicitly referenced during the passage of the Bill. Martha Spurrier of Liberty, at the Commons Committee stage, said:
“If someone locks themselves to an animal testing centre … the police have to work out at what point that person’s right to”
protest
“becomes an infringement of other rights”.—[Official Report, Commons, Public Order Bill Committee, 09/06/2022; col. 72.]
Parliament was already aware of protests at animal testing facilities and discussed them as part of the existing protest landscape, managed under existing regulations and human rights law, not as a justification for redefining infrastructure.
I come to the broader position in which we are debating the SI. The Public Law Project website says that
“for as long as delegated legislation has existed there have been concerns about the way it is used. Sometimes the Government leaves difficult and controversial matters of policy to Statutory Instruments so that the Government can avoid the difficulties of having to pass a law”.
I posit that this is happening here.
I have been in your Lordships’ House for more than six years, so I have heard many debates along the lines of a 2014 report from the Hansard Society titled: The Devil is in the Detail: Parliament and Delegated Legislation. That report says, and this is the key part of my argument, that:
“The House of Lords should make greater, albeit judicious, use of its power of veto”
when referring to SIs. I put it to the House, and particularly to the Conservative Benches, who I know in general are extremely reluctant to vote for fatal Motions, that this would be a judicious—indeed, a critically important—use of their vote on this occasion, a vote for something we often hear championed from those Benches for free speech.
I state only the obvious when I say that politics is now in a great state of flux and the future is highly uncertain. The principle of far extending the original intentions of a Bill—which could be stopped through a mechanism that His Majesty’s loyal Opposition have in their hands but decline to use—could, in the future, be a far graver threat to the nation’s liberty than even what we have before us today. Does Parliament make the law, or have the Executive morphed into a monstrous Henry VIII hologram, saying that the law means whatever they say it means? In this age, particularly, that is a very dangerous precedent to set. I beg to move.
Lord Kerr of Kinlochard (CB)
I did not agree with the noble Baroness, Lady Bennett, about Just Stop Oil blocking motorways and I do not agree with her now about animal testing, which must be carefully controlled but is still essential, but I come to the same conclusion as she does for the constitutional reason that she gave as the last of her indictments.
I strongly agree with the Government about the importance of the life sciences sector. I was chairman of Imperial College; I know a bit about it. The point where I disagree with the Government, and strongly agree with the noble Baroness, is on whether a research laboratory can properly be designated as key national infrastructure under the 2023 Act.
Section 7 of the Act makes it an offence to interfere with the
“use or operation of any key national infrastructure”.
It defines key national infrastructure rather precisely, as the Minister read out. There are eight categories; seven are to do with transport and the eighth, rather oddly, is about the production of newspapers—presumably the connection is communication. Section 7(7) of the Act permits the Secretary of State to add further infrastructure. Hence this SI.
In all our debates, no one ever mentioned laboratories. When we were passing this Act, animal welfare did not come up. We thought we were dealing with oil, gas, rail, road and air, because that is what Ministers and the Bill said. If we were thinking of what extra—
Lord Winston (Lab)
Does the noble Lord accept that proper animal research goes on well beyond laboratories, in fields and many other places? He underestimates the issue in considering laboratories; it is far wider than that.
Lord Kerr of Kinlochard (CB)
I thank the noble Lord, but I think I will stick to my line of argument. I do not think we discussed laboratories. Hansard shows that we did not.
It is important to remember that the demonstrator outside the factory or laboratory is already covered by the Act because he is obstructing the road. He is probably already covered by the Public Order Act 1986, but he is certainly covered by the 2023 Act. Road transport infrastructure is right at the top of the list of “key national infrastructure”. This statutory instrument will add the laboratory or the factory itself, not access to it, and deem it national infrastructure that is key to the nation. That is quite a stretch. If the pharmaceutical industry is key national infrastructure, what about food production or distribution, the NHS or radio and television transmitters? All three cases seem more plausible than a life sciences factory or laboratory.
I agree with the noble Baroness that this statutory instrument would set a dangerous precedent. It is in the spirit of Igor Judge, whom we miss so much, that I register my unease. Unlike Igor, I cannot add an apposite reference to Thomas Cromwell, but he always warned that the temptation for the Executive is always to push the legislative boundaries. I have worked in the Executive; I know that he was right. This instrument pushes the boundaries too far, and we should push back.
Lord Winston (Lab)
My Lords, I declare an interest as having been in this House a little longer than the noble Baroness, Lady Bennett. I have great respect for many of the things that she has said, and we have worked together on other Bills. Over 50 years, I have continued to do animal research and held a licence under the Home Office. My laboratory, where I still have some work going on, uses animals and will have to continue to do so for the research it is doing. We have to consider that.
It is important that animal research is seen as a respectable endeavour and is properly policed, which, on the whole, the Home Office does exceptionally well. I am grateful to the Minister, who has given a very good speech explaining how this has been done in this House and that the Government need to try to reduce the number of animals in research, as we are doing and with which I totally agree.
With great respect to the noble Lord, Lord Kerr, I have some problem with his comment, because it would not protect me. I have had, in the years I have been doing research, until quite recently, repeated death threats. I have had Special Branch at my house, with my 94-year-old mother hiding in the kitchen because we thought there was a bomb on the doorstep. We have had a whole range of issues. My friends who worked in the same laboratories have had fires in their houses. We have to understand that this is a very real threat to research. Some people give up research because they get so concerned, not necessarily about the value of the research they are doing but about the reputational risk they run due to the understanding of the work they are doing. We need to make it much clearer why such work is necessary. I suggest to the noble Baroness, with respect, that she is not entirely correct in the reason she gives for it being given up.
There are numerous examples I might suggest to some noble Lords in the Chamber. I have counted that, in the House of Lords and the House of Commons, over my time, there must have been at least 100 families who have benefited from the technique of in vitro fertilisation. That was made possible only by experimenting on animals, to make sure that we were not producing embryos in the human that would be abnormal, distorted or deformed, or that would die after birth or later on. That is one example. Equally, in perinatology, there has been clear evidence that animal research was definitely necessary for understanding the breathing of an animal to learn how we can actually prevent damage to infants. Indeed, years ago, I did some of that research, in a very small way, with mice, along with a man called Jonathan Wigglesworth, who was a very famous scientist —much more famous and a much better scientist than I was. There are numerous examples.
The idea that we can use tissues or embryoids is far from the mark. One of the issues is that, in culture, in any kind of artificial situation which is not an intact animal, there are changes to the cells that we cannot control. That is a really important issue in science, and we have to understand that that is a critical question. It is true, too, in DNA technology—we still sometimes have to have the testing of that. Think of the number of people in this House who have had treatments for cancer that used animal research. Of course it needs to be reduced, but we must understand that the cells we are modifying and then putting back into a man or a woman still need extremal validation.
To some extent, the noble Baroness is, with respect, being a little inconsistent. Some three years ago, she and I worked on the Genetic Technology (Precision Breeding) Bill, which looked at the risks of modifying animals and modifying plants. There was a huge amount of misinformation around that, but eventually it did go through. I never saw then the noble Baroness make the points she now makes about animal research. The moral issues of animal research that she is talking about now certainly did not come up in that Bill. It was much more about making sure that, if we did produce animals in this way, we would not produce abnormal animals that would be poisonous or dangerous or deformed in some way. That is something that we have to consider. This is certainly an issue where she has been, in a sense, on the other side.
That Bill went to Third Reading and got Royal Assent without anybody really complaining about it. If the noble Baroness has complained about it, I certainly have not heard about it. Of course, at this very moment, the Government are considering, as they should, whether it should be implemented. If we do try to modify and improve animal farming and so on in the way that has been proposed, that would affect animal breeding. It is a Bill that I found difficult, but it certainly does not suggest we should not use animals carefully and with great moral care. Therefore, I have to say to the noble Baroness that her amendment is, in my view, unquestionably wrong, and I will certainly want to vote against it.
Baroness Miller of Chilthorne Domer (LD)
My Lords, there is no doubt that the noble Lord, Lord Winston, expresses lots of practical and ethical opinions that we might agree with, but that does not change the fact that this statutory instrument is an outrageous abuse of secondary legislation powers. As the Minister knows, a fatal amendment in this House almost never succeeds—but if ever a statutory instrument deserved a fatal amendment, this is it. I congratulate the noble Baroness, Lady Bennett, on bringing it forward. If the Government had any conscience, they would, even at this stage, acknowledge the abuse and withdraw it.
When the Public Order Bill was debated and agreed in both Houses, the meaning of “major infrastructure” was debated, as the noble Baroness, Lady Bennett, and the noble Lord, Lord Kerr, said. My noble friend Lord Beith, who is in his place, spotted the danger at that time. At Second Reading of that Bill, he said:
“I question the provision of Clause 7(7) which allows the Secretary of State to add to the list of key national infrastructure by statutory instruments. This could create an enormously wide area of scope for the powers in the Bill”.—[Official Report, 1/11/22; col. 152.]
That is exactly what has happened. How right he was to be so concerned. Indeed, in Committee, the noble Baroness, Lady Chakrabarti, raised the same concerns with her Amendment 38. But now, under a different Government, those fears have been exactly realised. Can the Minister say how wide the statutory instrument casts the net? He talked of some 350,000 employees, which suggests an awful lot of sites and facilities.
This statutory instrument, I maintain, is the clearest abuse of legislative powers that I can remember in my 27 years here. If Parliament passed legislation to quell or curtail protests on major roads and railways, that at least is within the legislation, but this Government are now planning to extend this so extensively that pretty much everything can become national infrastructure. This is another effort by Labour to quell, chill and kill protest.
The Minister will know well that the Crime and Policing Bill is in Committee in your Lordships’ House. That too contains clauses that widen the scope of the criminalisation of protest considerably. The noble Lord, Lord Hanson of Flint, said that the provisions of that Bill will be reviewed by the noble Lord, Lord Macdonald of River Glaven, in a review that the Government commissioned. However, in Committee, my noble friend Lord Marks queried why, having put all that quelling of protest into statute, we would then have a review by the noble Lord, Lord Macdonald. By that time, it will be too late to change it, because it will all be there, and so the review will not count for much. My noble friend Lord Marks fears as I do that, once these draconian laws are on the statute books, they will stay there. If the Government are serious about seeing what the report recommends, they would not rush through this statutory instrument in advance of the report.
When this statutory instrument was debated in Committee in the other place, the Minister’s colleagues were very sceptical about it. Kerry McCarthy, whom the noble Baroness, Lady Bennett, mentioned, said:
“I do not accept, however, that what we are talking about today constitutes ‘key national infrastructure’. I do not think that the country will grind to a halt if MBR Acres is occasionally obstructed from supplying beagles to laboratories for testing”.
Kerry McCarthy has it right there.
Indeed, there were several Labour Members who were very doubtful about this. John McDonnell said:
“I reiterate the concerns that have been raised across the Committee: this warrants a debate on the Floor of the House. It is very rare that this number of Back Benchers turn up, so there is obviously interest across the House in having it properly debated”.—[Official Report, Commons, Delegated Legislation Committee, 17/12/25; cols. 7-12.].
But it was not properly debated; that is what we in this House have to do, to make sure that we return it for further consideration.
Lord Willetts (Con)
The noble Baroness, Lady Bennett, referred in her powerful speech to what she called the “revulsion” against the use of animals in medical experiments. That is why there has been a long-term strategy, reinforced by this Government but also pursued by previous Governments, of the so-called “three Rs”: the reduction, replacement and refinement of the use of animals in medical experiments. That is the right thing to do and I am optimistic that new technologies will make it possible to make much more progress in that direction.
However, meanwhile, we have to engage with the world as it is, and some of the most important features of the world as it is—which have not yet been referred to by noble Lords, including the noble Baroness, Lady Bennett—are the international standards on pharmaceuticals and drugs, many of which require that, before a drug is tested on a human, it should first have been tested on a rodent and a non-rodent. That is the legal regulatory environment within which all life science companies currently operate. It means that the production, export and import of large amounts of medical treatments—pharmaceuticals—have to comply with that international agreement, to which most countries, including the UK, have subscribed. I did not hear the Green Party say that it thought we should withdraw from that international agreement.
Therefore, if animals, both rodents and non-rodents, are to be used before a drug is tested on a human, we need a supply of those rodents and non-rodents. As Science Minister, I saw the extraordinary range of activities by protesters going way beyond the normal human right to protest, which of course we must support, and designed to make it impossible for the UK life sciences industry to comply with the international regulation to which we were all committed. Compliance with that regulation is necessary for our wider access to drugs and capacity to innovate and produce new drugs.
There has been discussion of national infrastructure, as if somehow we are talking about provisions that would immediately be applied to every pharmacist or every life science lab. What is actually shocking, when you look at it close up, is how we are dependent on a very narrow range and extraordinarily small number of facilities to enable us to comply with those international requirements. If we were to lose those, it would not be a matter of protests outside every pharmacy: if we were to lose a very small number of key facilities, our capacity to respond to medical emergencies and deliver up-to-date medicines to people through the NHS would be much diminished.
I understand the noble Baroness’s challenge, but I am in no doubt that the facilities that enable us to comply with those key regulations applying to pharmaceuticals are absolutely part of key national infrastructure. Surely, the lesson of Covid is how important that capacity is. Of course it is right for us in this House to consider whether the proposal is within the terms of the provisions for national infrastructure. But, having observed at close hand what we depend on for drugs and services that we take for granted, I am in no doubt that it is.
Baroness Fox of Buckley (Non-Afl)
My Lords, I just want to throw in a bit of a spanner—which is to say that I am completely torn between the two sides. It might be helpful to explain my dilemma. First, I would like to give real credit to the noble Lord, Lord Winston, for the work that he has done scientifically and the need to use animals in experiments, which he explained. I was partly moved to speak because I was a great admirer of, and friend of, neuroscientist Professor Colin Blakemore, who died a few years ago. I just wanted to note that he had to heroically stand his ground against intimidation, harassment, threats of violence and actual terror, which was deployed—not just against him—by animal rights activists.
He and other less well-known scientists, medical researchers, and staff in academia and in private companies were confronted by abuse and accused of conducting a holocaust—a completely inappropriate use of the term—on animals that was worse than the Nazis. I witnessed some of that.
This was long before organisations such as Just Stop Oil and Palestine Action arrived on the scene, which blur the line between the democratic right to protest and the anti-democratic bullying of the public and institutions to do as the activists demand. That presents us with a genuine dilemma. I support the right to protest, but I sometimes worry that that right is used to justify people who are not interested in protesting but are interested in effecting the stoppage of a particular activity physically and through bullying people.
Having said all of that, I want to ask the Minister why this sector has come into scope only now and not before. I genuinely do not understand. Why has it been introduced as a statutory instrument, with no possibility of opposition, apart from via a fatal amendment? I was one of those people who was very worried about the Public Order Act and the powers handed over to the Secretary of State, precisely because I was worried that the Secretary of State could redefine what national infrastructure projects were—and here we have it. That has been very well explained.
I also feel rather squeamish about our emphasis on life sciences as an industry and national infrastructure without it being defended as scientific research for its own sake. I wish I had heard so much defence of the importance of animal research by politicians on all sides when those scientists were being attacked. I think of animal research in terms of epilepsy drugs, Parkinson’s disease, anti-cancer drugs and therapies such as Herceptin and tamoxifen. I find it disappointing that we stand up to defend it only when it is an industry that makes money. There is more to scientific research and animal research than that, surely.
However, I was also disappointed by the noble Baroness, Lady Bennett, and, particularly, by the briefings —goodness knows I received many of those emails. On the one hand, I agree with the right to protest and the concerns about constitutional overreach; I actually thought the noble Lord, Lord Kerr, made some really excellent points—it is not often we agree—as to why this is slightly nerve-wracking. On the other hand, in all the emails I received—in fact, this was reproduced here by the noble Baroness—I have been lectured on the dangers of animal research, and I end up feeling that what I am being asked to vote on is whether I think animal research is important for medical science. I understand the three Rs, including replacement, and that it is not where we are going, but it is so important to emphasise that this animal research is going to carry on for some time—we cannot be dishonest about that. Therefore, if I am being asked to vote on this fatal amendment—and if it has been turned into a way of demonising researchers who work with animals—then I will either not vote for it or abstain.
I ask the Minister: why now? Why did he, or anybody else, not raise this before? I say to the noble Baroness: can I risk siding with people who are going to lecture us and make hectoring demonisations of the perfectly legitimate—and, in my view, heroic—scientists who do animal research? It is necessary for humanity, whatever its relationships with the economy.
Lord Trees (CB)
My Lords, I declare my interests as co-chair of the All-Party Parliamentary Group for Animal Welfare, a former president of the Royal College of Veterinary Surgeons and, more pertinent to this debate, a former named veterinarian—more than 30 years ago, I stress—to a university animal unit.
I realise that this issue is contentious and emotive, and I understand people’s concerns. However, with respect, I note that this is not the place to debate the provision and use of animals in research; it is about balancing free speech and the right to protest with the lawful pursuit of highly regulated legal activities of great benefit to humans and animals. Therefore, I speak in support of these regulations and to oppose the fatal amendment.
The fatal amendment speaks of “legislative overreach” and suggests that it extends “critical national infra- structure” beyond its meaning. I will challenge that. The Public Order Act allows the Secretary of State to make different provision for different purposes—that was agreed by Parliament in the passing of that Act. Our biosecurity is more vulnerable than ever. We are threatened by potential epidemic or pandemic outbreaks of infectious disease in either humans or animals; I point out that foot and mouth disease, for example, is on the National Risk Register. Whether a disease outbreak occurs spontaneously or by bioterrorism—let us not forget that risk—it presents a huge threat to our food security, our animal health, our human health and the economy. I am satisfied, and indeed heartened, to see that life science establishments—which help us detect, manage or prevent those very serious events that I have mentioned—are regarded as critical national infrastructure.
The fatal amendment asserts that there is a lack of justification for the regulations and that they will facilitate
“a further restriction on the … right to peaceful protest”.
However, this SI does not change or extend any sanctions or restrictions already included in the Public Order Act 2023; it simply adds another type of infrastructure. I also note that the police believe that the current powers under the Public Order Act 1986 and the Serious Organised Crime and Police Act 2005 are insufficient in this case.
I cannot see that peaceful protest is in any way prevented but I am aware that protest actions in several sites have included things like spike devices being hurled into facilities to damage vehicles and puncture tyres, spray painting the homes of animal care staff, other harassments, and personal threats and criminal damage, often by masked individuals, which go way beyond peaceful protest and are clearly designed to close down facilities. As someone who has known first-hand the exemplary skill and care with which animal technicians treat the animals they look after in research establishments, I am appalled that staff are treated by some demonstrators so nastily that they are frightened to go to work. In the UK, labs that might use animals, whether for life science, medical or veterinary research, and the facilities that support those labs, are highly regulated and carry out legal activities of incredible value to human and animal health and welfare.
Baroness Miller of Chilthorne Domer (LD)
Perhaps I may clarify, as a member of the Joint Committee on Statutory Instruments, that this matter was raised and the chairman, Sir Bernard Jenkin, told us that it was not for us to discuss whether the statutory instrument was correct. The job of that committee is to discuss whether the instrument is defective or duplicative, but not its general purpose. I take that to be the case.
Viscount Stansgate (Lab)
My Lords, I am pleased to follow my noble friend Lord Trees. I support the regulations. I should also like to thank the noble Baroness, Lady Bennett of Manor Castle, for having tabled this amendment because it enables the House to consider matters we do not often have the chance to hear about or discuss, and they are important. It raises difficult and sensitive issues because, as the House knows only too well, it refers in great part to the use of animals in research.
I doubt whether there is a single Member in this House who positively wants to see animal testing and research if it can be avoided, and the Government are rightly committed to ending it. I was pleased to hear the noble Lord, Lord Willetts, commend the Government for their current commitment to phase out this research and I, in turn, commend the noble Lord for being on the same trajectory when he was in government and for the support he has given. Reference has been made to the document published last year, the three Rs and so on.
For the time being animal research remains an essential component of scientific and biomedical research, and it helps ensure that potential new drugs, vaccines and medicines are safe and effective. My noble friend Lord Winston referred to some of the benefits of this research. As I understand it, certain anaesthetics have been made possible only because of animal research, and who among us has not benefited from anaesthetics? The research is fundamental to advancing our understanding of complex biological systems and disease mechanisms and it plays an important role in safeguarding human, animal and environmental health. As has been said by several noble Lords, it is critical to responding to health emergencies, including a future pandemic, which none of us wants to see but which remains one of the most significant threats to our national security. Scientific advances are being made by the life sciences community, but we must recognise that alternatives are not yet mature enough in complexity and application to replace whole-animal models. The UK must support a balanced research ecosystem that enables both high-quality animal studies and the responsible development of animal methods.
This brings me to the amendment. I do not have time to talk about some of the constitutional points made by the noble Lord, Lord Kerr, and the noble Baroness, Lady Bennett. I have some sympathy when I hear references to Henry VIII clauses and so on, but I do not think this is the subject of today’s debate. The problem, as I see it, is that certain parts of the life sciences sector are facing unacceptable and unsustainable pressure from the non-peaceful actions of campaigners, however understandable, that threaten the integrity of the sector. I have visited some of these research establishments and spoken to scientific researchers who have been assaulted and suffered intimidation, so I understand the point made by my noble friend and others. The systematic targeting of key strategic points in secondary and tertiary supply chains is having a serious effect, and the knock-on effects of disrupted research, hostile working environments and escalating security costs are already raising concerns in the life sciences sector about the future viability of research and development in the UK.
If this research were to leave the UK, so would investment, talent and our research infrastructure, which would permanently damage the UK’s sovereign capability to develop medicines and to respond to future health emergencies. It is against this background that I put it to your Lordships that there is a case for designating life sciences establishments as part of critical national infrastructure. Incidentally, in the context of the changing geopolitical world in which we now live, this House heard references not that long ago to the vital importance of undersea cables and space infrastructure. As has been pointed out, this research is also economically important to the UK: over 300,000 people are employed in the life sciences sector.
The right to peaceful protest should be protected. In my view, it is essential in a democracy. It is the non-peaceful systematic disrupting of supply chains by campaigners that could lead to an erosion of our national research, and the damage would be permanent. It would undermine the Government’s plans for growth in the life sciences sector, lead to adverse health outcomes for UK civilians, and leave the UK reliant on foreign assistance in future pandemic scenarios.
Finally, is this proposed legislation at odds with the Government’s alternative strategy? I do not think it is. It is important to realise that it is the same scientific community who use animal models who are the most heavily invested in driving alternatives forward. If the UK infrastructure supporting animal research collapses, that will collapse the same infrastructure that supports the development of alternatives. Not only does this pose a significant threat to public health outcomes, but it could damage the UK’s ambitions to be a leader in non-animal alternatives. For these reasons, I hope the House will think carefully about voting for this fatal amendment, however well-intentioned it may appear to some noble Lords to be.
Viscount Camrose (Con)
I had planned to make a number of points in this debate, but I am pleased to see that they have all been made for me in far more elegant style than I could have attained myself. I will emphasise one point that has not had quite enough attention yet, and that is that this country is a world leader in animal welfare in the life sciences and in the development of products from the life sciences.
If protesters succeed in their aims, they will not stop animal research; they will export it overseas. The countries to which they will export it may indeed be able to match our research excellence, but they could not, I suspect, match our commitment to animal welfare. For this reason particularly, but for a great many other reasons noble Lords have raised, I oppose the amendment.
Lord Sentamu (CB)
My Lords, my contribution will be very brief. It is the job of His Majesty’s Government to introduce regulations and laws. The Minister is today presenting to us draft regulations which were laid before the House on 27 November 2025, some months ago, for approval.
The point for me is that this is the 45th report from the Secondary Legislation Scrutiny Committee. It has scrutinised and gone through it all. What has it decided in the end? That it is expedient. It has no negative comment about it. Either we trust our Secondary Legislation Scrutiny Committee, or we do not. As a House, we make that committee. That is the battle.
In the end, I have to support the approval of these regulations because I trust our Secondary Legislation Scrutiny Committee. Where it has not found an SI expedient—I remember my history of your Lordships’ House from 2005—it has sent it back, but it has not done this now. We should follow our processes and procedures and go ahead and approve it.
The Lord Bishop of Manchester
My Lords, it is always a pleasure to follow my noble and right reverend friend. I will be brief. It has been very clear to me in this debate that we need the life sciences in this country, and we probably conduct them in a better manner than many other parts of the world do, and that is a good reason for maintaining them here.
I am really grateful for what the Minister said in opening: that we are hoping to phase out animal testing as quickly as we can, but that is not practicable yet. Many of the horrendous examples referred to, such as the death threats received by the noble Lord, Lord Winston, and the throwing of spikes, are criminal offences already. We do not need to add them to the schedule to make them criminal offences. We need to be clear that this is about adding actions that are not crimes at the moment to what is criminal.
As the conversation has gone on, I have become concerned about legislative overreach. I am concerned not just about this instance; this House and this country work on precedent, and if we allow secondary legislation to make such a change today, what will inhibit future Governments in making even more egregious changes through secondary legislation—or Henry VIII clauses if we want to call them that?
Although I cannot vote in favour of the fatal amendment today, having heard your Lordships’ debate, I would appreciate some reassurances from the Minister. What are the limits? How wide could this go? Does today not set a precedent that will enable future Ministers to place very wide statutory instruments before us that go beyond what was discussed when the original Bill was considered?
I would have preferred that this be dealt with separately through a small Bill, but we are where we are.
Lord Sikka (Lab)
My Lords, I will be brief. I have a number of concerns. This SI is part of a trend towards silencing dissent to protect corporate interests. It is hard to think of any legislation in recent years which has enhanced people’s right to dissent or protest, even though almost all emancipatory change has been the outcome of protests.
We seem to have a kind of social evolution in reverse here. There does not appear to have been much public consultation on this SI, either. The Explanatory Memorandum accompanying the SI states that the consultation
“has taken place informally via engagement with key stakeholders, including the National Police Chiefs’ Council, the National Police Coordination Centre, and local police forces who regularly police protest activity targeting the Life Sciences sector”.
No mention is made of any discussion with civil society organisations or any public invitation to comment on the SI. So it appears that “informally” just means discussing it with some highly privileged parties, which seems to exclude the public in general.
Lord Cromwell (CB)
My Lords, I have listened to a fascinating debate—some of it moral, some of it technical and latterly some of it even economic. But the amendment to the Motion asks us to make a simple decision: is it a case of overreach to define animal testing as national infrastructure? If it is overreach, we should support the amendment; if it is not, we should resist it. We each need to come to our own conclusion. I hope that we will have an opportunity to do so relatively soon.
Baroness Jones of Moulsecoomb (GP)
My Lords, every noble Lord has said that they will be brief but then quite a lot are not. I will do my best to be brief.
First, I agree with every word that my noble friend Lady Bennett said. She summed up the problems we in this Chamber face.
Secondly, I have said many times in this Chamber, on many Bills, that this Government are putting in more and more repressive legislation. They are getting worse than the previous Government and are just adding to their oppressive agenda. The Labour Party is failing the nation when it keeps adding crime after crime into anti-protest legislation.
I am sure the Minister knows that the six Palestine Action activists who were imprisoned and went to court came away without having any charges against them corroborated. They are free. It seems that this legislation will make things even more complicated for the police. Again and again, the police say that all the legislation relating to protest is too complicated at the moment, needs streamlining and needs to make more sense. Like it or not, this Government are losing the public. If a jury cannot find against six people who broke into a factory and smashed things up, they are losing the public. The public are saying to them, “We just don’t believe you any more. You are pushing things to far”. If the Government could not even get that case through the courts, they have wasted police time and court time, and have made the lives of those six people unpleasant and nasty for some time. This is overreach; the Government know it is, and they should not do it.
Baroness Grender (LD)
My Lords, these Benches will support the amendment tabled by the noble Baroness, Lady Bennett of Manor Castle, if she decides to test the opinion of the House. I thank all Peers across the House for their powerful contributions on transparency, proportionality and the right to dissent.
The UK’s life sciences sector is something that we should cherish. It is a jewel in our economic crown, generating tens of billions of pounds in annual turnover and employing hundreds of thousands of people across the country. However, the protection of this essential industry, while necessary, should never come at the expense of our fundamental democratic freedoms. Sadly, this statutory instrument is on the wrong side of that argument. Time and again, as my noble friend Lord Beith set out, the previous Conservative Government undermined the right to peaceful protest by passing sweeping unnecessary powers that went far beyond what was needed to maintain public safety. I argue that even at that time, the law covered non-peaceful protest, as has been described by some Members in this debate and set out in the very powerful arguments of the right reverend Prelate the Bishop of Manchester.
We on these Benches consistently opposed the Public Order Act 2023, viewing it as a troubling example of the criminalisation of peaceful dissent and an unwarranted expansion of policing powers. It is therefore heartbreaking to see the new Government choosing to follow this same path rather than reversing some of those damaging restrictions. The regulations seek to rebrand ordinary research and manufacturing sites, including those licensed under the Animals (Scientific Procedures) Act 1986, as key national infrastructure. This designation risks turning legitimate peaceful protest into a criminal offence, carrying a penalty of up to 12 months’ imprisonment. To place a pharmaceutical laboratory or a beagle breeding facility on the same legal footing as our energy networks, transport hubs or the M25 is, I believe, overreach.
Peaceful campaigners, including those raising ethical concerns about animal testing or pharmaceutical oversight, should not be treated as threats to national security. The Government justify this expansion by citing pandemic resilience, but the facilities being protected often have, at best, an unclear or indirect link. Despite the Government’s focus on vaccine production, we still have no clear public evidence that facilities such as MBR Acres have played a direct role in Covid-19 vaccine development. Yet they are folded into these protections in the name of pandemic resilience.
The police already possessed strong powers to deal with dangerous or obstructive behaviour, such as has been described in the Chamber today. Long before these new laws were imposed, powers under the Public Order Act 1986 and other legislation already provided a robust framework to address criminal damage, harassment and trespass. The Government have yet to provide compelling evidence that those existing powers are inadequate rather than simply less convenient.
We must also consider the lack of transparency and the absence of a rights-based impact assessment for these measures. Section 24 of the Animals (Scientific Procedures) Act 1986 restricts public information about these sites. Ironically, individuals may therefore find themselves criminalised for protesting near a facility that they did not even know was now designated, under this new system, as “protected infrastructure”. This is not just legal overreach but an outrageous expansion of state power that avoids meaningful public consultation and accountability, as was set out so eloquently by the noble Lord, Lord Kerr.
This proposal also sits in stark contrast with the Government’s own replacing animals in science strategy, as set out so ably by the Minister. To publish a road map for phasing out animal testing while simultaneously shielding those same facilities from public scrutiny and peaceful protest sends, at the very least, an inconsistent message. Throughout this debate, noble Lords have reminded us that the right to peaceful protest is a cornerstone of our democracy, not a privilege to be granted or withdrawn at the convenience of those who rule. Those who stand outside those sites are people who care deeply about animal welfare, scientific integrity and the kind of country we want to be. We should not treat people holding placards outside laboratories as if they are saboteurs of the national grid. I believe I have already covered anyone who has been violent and not been peaceful.
As ever, both the Conservative and Labour Benches are squeamish when it comes to fatal Motions. My suggestion to both those parties would be: in that case, do not use sweeping powers that diminish citizens’ rights through unamendable legislation. While Labour have been consistent on this, many years ago their own noble Lord, Lord Cunningham, produced a report suggesting that fatal Motions should sometimes be used. Even our new Lord Speaker has been known to support a fatal Motion or two from the Conservative Benches. More recently, we had a report from the Delegated Powers and Regulatory Reform Committee, whose conclusion was stark:
“The abuse of delegated powers is in effect an abuse of Parliament and an abuse of democracy”.
The regulations we are debating today are an appalling example of just that, as was so ably explained by my noble friend Lady Miller.
For all these reasons—the lack of necessity, the absence of transparency, the inconsistency with stated policy on animal testing, and the chilling effect on peaceful protest—I urge noble Lords to support the amendment to decline the regulations and to uphold our tradition of lawful, peaceful dissent.
Lord Davies of Gower (Con)
My Lords, this has been a passionate debate, which we on these Benches welcome. Dealing with the statutory instrument before us gives us the opportunity to recognise the importance of our life sciences sector to public health, national resilience and the wider economy. It is therefore right that they should work and operate without sustained disruption, intimidation or obstruction.
The regulations, as outlined in the debate, extend the definition of “key national infrastructure” to include the life sciences sector. In doing so, they ensure that the police have access to a clear and consistent set of powers where protest activity moves beyond lawful expression and into serious interference with the use or operation of critical facilities.
It is important to be clear about what this instrument does and does not do. It does not prohibit peaceful protest, nor does it seek to suppress legitimate debate, including on matters that attract strong and sincerely held views. The right to protest remains a fundamental one. What these regulations address is conduct that is deliberately disruptive, sustained or targeted in a way that prevents lawful activity from taking place and places staff, researchers and patients at risk. Life sciences facilities have in the past been subject to precisely that kind of activity. Existing public order powers can be complex, reactive and fragmented. By bringing the life sciences sector within the framework established by the 2023 Act, the regulations provide greater legal clarity, earlier intervention where appropriate and a more proportionate and effective response to serious disruption.
We also note that the instrument is tightly focused. It does not create new categories of protest offence but applies an existing regime to a sector whose importance to the national interest is clear. The offences remain subject to established thresholds, safeguards and oversight, and their application must continue to respect the principles of necessity and proportionality.
For those reasons, we on these Benches are satisfied that the case for this instrument has been made. It strikes an appropriate balance between protecting critical national infrastructure and safeguarding the right to peaceful protest. We therefore support the regulations and believe that the House should approve them.
Lord Hanson of Flint (Lab)
My Lords, before the noble Baroness, Lady Bennett, responds on her amendment, it is important that I respond on behalf of the Government to some of the points that have been raised. I do not intend to repeat the discussion points in my opening speech, but some of them may be referred to because they have generated debate. This debate has generated a lot of interesting and important points of principle, and I am grateful for the contributions. I shall respond to four broad points: the right to protest, the SI provision use, the use of animals in science and—the big question—why now? I will address those in turn.
The right to protest was raised by a number of noble Lords, including the noble Baronesses, Lady Grender and Lady Jones of Moulsecoomb, my noble friend Lord Sikka and the noble Lord, Lord Davies of Gower, speaking just now from the Front Bench. I want to be clear right now in front of this House: as I said in my opening statement, this is not about the rightful, peaceful protest which is a fundamental part of our democratic society. This measure does not prohibit or restrict peaceful protest. However, peaceful expression does not extend to causing serious disruption to the hard-working majority in the businesses in question.
Baroness Bennett of Manor Castle (GP)
My Lords, I thank the Minister and everyone who has taken part in this careful, informed and widely acknowledged to be important debate. I express my great sympathy to the noble Lord, Lord Winston, and all his colleagues who have been subjected to utterly unacceptable and illegal pressure as a result of their work. All the things that have been alluded to are illegal, remain illegal and I am sure will always be illegal. That is not what this instrument is talking about.
On the point of the Genetic Technology (Precision Breeding) Act, the noble Lord indeed was very helpful and we had a great deal of useful interaction when it was a Bill. I always opposed that Bill and I look to an article I wrote for Left Foot Forward on 25 January 2023, saying that this Bill should not go forward. That was, remained and still remains my position.
I will pick up on a couple of points made by the noble Lord, Lord Willetts, who said that international standards demand animal tests. Besides the UK there are, of course, many other countries looking to move at pace to get away from animal tests. I point in particular to leading action in India, the Netherlands and even the United States. As in the UK, all those actions are informed, and to some degree driven, by protests. That is part of the political process that is pushing in that direction.
The noble Lord, Lord Willetts, also unintentionally provided an argument against the Minister’s claim that this SI has be approved now, otherwise we will halt the approval of biocides and medicines, et cetera. The noble Lord referred to his time as Minister for Science. I looked up the dates: it was from 2010 to 2014. He said that even then unacceptable protests were happening. There is no evidence of anything new happening that justifies this SI.
I turn to the points made by the noble Lord, Lord Trees, who said that peaceful protest was not in any way stopped. I will pick up also on points made by the noble Baroness, Lady Grender, and by my noble friend Lady Jones of Moulsecoomb. This was published without a full rights-based assessment. Ministerial responses to parliamentary questions have failed to rule out online activity or information sharing as not falling within scope. That puts NGOs and campaign groups at risk of criminalisation for lawful and utterly reasonable advocacy of boycotts, for public awareness campaigns and for education programmes. The noble Baroness, Lady Grender, made the point that people are not allowed to know where these facilities are but could be criminalised for protesting near them, which really does identify the problem.
The noble Lord, Lord Sikka, pointed out that there has been only one direction of travel over many years: the rights of people are going backwards while the rights of corporations are being advanced. That is what is happening and, as my noble friend Lady Jones said, we are seeing juries saying, “Enough is enough, this is not acceptable”. That is a true expression of public will.
I also thank the Minister—and I will round up on this point—for pointing out that this SI is rejectable, this House has the power to do this and this is within the constitution. The reasons why the SI should be rejected were laid out by the noble Baroness, Lady Miller, who said that this is the clearest abuse of legislative power she can remember in 27 years. The noble Lord, Lord Kerr of Kinlochard—
Lord in Waiting/Government Whip (Lord Lemos) (Lab)
I ask the noble Baroness to bring her remarks to a close.
Baroness Bennett of Manor Castle (GP)
This is my last sentence. The noble Lord, Lord Kerr of Kinlochard, conjured up for many of us very fond memories of the noble Lord, Lord Judge. The noble Lord, Lord Kerr, said that this pushes the boundaries too far. Your Lordships’ House has a choice. This is so constitutionally important that I must ask to test the opinion of the House.
China and Japan
(1 day, 10 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord True (Con)
My Lords, I am grateful for the opportunity to ask questions on a Statement by our well-travelled Prime Minister. Actually, we on this side do not criticise the Prime Minister for travelling abroad: it is part of his job. What we do criticise is the devastating impact his policies are having on businesses and jobs here at home. The Prime Minister is also right to say that we cannot ignore China, but in our submission the Government are being weak in the face of the threat China poses to the UK and more widely to the West. Of course, we must engage, but this is not how it should be done. Too many key cards were given away before the visit for almost nothing in return.
Yes, a cut in whisky tariffs and visa-free access—something which many other countries already enjoy—are welcome, but are they the hard-fought victories that come from serious negotiation? I do not think so; though I think the leader of the Liberal Democrats may actually join me when I reflect that I am encouraged to think that at least some in the Chinese leadership might be eased by the civilising impact of the best whisky in the world. The problem is that, before he got on the plane, China had already gained the prize of a mega-embassy here, right in the heart of our capital. It also continues to fund Putin’s war machine. Can the noble Baroness say—and I know the Prime Minister raised this point—whether he feels that we made any progress in reducing China’s support for Russia’s illegal war?
Of course, China continues its oppression of the Uyghur people, who have suffered so much for too long. Did we get any guarantees that any increase in Chinese exports will not be produced by modern slave labour?
The Prime Minister claimed in the Statement that the previous Government were isolationist. I ask: who was first on the front line with Ukraine before and while Putin invaded? If we are talking of Asia and the Pacific, who took Britain into CPTPP? That is the very Indo-Pacific theatre that the Prime Minister rightly visited. We on this side believe strongly that we should look to Asia and the Pacific.
The Government tell us that we need a thawing in our relations with China. Of course, we wish for good relations with all nations, but fine words butter no parsnips. We must not forget that this is a country that spies on us, steals intellectual property and frequently launches cyber attacks.
We welcome that the Prime Minister raised words of protest about the totally unacceptable incarceration of Jimmy Lai. When will we know what comes of that? Did the Prime Minister, who is forthright on the importance of law and justice, condemn China’s flagrant and continuing breaching of treaties on Hong Kong and its oppression of people there?
We are told that China agreed no longer to sanction the noble Lord, Lord Alton of Liverpool, and the noble Baroness, Lady Kennedy of The Shaws. Stopping doing one wrong thing is fine and dandy, but when will China answer the cries of those noble Lords and of so many in this House for an end to the terrible wrong of the appalling treatment of the Uyghur people?
Can the Lord Privy Seal assure us that the Prime Minister raised Chinese intellectual property theft with President Xi during their meeting? This is a grave and continuing problem. What assurances may we have secured on the cyber attacks launched by Chinese state actors? When will they end, and who will be punished?
I turn to Chinese espionage. We all know for a fact that agents of the Chinese state seek and have sought to spy on our Parliament. Did the Prime Minister raise China’s espionage in Parliament with President Xi, and did he receive any assurances on that subject?
In the light of the Government’s statement that they are inviting police to review Lord Mandelson’s alleged sharing of government information with foreign agents and foreign actors, can the Lord Privy Seal confirm that any inquiry will review all possible leaks, not just in the United States but to China and other nations?
I have a specific question that I accept the Lord Privy Seal may not be able to answer specifically now —but I ask her to write to me. Did the Prime Minister meet Jingye, the owner of British Steel? Will she say what was discussed about the future of British Steel? If not, why not, given that the Government are injecting working capital at an annualised rate of roughly £500 million? When can we expect the steel strategy, promised in 2025, by the way?
While the Prime Minister was on his visit, more concerns about the Government’s Chagos deal were being raised here at home and in Washington. Beijing’s ambassador to Mauritius has previously welcomed the treaty as a “massive achievement” and said that China “fully supports” the agreement. Did President Xi or any Chinese officials express their support for the Prime Minister’s Chagos treaty to him during his visit? Can the noble Baroness confirm that 6,000 Mauritian officials, some of whom would take control of Chagos under this deal, have been trained by China? Was there any discussion of that? In addition to such growing Chinese influence in Mauritius, there is the threat of Chinese spy boats breaching the marine protected area around the Diego Garcia base. All these are serious matters on which Chinese-British relations are engaged. Can she shed any light on discussions on Chagos in China?
On a more positive note, we wholeheartedly welcome the Prime Minister’s visit to Japan. As I say, such visits are part of a Prime Minister’s job. We share the Government’s wish to see deeper ties and growing collaboration with our Japanese partners, with whom we have such a strong and mutually beneficial relationship as trading partners through CPTPP and in defence through the Global Combat Air Programme. Can the noble Baroness the Lord Privy Seal assure us the UK remains fully committed to the GCAP? The Prime Minister is right to strengthen our relationship with Japan and, in developing that critical alliance, he will always have our support.
Lord Purvis of Tweed (LD)
My Lords, these Benches believe the Government should engage internationally, and the Prime Minister likewise, to operate with allies and competitors alike. But when it comes to competitors who have been proven to also be adversaries and security risks, that engagement, if transactional, must actively de-risk.
On the Chinese risk to our economy and Parliament, and of industrial espionage, the relationship did not start when this Government took office. Indeed, part of the task should now be to try to remove some of China’s enhanced ability to operate that was in place under the previous Government. If the Government are playing a hand of cards badly now, the entire pack had been given previously to Beijing. We had the biggest trade deficit with China of any country in the history of our trade, peaking under Liz Truss at a trade deficit of over £50 billion. That meant our trading relationship was so out of balance that our ability to lever in any transactions was greatly reduced. I understand if the Government are seeking to reset the relationship, perhaps without going back to the “golden era” that George Osborne heralded in 2015, but a realistic one should ensure that we de-risk our relationship with China. Part of that would be ensuring that those who live in this country are not threatened by another country and do not have bounties placed on them. Did the Prime Minister state to President Xi that putting a bounty on anyone in this country is both utterly unacceptable and should be criminalised? Did we get an assurance that they will be lifted and never put in place again? Diplomacy is good; however, actions on this are necessary.
As we heard, we have been warned by MI5 of commercial espionage by China on an industrial scale. One of the key areas is our education sector, so can the Leader of the House be clear that we are confident of our intellectual property rights in any new relationship with China going forward? I read with a degree of concern that we are starting the process of a service trade agreement feasibility study. I asked the Minister for Development about this, highlighting that the Labour Party and the Liberal Democrats were as one before the last general election in seeking human rights clauses in trading agreements. Can the Leader of the House confirm that, if we are to have any service trade agreement with China, there will be human rights clauses within it and clear intellectual property protections?
On the embassy, there have been reports that the Prime Minister’s visit was not confirmed unless and until the embassy was approved. Ministers have said that only material planning issues were considered. Can the Leader of the House be clear and deny that there was any diplomatic communication with Beijing about the embassy?
If there is one element we have seen recently in Beijing’s purge of the military, it is the more belligerent tone on the regional areas of concern. It was a great pleasure this afternoon to meet with one of our Taiwanese sister party’s MPs to discuss the enhanced concern in Taiwan about that belligerent tone. The Prime Minister said in the House of Commons that he had raised the issue of Taiwan. Can the Leader of the House outline a little more what we raised? This is an opportunity to enhance our trading relationship not only with Beijing but with Taiwan, as being a friend of Taiwan does not mean being an enemy of China. When it comes to the key sectors of semi-conductors, technology and educational research, Taiwan is a trusted partner with strong institutions, the rule of law and human rights—and it is a democracy. Therefore, our relationship should be enhanced, but not at the cost of the relationship with China. Did President Xi seek to put pressure on the UK to diminish our relationship with Taiwan? That would be a very retrograde step.
On Japan, the situation is very positive. Our relationship is strong and can be enhanced, and I welcome the Government’s moves to do so. The Leader of the Opposition mentioned the Global Combat Air Programme; more information on timing and costs would be most helpful. Will the defence investment plan reflect the Tempest programme and the practical arrangements?
Finally, on whisky, for which both the noble Lord and I have a fondness, I agree that the situation is positive. Any deal that enhances the Scotch whisky industry is a good one. I remind noble Lords that, while it is beneficial that Beijing tariffs will be reduced, our most profitable and valuable malt whisky market in the world is Taiwan, and that should be a lesson for us.
The Lord Privy Seal (Baroness Smith of Basildon) (Lab)
I am grateful to both noble Lords for their comments. Those from the noble Lord, Lord True, clearly underline the fundamental difference between the party opposite and us. Let us just start from where we are. The fundamental difference is that the party opposite went from a golden age of engagement to an ice age of engagement. Noble Lords referred to resetting the relationship with China. I do not think it is a reset; it is establishing a relationship that has been absent for the last eight years. I have to say to the noble Lord opposite that if the only countries he wants the Prime Minister to engage with are those with which we are in 100% agreement on every issue, it does this country a great disservice. Only through engagement with countries with which we have differences will we make progress, for the benefit of this country, on the kinds of issues the noble Lords have spoken about.
It is a choice we make. For eight years, the party opposite made the choice not to engage or have prime ministerial visits. We have made a different choice, in the national interest. That does not in any sense mean that we are not going to raise, and did not raise, important issues of concern regarding security, human rights and individuals. The only way you resolve those issues is by dialogue. You are not going to make all the progress needed or resolve all the issues the first time you establish dialogue, but if you do not make that start, nothing is going to happen. I do not much see evidence of the last eight years of disengagement working for the benefit of this country. If we look at other countries, this country has stood back in the last eight years. President Macron visited China three times, and the German leader visited four times, and the USA and Canada have plans in place. Engagement is possible and provides a new opportunity to develop a new, different kind of relationship, as the noble Lord alluded to.
Both noble Lords raised the issue of the embassy. I do not think I need to remind this House that decisions on planning issues are quasi-judicial and taken in that context. It is not a matter for the Prime Minister; it is a matter for the Secretary of State.
The decision must be taken on planning grounds, but issues of national security can be taken into account. It might assist the House if I read a short comment from a longer letter from GCHQ and the security services. I remind noble Lords that there have been Chinese embassies in this country since, I believe, 1788. Those embassies are currently across seven different sites across the UK. In terms of the benefits we get, the letter I have to the Secretaries of State from the security services and from GCHQ says that the consolidation should bring “clear security advantages”. That is important to note.
Also, when the Intelligence and Security Committee of Parliament looked at that, where issues of process were raised, it concluded that
“the national security concerns that arise can be satisfactorily mitigated”.
That shows how seriously the Government take this issue. That does not mean we are not alive to other security issues, but the advice from GCHQ and MI5, and from the Intelligence and Security Committee, is something we should take note of.
The noble Lord, Lord True, raised the issue of sanctions and the righting of a terrible wrong. Yes, he is right and it is important that China has done so. It is absolutely appalling that any sanctions should remain on parliamentarians at all. There are still further discussions on how much further we can take that but, in terms of making progress, it is an important first step to have made.
The noble Lords asked about a range of issues. As I was not in the room, I cannot give a complete readout of who said what and what the response was. What I think is the most important thing, however, is how these issues were raised. The issue of the Uyghurs and the issue in Hong Kong and of Hong Kong residents in this country are issues we cannot accept in any way at all. It is a terrible situation. It is something the Prime Minister felt very strongly about and, along with the imprisonment of Jimmy Lai, it was on the Prime Minister’s agenda and was raised and discussed.
On Jimmy Lai, it is worth saying that what his family must be going through and what he must be going through is completely and totally unacceptable. He is a British citizen, he is in poor health and he should be at home with his family. We will continue to raise this. It is sad that lack of engagement, saying, “We do not agree with you”, has not made any progress. The only way we can make progress is by having that engagement. But there can be no doubt at all about the strength of feeling from the Prime Minister and others on this issue.
I am running out of time, so I will quickly try to address the many other questions in a couple of minutes. Yes, we remain fully committed to GCAP; yes, the issues of British Steel are at the forefront of the Prime Minister’s mind; and yes, of course, it is important for the whisky industry. Perhaps I can just make a plea for Northern Ireland whiskey as well; I am not a whiskey drinker, but I understand that Bushmills would be my favourite if I were. My Northern Ireland colleagues may not be here, but I see there is a Bushmills drinker here.
Taking this forward, security is very important. We have been unequivocal in our support for Taiwan. On Ukraine, the Prime Minister spoke to President Zelensky before he went to China—before he raised Ukraine with President Xi. He spoke to President Zelensky afterwards as well. We are being very clear about our support for Ukraine. We do not in any way condone, support or even accept China’s support for Russia on this. It is quite clear the Prime Minister made that point.
The Deputy Speaker (Baroness Pitkeathley) (Lab)
My Lords, the noble Lord, Lord Campbell-Savours, is taking part remotely. I invite the noble Lord to speak.
Lord Campbell-Savours (Lab) [V]
My Lords, I welcome the Prime Minister’s recent initiative. Is not the constant criticism by some of China, in the mistaken belief that isolation and shouting abuse are somehow going to positively influence events, both reckless and counter- productive? It will be ignored by China, of course. Is not the way forward to dilute conflict by promoting harmony and co-operation in every area of human endeavour: sport, finance, culture, educational exchange and human rights? And, most important, should we not be getting in close to deal with problems arising from dollar devaluation and the inevitable emphasis China will now place on exports to Europe?
Baroness Smith of Basildon (Lab)
The noble Lord raises a number of issues, but the bottom line is that he asks whether engagement is better than stepping away and shouting. That is the fundamental difference between us and the party opposite. The kinds of issues he raises about investment, business and trade are important, but it is also important that we challenge. So, co-operation and engagement are key, as are cultural exchanges, which were quite a big part of the delegation. Sixty businesses and organisations travelled with the Prime Minister, many of them representing cultural organisations. That is really important and helps the understanding between peoples, not just between Governments. But we also have to challenge where we have differences, and that will continue alongside engagement.
The Earl of Minto (Con)
My Lords, given the profound uncertainty surrounding the UK’s treaty with Mauritius in respect of the Chagos Islands, can the noble Baroness the Lord Privy Seal confirm that further consideration of this Bill will not resume until the necessary amendments to the 1966 treaty—UN treaty 8737—between the UK and the United States have been made?
Baroness Smith of Basildon (Lab)
I must say to the noble Lord that I am responsible for many things, but the timing of our debates is a matter not for me but for the Chief Whip, who might not appreciate me saying what the timing could be. I will say to the noble Earl that we are in discussion with the Americans, as we have been throughout on this, but I have never, in all my time in this House, known a party table a Motion at ping-pong to delay ping-pong. That I think is unprecedented. On the substance of his point, yes, we are engaged with the Americans and we look forward to bringing the Motion forward in due course.
Lord McConnell of Glenscorrodale (Lab)
My Lords, as chair of the UK-Japan 21st Century Group, I warmly welcome the Prime Minister’s visit to Japan, following his visit to China and emphasise how important it is that we visit, link up with, negotiate with and do deals with our best friends, as well as those who are more challenging. In particular, can I ask whether the Prime Minister, during his visit to Japan, discussed with the Prime Minister of Japan the refreshing of the Hiroshima Accord that was established by Prime Minister Sunak and which has forged a new partnership between this country and Japan that is leading to significant investment, very good co-operation on science and technology and strengthening defence globally?
Baroness Smith of Basildon (Lab)
I thank the noble Lord for his interest and his role in this. Japan has been a valued partner and it has been a very deep relationship, for instance with £33 billion in annual trade and 150,000 jobs created. Japan is our closest security partner in Asia. On the noble Lord’s particular point about the Hiroshima Accord, I will look into that and come back to him. On a number of issues where we are in agreement, I would highlight the support Japan has given to Ukraine. Japan has been the fifth-largest provider of non-military assistance and it has been a key member of the coalition of the willing. I think that shows the strength. I would also say that most of us regard the Japanese ambassador, Ambassador Suzuki, with a great deal of affection. He has really taken the UK to his heart and the UK has taken him to our hearts.
Lord Alton of Liverpool (CB)
My Lords, following the issue of sanctions, in my case it is one down and three to go. I welcome the intervention that the Prime Minister made on behalf of those parliamentarians who have been sanctioned—not by China but by the Chinese Communist Party. Many of us are careful to make that distinction. Jo Smith Finley, the Uyghur scholar based at Newcastle University, is still sanctioned; Sir Geoffrey Nice, KC, one of our most celebrated human rights lawyers, who chaired the Uyghur Tribunal, is still sanctioned. Tim Loughton, former Member of the House of Commons, is still sanctioned. We have had nothing in writing about the sanctions on our own families, as well. I do hope that we can expedite that as soon as possible.
I want to drill down deeper on the points raised by the noble Lords, Lord True and Lord Purvis, on dependence and resilience. With a trade deficit of more than £40 billion, should we not do all we possibly can to remove our dependency on the People’s Republic of China? That is not to say that we should disengage, but making ourselves dependent in crucial sectors surely cannot be right. Following what I heard yesterday at a round table I chaired here in Parliament for the All-Party Parliamentary Group on Uyghurs, what have we done to ensure that goods that have been made by slave labour in Xinjiang are removed from our supply chains, not least solar panels and many of the things we buy into the National Health Service?
I will also ask about transnational repression; the noble Lord, Lord Purvis, raised this point. Many of us have met Chloe Cheung, a brave young woman, just in her 20s, who has a bounty of 1 million Hong Kong dollars on her head. Carmen Lau, who was a Hong Kong district councillor, has a similar bounty on her head, and a further 10 residents in the UK have those kinds of bounties. That cannot be right. Did we raise that question with President Xi? What progress can we make on that?
On 26 February, this House will debate the report from the Joint Committee on Human Rights on transnational repression. Will we be able to answer the question about the foreign influence registration scheme and our failure to put the People’s Republic of China into it, even though we have put Russia and Iran into it?
Baroness Smith of Basildon (Lab)
I am grateful to the noble Lord. He is absolutely right: in every circumstance, sanctions are wrong. I am myself sanctioned —not by the Chinese Communist Party but by Russia—as are a number of Members of this House.
The noble Lord raised Hong Kong as well. The Prime Minister was candid and robust in raising these issues. We will get clarity for the noble Lord—discussions are ongoing—but the principle has been established, and we want to take that on as we can.
The noble Lord asked about supply chains, and about dependence and resilience. We do not rely on one country. The trade deals that this country has done are significant; look at the work we are doing with the EU, and our trade deals with India and the USA. All those play a part, and the noble Lord is right to raise that issue. I hope that we can get back to him fairly soon with further clarity, but he is absolutely right. All those issues were raised, and we are not prepared to accept sanctions on British citizens.
Baroness Ludford (LD)
My Lords, can the noble Baroness the Leader of the House assure us that the candid robustness of the Prime Minister on Hong Kong included giving the very firm message to Beijing that no return visit by President Xi could be considered while Jimmy Lai is still imprisoned in Hong Kong and—heaven forfend—if he were to die in prison?
Baroness Smith of Basildon (Lab)
My Lords, the Government will do everything in their power to ensure that Jimmy Lai does not die in prison. No one wants to see that, and I am surprised that the noble Baroness raised it in those terms. We want to secure Jimmy Lai’s release. She asked about a visit. The only visit that I am aware of where the Chinese President could come to the UK is the G20 visit. We do not say, “Unless you do this”; it is not conditional. We are trying everything we can to ensure Jimmy Lai’s release.
Lord Browne of Ladyton (Lab)
My Lords, I thank my noble friend for addressing this important Statement. I draw you Lordships’ House’s attention to my entries in the register of interests, particularly my role as vice-chair of the Nuclear Threat Initiative. Ministers routinely refuse to answer questions in Parliament about nuclear weapons, often citing the phrase “for obvious reasons”. On Monday in the Commons, my honourable friend John Grady MP asked whether the Prime Minister had had discussions with President Xi about nuclear weapons. In response, the Prime Minister informed the other place that he had discussed with President Xi how to
“derisk the risk in relation to nuclear weapons”.—[Official Report, Commons, 2/2/26; col. 36.]
In 2022, the United Kingdom, under a Conservative Government, together with the other P5 members, affirmed its intention
“to maintain and further strengthen our national measures to prevent unauthorised or unintended use of nuclear weapons”.
The same Government reaffirmed that in 2024 with no qualifications. Can my noble friend build on this hugely welcome precedent of transparency and persuade the Government to make time for a debate on this issue in Parliament? Given my impending retirement, this request is wholly altruistic, as I will not be able to participate, but I believe that it would be a welcome step forward for parliamentary accountability.
Baroness Smith of Basildon (Lab)
My noble friend— I use that word in every sense, since he and I were Ministers together in Northern Ireland—asked me for a debate. When he announced his retirement from this House, I think he heard the response from many noble Lords, which illustrated how much he will be missed here; I will certainly miss him on a personal level too. The Prime Minister also paid tribute to my noble friend when he answered that question in the House of Commons, which does not happen for many of us.
The Prime Minister did indeed answer that question, but I think I can go a bit further on the substance of the point. It is quite clear that the Government will increase their efforts to work with China on halting nuclear proliferation, maintaining strategic stability, and advancing progress on conflict prevention, resolution and peacekeeping, in line with the UN charter and the responsibilities for permanent members. Given my noble friend’s work with the Nuclear Threat Initiative, this House would be poorer in having a debate without him present. I will not try to take on the Chief Whip’s role in suggesting a debate; it is something that the House debates from time to time, but I will pass on my noble friend’s comments. I end by saying that he will be greatly missed by this House.
Baroness Hoey (Non-Afl)
My Lords, one British citizen is being held by the Chinese in solitary confinement, as other noble Lords have mentioned. There is something I genuinely cannot understand: as the visit was being arranged, and as we were giving permission for a huge Chinese embassy, why was this one British citizen not made an absolutely key issue before the Prime Minister was even prepared to go to China?
Baroness Smith of Basildon (Lab)
My Lords, it is a key issue. It is important that the Prime Minister, for the first time since Jimmy Lai has been in prison, was able to raise this issue face to face with the Chinese—that has not happened before. I do not think that any of us will be satisfied until Jimmy Lai is released; that is the only point at which we will be satisfied with all the engagement that is taking place. I give the noble Baroness a categorical assurance that this issue is being raised at every opportunity and that we will continue to raise it until he is released.
Viscount Stansgate (Lab)
My Lords, I welcome the Statement and the Prime Minister’s visit to Japan and China. As the Leader of the Opposition said, such visits are a vital part of the work of every Prime Minister. The Statement on China refers to a dedicated dialogue on cyber security. Can my noble friend tell the House any more about what that might involve?
Baroness Smith of Basildon (Lab)
I cannot give details, but discussions are taking place. I think we all understand the threats of cyber security, and why we have to minimise them and not accept them from any part of the world against anyone in the UK or any UK institution. Those discussions are ongoing, and it is important that we have them. The present situation is not what we wish to see. That is why it was so important that, when the embassy got planning permission, we included the security implications in the decision-making process. My noble friend is more of an expert on cyber issues than I am, but I assure him that discussions are ongoing and will continue.
Lord Garnier (Con)
My Lords, the whole House respects both the Leader of the House and her noble friend the Foreign Office Minister, who is sitting alongside her. As I said the other day to the noble Baroness, Lady Chapman, the problem that we face in this House —those of us who are not Foreign Office Ministers—is that when Ministers in this House use expressions such as “challenge” or “robustly raise”, it sadly does not mean very much. They are delightful generalisations, and they breed a form of suspicion that all that is happening is that a formula is being adhered to.
Is the Leader of the House able to be a little more forthcoming? The noble Baroness the Minister of State at the Foreign Office was not in the room when the Chinese ambassador was summoned to the Foreign Office, so she was unable to tell me what exchanges took place, albeit she may later have had some form of readout. We need a little more detail. Nobody is suggesting that the Government are not being candid with us but perhaps they can be a little more open in the secrecy of this Chamber and let us know precisely what “challenge” and “raising robustly” mean. As the noble Lord, Lord Alton, and my noble friend Lord True said, there are grounds for concern that “robust” and “challenge” have a different meaning in the Government from on the street?
Baroness Smith of Basildon (Lab)
Given that we have had an aircraft carrier in the area, I think that is fairly robust. I will get the precise details for the noble and learned Lord. He has been a Minister himself, and he is being a little cheeky. On the secrecy of the House of Lords, there are thousands watching our proceedings. Hansard is published.
Baroness Smith of Basildon (Lab)
The noble and learned Lord says millions. He may be more optimistic than I am, but we are hardly meeting in secret. The art of diplomacy is an ongoing process, not a moment. The House understands that. The noble and learned Lord has to accept that when the Prime Minister raises issues that have not been raised for a long time, he will do so to ensure that his voice and that of this country are heard. I do not recognise the noble and learned Lord’s characterisation. Most of us can understand the diplomatic language, perhaps, of “raising” and being “robust” on issues. No one can say that we have not been robust on Ukraine, the Uyghurs and Taiwan. The Prime Minister has not changed his view in any way. He has been quite clear on that. I am unable to give the noble and learned Lord the minutes of the meeting but I can give him the assurance that the Prime Minister raises issues in the way in which the House would expect him to.
Lord Craig of Radley (CB)
There has been a report of a warm relationship between Mauritius and China. Was there any discussion with the Chinese about the Chagos treaty during the Prime Minister’s visit?
Baroness Smith of Basildon (Lab)
I am not aware of any discussion specifically on the treaty. On the issue of wider security in the region, certainly in China and Japan, that was an important part of the Prime Minister’s visit because the security of that region is important to us. But I could not say absolutely that Chagos was part of the discussions.
Lord Mohammed of Tinsley (LD)
My Lords, can I press the Leader of House on an issue that my noble friend Lord Purvis raised around human rights in particular, regarding any future potential trade arrangements and ensuring that human rights chapters are included in them? I am concerned that if we do not do so, we will be on a slippery slope every time we negotiate with any nation.
Baroness Smith of Basildon (Lab)
Yes, it is an important part of trade deals that we have the highest standards possible, and human rights are often part of discussions that take place. If one looks at the trade deals that have been done already, one can see that those discussions have taken place and, in many cases, borne fruit.
Lord Sharpe of Epsom (Con)
The noble Baroness said earlier that steel was at the forefront of the Prime Minister’s mind. We understand that the steel strategy, which is long awaited, is with No. 10 and the Prime Minister at the moment. Can she enlighten us a little more as to when we can expect to see that published? If she cannot do so, will she at least ask the question and come back to us?
Baroness Smith of Basildon (Lab)
The noble Lord will understand the commitment this Government have to the steel industry in this country. I remember just under a year ago being away on holiday, receiving numerous phone calls and coming back straight to this House on a Saturday to save the steel industry in this country. He may need to be a little bit more patient with the steel strategy but he I think will welcome it in the interests of British Steel when it arrives.
Medical Training (Prioritisation) Bill
Wednesday 4th February 2026
(1 day, 10 hours ago)
Lords ChamberNational Insurance Contributions (Employer Pensions Contributions) Bill 2024-26 View all National Insurance Contributions (Employer Pensions Contributions) Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 21 January 2026 - (21 Jan 2026)
Baroness Merron
That the Bill be now read a second time.
Northern Ireland, Scottish and Welsh legislative consent sought.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Baroness Merron) (Lab)
My Lords, it is essential that the changes we hope to make in this Bill resolve some of the existing workforce issues within our NHS. I say at the outset that the Bill will not be a silver bullet, and I do not wish to present it as such, but the changes it introduces for foundation and specialty training will lead to a more sustainable medical workforce that can better meet the health needs of our population.
I am most grateful to all those who have engaged with us, including the devolved Governments, to recognise the shared challenges that we face across the United Kingdom. My thanks are also due to noble Lords from across the House for their constructive contributions, time and interest in meeting me and officials. I am also most grateful for the cross-party support that has been demonstrated, both in the other place and in my discussions with the Front Benches in this House. A number of organisations have also expressed their support, including: the BMA, the Academy of Medical Royal Colleges, the Royal College of Physicians, and the Royal College of Surgeons of Edinburgh.
The NHS is beginning to show signs of recovery, following a period of unprecedented strain. Nothing in the NHS functions without its workforce and I am grateful for the dedication and professionalism of our workforce. Supporting, valuing and planning for that workforce is fundamental and, I know, something that your Lordships’ House takes a great interest in—and rightly so. Because the NHS depends on its workforce, we are developing a long-term approach to workforce planning, aligned with the ambitions set out in the 10-year health plan published in July, which set out the intent of this Bill.
That work will culminate in the publication of a 10-year workforce plan in the spring, setting out how we intend to ensure that the NHS has the right people in the right places with the right skills. Staff have been clear for some time that they want change, not only in absolute numbers but in how they are trained, supported and treated at work. We have heard from many who have been exceptionally frustrated by the current application process. There are challenges within medical training that cannot be addressed without legislative change, and that is why we are taking action with this Bill. I am absolutely delighted that my noble friends Lord Duvall and Lord Roe have chosen to make their maiden speeches in this important debate. I, like all noble Lords, very much look forward to hearing from them.
One of the most pressing of those challenges is the severe bottleneck in postgraduate medical training. For several years now, the number of applicants for foundation and specialty training places has grown far more rapidly than the number of available posts. In 2019, there were around 12,000 applicants for 9,000 specialty training places. In 2020, visa restrictions were lifted, and we find this year that this has soared to nearly 40,000 applicants for 10,000 places, with significantly more overseas-trained applicants than UK-trained ones.
This has created intense competition, uncertainty and frustration for many at the start of their careers. At the same time our NHS has become increasingly reliant on international recruitment. This Government deeply value the contribution made by doctors from all around the world, many of whom have played and continue to play a vital role in patient care, and nothing in in this Bill diminishes that contribution. However, it is neither sustainable nor ethically comfortable for the UK to depend so heavily on recruiting doctors from countries that themselves face serious workforce challenges while a growing number of UK-trained doctors struggle to access training posts. Competition for medical staff has never been fiercer. The World Health Organization estimates a shortfall of 11 million health workers by 2030. Shoring up our own workforce will limit our exposure to such global pressures without depriving other countries of their homegrown talent, and this Bill seeks to address that imbalance.
Let me turn to the Bill itself. The Medical Training (Prioritisation) Bill gives effect to the Government’s commitment to place UK-trained doctors and other defined priority groups at the front of the queue for medical training posts. It does so while continuing to allow internationally trained doctors to apply for and contribute to the NHS. Let me emphasise that the Bill is about prioritisation. It is not about excluding people, but it is unashamedly about prioritisation. For the UK foundation programme, the Bill requires that places are allocated to UK medical graduates and those in priority groups before being offered to other eligible applicants. For specialty training, it introduces prioritisation initially at the offer stage for 2026 and from 2027 at both the short-listing and offer stages. That will significantly reduce the level of competition being faced by UK-trained applicants, and it will provide greater certainty at a critical point in their career.
Internationally trained doctors with significant NHS experience will continue to be prioritised for specialty training, recognising the service that they have given. This year, immigration status will be used as a practical proxy for NHS experience in order to allow prioritisation to begin swiftly. For following years, we have taken powers in regulations to enable us to refine this approach in consultation with key partners. I have been asked by noble Lords what this means for those with refugee status. This status is not a stand-alone priority group, although refugees will be prioritised for specialty training in 2026 if they fall within another priority category, such as holding indefinite leave to remain or having completed the foundation programme. Refugees who do not fall within a prioritised group may still apply for specialty training posts and the Bill will not change their eligibility to apply for locally employed doctors’ roles.
I am seeking to address up front some of the concerns that will quite rightly be raised in the course of the debate. One of those is a concern I have heard about why British citizens who have graduated from medical schools outside the UK will not be in the priority group, including some doctors who would be eligible only for provisional GMC registration. I understand the reasons why this is being raised, and I have heard how some would prefer all British citizens, in a blanket sense, to be prioritised. The problem with that is that it would undermine the very intent of the legislation, which is to enable effective workforce planning and the development of our future medical workforce.
The principle is to create a sustainable domestic workforce. It is not about where a student is born; it is about where they are trained, and the fact is that UK-trained doctors are more likely to work in the NHS for longer. In addition, the Government set UK medical school places based on future health system needs. Student intakes and graduate outputs of overseas medical schools are not included in our domestic workforce planning. If we prioritised British citizens in a blanket sense for foundation training places regardless of where they studied, that would undermine our key aim to build UK-trained capacity while ensuring that we do not provide more foundation programme places than we need. I reiterate that this Bill is about prioritisation and not exclusion. All eligible applicants will still be able to apply and will be offered places if vacancies remain after prioritised applicants have received offers, which we expect to be the case on the basis of our long experience.
I have also listened to colleagues expressing concerns around the treatment of applicants graduating in Malta. The UK’s long-standing partnership with Malta on healthcare is valued and will continue. Doctors training in Malta will still be able to come to the UK to gain NHS experience to support their training, for example through fellowship schemes. These arrangements are not affected by the Bill. However, as I stated earlier, for recruitment to specialty training places in the UK, the Government assess that it is important to prioritise to ensure a sustainable workforce that meets health needs.
I turn to the matter of public health specialists, who are particularly identified in the Bill. Public health is a unique medical specialty that draws applicants from medicine and other professional backgrounds who all undergo the same rigorous training. All public health specialists, regardless of professional background, complete the same rigorous medical specialty training programme and are subject to the same high professional standards. The Bill excludes from prioritisation any specialty programmes wholly in the field of public health, as it would undermine the multidisciplinary public health specialist workforce. The Government will monitor the impact on the public health specialist training programme, which currently accepts very small numbers of international medical graduates.
I am aware that there are concerns relating to terms and conditions and mobility for some specialists. We have set out the actions we will take to make the NHS a better and great employer. However, a focus on the NHS alone will not support the whole health workforce, as many public health specialists work outside the NHS with differing employment arrangements. But we are committed to working with the BMA, employers and professional bodies to make public health careers more attractive.
On timing, the Bill includes provisions to allow prioritisation to apply to the current application cycle, with posts commencing this August. That requires Royal Assent by 5 March. It is therefore important to seek timely passage for this Bill to avoid disruption for trainees who need sufficient time to find somewhere to live, sort out childcare and arrange any other aspects of their lives before their posts start, and for NHS trusts that are planning the front-line services. I hear the concerns of some noble Lords about the impact on those applying in the current application cycle, particularly where applicants report that they did not know how prioritisation might affect them. As I said earlier, these concerns are understandable, and they have been carefully considered. However, delaying action would only prolong the current problem by further entrenching the existing imbalance in training competition and it would weaken our ability to plan a sustainable workforce.
The commencement provisions provide necessary flexibility, ensuring that implementation can be carried out in an orderly and workable way, taking account of operational realities. On that point, there is a material consideration, which I am sure will be raised and understandably so, about whether it is possible to proceed if strike action is ongoing. The disruption strikes cause, and the pressure they put on resources, would undoubtedly make it a lot harder operationally to deliver the important measures in this Bill. It is our intention to commence as soon as we can, subject to the Bill’s passage through Parliament, but it is vital to have a safeguard to ensure that the systems planning and operational capacity required for successful implementation are firmly in place.
I conclude by saying that the Bill will not solve every workforce challenge, but it is a very important step towards a more coherent, ethical and sustainable approach to medical training and workforce planning: something that has been called for for many years.
It is estimated that four resident doctors will be competing for every specialty training post in 2026. With the delivery of this Bill, this number can reduce to two resident doctors per place. British taxpayers spend £4 billion training medics every single year. It will be by better aligning public investment, training capacity and long-term service needs that the Bill will give UK-trained doctors a fair chance to serve in the health service they train to support, and to do so in a way that benefits us, the public, across the country. I beg to move.
Earl Howe (Con)
My Lords, I begin by declaring my interest as an honorary fellow of the Royal College of Physicians. It is a pleasure to open the first of our discussions on the Bill, and I should like to express my thanks to the Minister for her clear explanation of its provisions and its policy background.
I also thank her for the informative letter that she circulated earlier this week, and for the helpful private discussions she has facilitated. Like the noble Baroness, I look forward to the two maiden speeches we are to hear later from the noble Lords, Lord Roe and Lord Duvall, whom I welcome very warmly to the House.
This Bill may be small in length, but it is far from insignificant, not least because it is being introduced to Parliament on an emergency timetable. More pertinently perhaps, its significance can be measured in its potential effect on the lives and careers of many thousands of doctors. That fact alone makes this a measure deserving of the closest scrutiny, and I am therefore appreciative of the fact that the Government and the usual channels have enabled a greater interval between each stage of the Bill’s passage through the House than was the case last week in the other place.
I should say to the noble Baroness at the outset that His Majesty’s Opposition have no quarrel with the principle underpinning the Bill. However, as she would expect, we have identified and been made aware of very considerable concerns over a number of its key provisions, and I know she will understand that we need to explore these thoroughly during the course of our proceedings.
Doctors trained in this country and funded by the taxpayer should have a fair, clear and consistent pathway to progression within our NHS. Britain trains some of the finest doctors in the world, yet too many are being lost because they cannot access the training places they require. That represents a waste of talent, it undermines morale and it ultimately has consequences for patient care. It also represents a loss of taxpayer investment made through the public support of medical education and training when doctors are forced to take their skills abroad because they cannot progress within the system at home. It is, therefore, a problem that we on these Benches agree must be addressed.
However, the manner in which these challenges are addressed matters greatly. There has to be a test of reasonableness and fairness if the Government’s response can be judged acceptable not only in the eyes of UK-based doctors but to doctors who have studied overseas. The solution to the problem must also offer sustainable, long-term change and not just a short-term sticking plaster. I say that because, as we all know, the danger inherent in emergency legislation of any kind is that it can result in unintended and unwanted effects.
To my eyes, one of the first ways in which the Bill falls short, along with the Government’s narrative, is its failure to address the wider question of how its provisions dovetail with any changes in the availability of training places. To solve the problem of recruitment bottlenecks, the Government are using the Bill to refashion the order in which eligible applicants are considered. However, the other way of approaching the issue is to expand the number of training places. Elsewhere, the Government have promised to deliver 4,000 new specialist training places, including 1,000 places that are needed in reasonably short order.
Where do these plans now sit and how are they likely to affect the career prospects of the doctors of the future and those already in the system, particularly those doctors trained overseas? How quickly can capacity be expanded? These were questions that the previous Government tried to address head-on in the NHS Long Term Workforce Plan, published in 2023, which was well received across the medical community.
I mentioned just now the risks and dangers inherent in introducing emergency legislation on a curtailed timetable and, in that vein, another area of concern is the seeming contradiction in the Government’s characterisation of this legislation as an emergency measure. As we understand it, the Government are proposing that the Bill should come into force not on Royal Assent but at a time of the Secretary of State’s choosing. Why is that? If the Bill before us were genuinely urgent, addressing, as it purports to, the 2026 recruitment round, it is difficult to understand why it would not be commenced immediately following its approval by Parliament and the sovereign.
The disconnect between the Government’s rhetoric and reality is troubling, not least because it serves to highlight a number of provisions in the Bill that pose real worries. One such worry concerns the Bill’s impact on doctors who are trained overseas through established UK higher education institutions. These are doctors who are undertaking identical GMC-approved MBBS courses, sitting the same assessments and receiving the same GMC-approved degrees as their counterparts trained in the United Kingdom.
Under the Bill, these doctors will find themselves suddenly classified in the non-priority category of applicants, both for foundation programmes and for specialty training. We are aware that at least one of these programmes operates under a long-standing international arrangement, with wider diplomatic and institutional implications. The noble Baroness, Lady Gerada, will be addressing the issue in greater detail. At this stage, however, I wish to highlight one programme run by Queen Mary University of London in Malta, which is sustained by a long-standing UK-Malta agreement, first established in 2009 and reviewed as recently as 2024. That agreement sits within a broader context of deep and enduring ties between the two countries’ health systems and approaches to medical education.
Undermining it risks significant and long-lasting repercussions for the UK-Malta relationship. I understand that the Government of Malta have written to the Secretary of State to raise these concerns—so far, I understand, without a response. The Minister very helpfully referred to the Maltese concern in her recent round robin letter, as she did today. But I believe it is an issue we shall want to pursue in Committee in greater depth. The concern is multifaceted because, in the scheme of things, what the Bill does to Maltese doctors looks completely unnecessary. The numbers involved are tiny. The Maltese example demonstrates that the Bill as drafted risks causing disproportionate harm to well-established international partnerships, seemingly not as a matter of policy intent but as a consequence of legislation being rushed through Parliament.
There is a further issue that has been brought repeatedly to our attention by doctors and medical academics in this country and abroad: the position of applicants who are already part way through the current foundation programme recruitment round. The noble Baroness mentioned this in her speech. We have heard compelling evidence of a real risk of creating what has been described as a “stranded cohort”: that is, the cohort of doctors who entered a live national recruitment process in good faith, under published rules and fixed deadlines, only to face the risk of materially different outcomes because prioritisation is applied mid-cycle in a radically different way from before.
We need to be clear on the point that applicants at this stage have already committed significant time and cost to the process and are making concrete plans around registration, visas, relocation and employment. For foundation programme applicants in particular, there is often no straightforward alternative NHS route if an outcome is delayed or left indeterminate, given the constraints around provisional registration.
From a system perspective, uncertainty of this kind also risks avoidable disruption to workforce planning, late withdrawals and rota instability. None of these comments are intended to challenge the core principles of the Bill, but they surely call into question the justification for the process and whether it is fair and reasonable for Parliament to permit what amounts to retrospective disruption to an already defined recruitment cohort. Are the Government willing to make use of the commencement and transitional powers in the Bill to ensure that the changes introduced operate only prospectively, so as to give clarity and fairness for those already in the pipeline?
Beyond the issues I have already referred to, there are a number of further concerns about the way the Bill is framed and how it will operate in practice. As drafted, the prioritisation process that the Bill envisages rests chiefly on one decisive qualifying factor—where a doctor was trained. While that may work as an idea in general terms, we are concerned that it risks excluding from the priority group individuals who are British citizens but who have undertaken part of their training overseas, which can arise for entirely normal and legitimate reasons. Again, I listened to what the noble Baroness had to say on this subject, but one clear example is doctors who have completed elements of their medical training while serving with the UK’s Armed Forces abroad. Those individuals have trained within UK systems, often in demanding circumstances and in the service of this country. It would be perverse if their contribution were overlooked simply because aspects of their training took place outside the British Isles. Any credible definition of a UK medical graduate ought to be capable of recognising that reality.
We must also consider the wider implications of this legislation for medical schools. Changes to prioritisation will inevitably influence the number of international students choosing to study medicine in the UK, with potential adverse financial consequences for institutions that are already under significant pressure. Parliament should not be asked to legislate in the dark on such effects, which is why we believe that there is a strong case for the Government reporting regularly on the impact of these provisions on student numbers and on the financial sustainability of medical schools—centres of excellence that sustain a world-class teaching environment that is a genuine credit to this country.
The Bill was prompted by a problem that we all recognise—too many talented British doctors are finding their progression blocked, and the NHS and, ultimately, patients are paying the price. We support the principle that UK training, public investment and commitment to the NHS should be properly recognised, but principle alone is never enough. If this legislation is to succeed, and succeed fairly, it must be both precise and proportionate. Of course, it must address the core of the problem in a sufficiently far-reaching way. However, it must also recognise the realities of life for aspiring doctors who have submitted applications to enter UK training programmes, relied in good faith on explicit written assurances from the relevant authorities and committed what are often large sums of their own money on the back of those assurances, and who now find the rug pulled from under them.
Legislation designed to remedy the current problem must also take full account of those elements of UK and foreign-based training systems that are in practical terms identical. It must be robust enough to protect UK training pathways stemming from long-standing international partnerships that are already established firmly in our medical education system. Our relations with allies and Commonwealth members such as Malta really matter.
We approach the next stages of the Bill in a constructive spirit. Our aim is not to frustrate its passage but to improve its drafting to ensure that it does what it is intended to do without unintended consequences. We want it to command confidence across the House as well as outside it so that the future of medical training, and indeed the future of the NHS, is genuinely safeguarded and strengthened.
Lord Clement-Jones (LD)
My Lords, I too thank the Minister for her introduction. I look forward to hearing from our two maiden speakers and add to the noble Earl’s welcome to the House to them. It is a pleasure to follow the noble Earl, and I agree with a great deal of what he said.
Let me say from the outset that we on these Benches support the underlying principles of the Bill. The Government’s impact statement makes the case that UK graduates are significantly more likely to remain in the NHS long term than their international counterparts. It is entirely reasonable that where the British taxpayer invests some £4 billion annually in medical education, there should be a secure pipeline for those graduates into our health service.
However, while the intent is sound, the execution is marred by serious flaws. Fairness requires that those who have relied on a long-standing government position are not disadvantaged by abrupt alterations. Six months’ notice is wholly inadequate for a decision with such a long lead-in time, and few could reasonably have expected such a significant change to be implemented with so little warning.
I want to highlight two specific areas where the Bill creates profound inequity—the treatment of UK university campuses overseas, specifically Queen Mary University of London in Malta, and the flawed criteria used to assess significant NHS experience for our international colleagues.
First, on the anomaly regarding Queen Mary University of London and its campus in Malta, until mid-last year, I was chair of Queen Mary University of London’s governing council. It is vital to understand that Queen Mary University in Malta is not a foreign institution or a private commercial venture; it is an integrated campus of a UK public university. Its students study a curriculum identical to that of their peers in London. They sit the same assessments, including the UK medical licensing assessment, and they are awarded the exact same GMC-approved primary medical qualification.
In her letter to noble Lords this week, and I welcome her correspondence, the Minister argued that these graduates should not be prioritised because they may lack familiarity with local epidemiology and NHS systems. With respect, that does not hold water. These students follow the exact same NHS-aligned curriculum as Queen Mary students in Whitechapel.
Contrast that with Clause 4, in which the Government rightly prioritise graduates from Ireland, but also prioritise graduates from Switzerland, Norway, Iceland and Liechtenstein. A graduate from Liechtenstein has no UK medical degree, has not sat the UK medical licensing assessment and has no training in UK epidemiology. Yet, under the Bill, they will be prioritised over a Queen Mary in Malta student who holds a UK degree and has been specifically prepared for the NHS. This is a manifest absurdity.
The Minister’s letter also suggests that including those students would undermine workforce planning because numbers are uncontrolled. That is incorrect. Queen Mary in Malta’s student numbers are capped by the Maltese Government at just 50 to 70 graduates a year—statistically negligible in a system of 11,000 places. To penalise them on such grounds is neither proportionate nor fair.
Furthermore, the Government’s own impact assessment justifies the Bill on the need to protect taxpayer investment, yet Queen Mary in Malta students are self-funded. This is not merely a matter of academic equivalence; these graduates provide the NHS with doctors trained to UK standards at no cost to the British taxpayer, representing a rare example of value without expenditure —precisely the kind of pipeline a fair system ought to support rather than disadvantage. By excluding them, the Government are working against their own value-for-money logic.
We also risk breaking a solemn international commitment. The Minister’s letter implies that our agreement with Malta is limited to ad hoc training. That downplays the reality. Since 2009, the UK and Malta have operated under a unique mutual recognition agreement regarding the foundation programme itself, explicitly renewed by the Department of Health and Social Care as recently as 2024. Malta is the only country in the world with this status. By unilaterally demoting these graduates, we are, in effect, tearing up a long-standing agreement with a Commonwealth partner—one that Malta’s own Minister for Health describes as having served both countries for over two centuries. Other universities, such as Newcastle University, which operates a similar campus in Malaysia, face similar predicaments. Its vice-chancellor has noted that its graduates too receive identical accreditation and transition seamlessly into the UK workforce.
Then there is the second critical flaw in the Bill: how it attempts to identify significant NHS experience for the upcoming 2026 recruitment round. Under Clause 2, the Government propose using immigration status, specifically indefinite leave to remain—ILR—as a crude proxy for NHS experience. This reveals a fundamental misunderstanding of medical training timelines. ILR typically, at the moment, requires five years of residence, yet UK graduates enter specialty training after just two years of the foundation programme. That creates a perverse experience gap. International doctors who have served on our front lines for three or four years, passed royal college exams, built a career portfolio and worked the same rotas as their UK colleagues will be treated as if they have no experience at all, simply because they have not yet clocked up the five years required for ILR. This, effectively, tells dedicated doctors that their three years of service counts for nothing.
In her earlier letter, the Minister defends this blunt proxy, as she did today, by claiming it was not operationally feasible to assess all applications for actual NHS experience in time for the 2026 cycle. We have received compelling evidence to the contrary. Doctors currently using the recruitment platform Oriel inform us that the system already captures data on months of NHS experience. The data exists, the mechanism to do this fairly exists, and to persist with the ILR requirement is to prioritise administrative convenience over the reality of clinical contribution. We should define significant experience not by visa status but by time served. A benchmark of two years of NHS experience would be equitable, and mirror the two years of core training required of UK graduates.
Furthermore, we have all received distressing correspondence regarding doctors on spousal visas. These are permanent residents, married to British citizens, with an unrestricted right to work, yet under the Bill they are placed in the lowest priority tier. We risk driving away not just those doctors but their British spouses who work in our public sector as families are forced to emigrate to find work.
There is a deep anxiety, in particular, regarding the mid-cycle implementation of these rules. We have received correspondence from doctors who have spent years building career portfolios and investing substantial resources based on published criteria, only to find the rules changing while the recruitment process is active. This creates procedural unfairness and huge instability for their families. If our guiding principle is, as it must be, fairness, then it cannot be right to introduce such consequential changes mid-cycle when candidates have already ordered their lives and careers around criteria that have stood in place for many years.
To cap it all, there is a glaring incoherence at the heart of the Government’s approach. Just days ago, the Education Secretary, Bridget Phillipson, announced a new strategy to grow our education exports to £40 billion a year by 2030. She explicitly encouraged our universities to expand transnational education and open campuses overseas. Yet in the Bill, the Department of Health and Social Care is actively undermining that very strategy. We cannot have the Department for Education urging universities to go global to boost the economy while the Department of Health and Social Care simultaneously pulls up the drawbridge against the very students who enrol. That is a fundamental contradiction.
For Queen Mary in Malta, the solution is simple: a minor amendment to Clause 4 to recognise its UK degree, or the inclusion of Malta in the priority list, honouring our 2009 agreement. For the broader issues affecting international medical graduates, we must abandon the blunt instrument of ILR and use the data we already have to recognise two years of service as the true mark of commitment. Let us not mar a necessary piece of legislation by failing to correct these obvious injustices.
Baroness Finlay of Llandaff (CB)
My Lords, I declare my recent observer role with the Medical Schools Council, and as a pro-chancellor at Cardiff University, which, of course, has a medical school. The Bill aims to address a problem that has been brewing for years—but some medical graduates will unintentionally suffer, and we must consider them.
Specific groups have already been mentioned by the noble Earl, Lord Howe, and the noble Lord, Lord Clement-Jones, but they warrant reiterating. First, there are medical graduates from established overseas branch campuses of UK universities. That is not only Malta; Newcastle has already been spoken of, and there are others. There are also UK citizens studying medicine in the EU in good faith, always intending to work in the NHS, and international graduates unable to receive specialist training in their own country, who come here before returning to develop key specialist services in their home country. There are also those who relied on the published recruitment framework in good faith for years, and made irreversible decisions—relocating families, investing time and money, filling rota gaps and sustaining NHS services through Covid—never expecting specialty training to be rewritten while applications were already in progress. Would a separate tier, after the current priorities but ahead of those with no UK connection, provide a solution?
As has been said, a few UK medical schools deliver their degrees from established branch campuses abroad, by fully accredited programmes regulated by the General Medical Council. They follow the UK curriculum, and are taught and assessed in English to identical academic and clinical standards. These students graduate with a UK medical degree and will have passed the UK medical licensing assessment. They often apply to work in the NHS and transition smoothly into clinical practice, benefiting the NHS. These graduates have applied for UK training posts under one set of rules, but face different rules with limited options. Should these UK medical graduates not be prioritised over graduates from non-UK universities across the world?
There is a wider significance, as has already been alluded to. The Government’s international education strategy states the importance of universities seeking global opportunities, such as developing branch campuses. To avoid opening the floodgates, do the Government envisage capping UK healthcare degrees delivered offshore? This year, there were over 25,500 UK applicants for just over 10,000 UK medical school places. Selection at 18 years old is difficult. Each year, having invested in years of their schooling, we reject highly capable home applicants who would be excellent doctors. Many of them choose to study abroad, determined to return to work in the NHS. Should they be required to pass the UK medical licensing assessment, so that UK citizens studying in the EU after school are not left stranded?
For postgraduate trainees who applied through the previous recruitment framework and are currently working in the NHS, with several years’ experience, would recognising service from Covid onwards be considered in the eligibility in the current round? Where is the expansion of specialty training posts and academic posts for some of these graduates?
Lastly, all UK health expertise benefits international development. Many countries lack their own training expertise, and historically the UK has trained specialists to go back to develop services in their home countries. This altruism improves global health and creates opportunities for the NHS, universities and pharmaceutical and tech companies to gain international contracts. Without routes for overseas doctors to train here, our international partners will look elsewhere.
The Bill apparently aims to secure a reliable supply of doctors for the future, ensuring that those with a UK medical link are more likely to progress to current consultant roles and continue their careers in the NHS. Will international medical student places here be further limited? Otherwise, the Bill could mean that UK students forced to train overseas through limited home student places will not be prioritised, whereas international medical students at UK medical schools will. In passing the Bill with speed, we must avoid penalising our own graduates, jeopardising international partnerships, or appearing hostile to international excellence or unreliable by suddenly changing the rules. Will the Minister consider widening the priority group or adding other tiers to recognise the importance of medical graduates?
Lord Roe of West Wickham (Lab) (Maiden Speech)
My Lords, it is the greatest honour to speak in your Lordships’ House for the first time. I thank my fellow noble Lords from right across the House for the warmth of their welcome, extended not just to me but to my family on my introduction. Equally, I thank all the staff, from Black Rod and the Clerk of the Parliaments to the doorkeepers, police and security staff—and, perhaps most importantly, as I have spent the past two weeks eating, to the caterers. I can say with some certainty that your Lordships’ House has some of the best work canteens I have ever encountered, and I have been in some over the years. Without wanting to labour this—pardon the pun—the ham, egg and chips in the Millbank basement is of particular note to a connoisseur of such matters. The professionalism and patient good humour of every single noble Lord towards a new Member of this House is a credit to the extraordinary place that they both protect and sustain.
I thank my sponsors, my noble friends Lord Kennedy of Southwark and Lady Twycross, who, alongside my noble friend Lady Smith of Basildon, have offered encouragement and support as they have guided me in the process of joining your Lordships’ House. In particular —and I am looking at her now—I need to thank my noble friend Lady Twycross, who was my deputy mayor when I was first appointed as London Fire Commissioner. She deserves particular thanks, as my noble friend is probably asking herself once again why she is having to keep me on the straight and narrow in a new job. It is also a particular pleasure to see in his place my old friend, my noble friend Lord Duvall, who also served London for so many years and was such a great supporter of the London Fire Brigade—my chosen profession—and to speak on the same evening as him. That gives me great pleasure.
I am very much a son of south London, and my journey here has been shaped by that, along with a lifetime in uniformed service, first in the British Army, coming from a long line of soldiers on my father’s side, and then in the London Fire Brigade, where I served at every rank from firefighter to commissioner.
I believe that I am the first firefighter in history ever to sit in your Lordships’ House. Serving for half my life in, and eventually commanding, the brigade, one of the world’s largest and busiest emergency services, and one of this country’s last great remaining working-class institutions, was the most enormous privilege. It gave me an education in life and membership of a club that you cannot pay to be part of. I hope that I can therefore give firefighters and their families some voice in my contributions here.
I would also like to speak to the role boxing has had in my life, first as a competitive fighter for many years, then as a coach, still now as a club chair and—unbelievably to me, as that young kid walking into a boxing club in south London all those years ago—sitting on the national board that supports our great British Olympic team. The support and the safe space that boxing clubs provide young people, particularly in some of the poorest places in this country, must not be underestimated. Boxing gave me confidence, fitness, discipline, purpose and a structure.
At a time when the politics of division seem to be painting a picture of Britain, characterising Englishness in particular in a way that, as a proud Englishman, I simply do not recognise, boxing clubs are still very much beacons of openness, tolerance and unity. I have fought and trained in clubs and halls the length and breadth of these islands, and I can say that without exception my experience is that in boxing your faith, race, background and nationality are irrelevant, as what is shared in a boxing club is a common respect for anyone who has had the courage to take that first step into the squared circle and face their own fears. In that sense, the sport and its spaces both epitomise and set the standard for true British values.
In respect of today’s debate, addressing the quality and accessibility of the training we give our doctors, I believe that my experiences bear some relevance. Having responded alongside so many medical colleagues over the years, I know that, like being a firefighter or a soldier, a career in medicine is profoundly rewarding and has the greatest benefit to both the individual and their community. It seems clear to me that, by ensuring that our graduates are given priority access to the best available training, we will help to sustain and protect our health service while also providing important opportunities to young British people of all backgrounds to make a difference.
Lastly, and perhaps most personally to me, in my working life, both as a soldier and as a firefighter, I have been repeatedly and directly involved in the tragedies that befall ordinary people when politics, institutions and systems simply fail to protect them, often with catastrophic loss of life. I have been a witness in those moments, standing on streets from Portadown to inner London—witness to the unbelievable heroism of my fellow soldiers and firefighters in their actions in responding to those failures. Some of them made the ultimate sacrifice, whether then or in later years. They are never very far from my mind, and I must pay tribute to them today.
Equally, I recognise the resilience, courage and decency of survivors and families, particularly those I saw suffer so much following the Grenfell Tower fire. In their continued drive for justice and a safer built environment for everyone, they provide me with a lesson in dignity, resolve and clear purpose every time I meet them. I hope I might give them a voice in your Lordships’ House too.
It is in that context that I understand my privilege and responsibility in the House, as what gets said and done here and in the other place can, for better or worse, have the most profound consequences for our fellow citizens. With that in mind, I hope I can contribute with some value, give voice to those I met on the way and avoid adding, in the powerful words of Bishop James Jones following the horror of the Hillsborough disaster, to
“‘the patronising disposition of unaccountable power”.
I thank noble Lords again so much for their warm welcome and this incredible opportunity.
Lord Stevenson of Balmacara (Lab)
My Lords, it is a real pleasure to follow my noble friend Lord Roe of West Wickham, and to congratulate him not only on his excellent maiden speech but on the wealth of experience and expertise that he brings to our House. I look forward to a lot more—but I will not be meeting him in a boxing ring.
If you read a quick resumé of my noble friend Lord Roe’s career—university. Sandhurst, distinguished military service, Commissioner of the London Fire Brigade—you might be astonished, as I was, to realise how much he has achieved in so little time; he is really quite young. Although he is too modest to have gone into the detail, we can all guess what two tours in Northern Ireland, where he was wounded, must have involved. We should also note, as he said, that he rose through all the ranks in the London Fire Brigade, including being incident commander for the Grenfell Tower fire, before being appointed London Fire Commissioner.
I am sure I speak for the whole House in joining my noble friend Lord Roe in paying tribute to the heroism of his fellow soldiers and firefighters. I welcome his determination to give voice to those he met during his uniformed service. We are delighted to welcome our first ex-firefighter to the Lords; I am sure I also speak for all in saying that we look forward to hearing his future contributions, and indeed those of my noble friend Lord Duvall, when he comes to speak.
Turning to the Bill before us, it is good to have confirmed that its aim is to address issues created by the current approach to allocating places on the foundation programme and medical specialty training in the UK. However, while the Bill deals with process, it does not deal with the content of courses. While I get the importance of having medical staff trained within the NHS, should the 10-year health plan of which it is part not also have an engagement with the curriculum content?
To give an example of what I mean, I ask my noble friend Lady Merron: how do His Majesty’s Government intend to implement the Council of Europe Committee of Ministers’ recent recommendation on equal rights for intersex persons? I declare an interest as a person born with hypospadias, which is an intersex condition. Implementing this recommendation could require significant changes in the academic training of our doctors and surgeons, which surely need to be monitored. For example, it includes: prohibiting non-consensual medical interventions on intersex children, ensuring such procedures are postponed until the individual can provide informed consent; strengthening anti-discrimination measures and ensuring access to justice, including protection from hate speech and crime; addressing inequalities in healthcare, education, employment and sports, including the need for inclusive policies and safe environments for children; ensuring that family laws, including those relating to legal recognition and parentage, are accessible to intersex people without discrimination; and calling on member states to take concrete legal and non-legal measures to uphold the dignity and rights of intersex people.
Some of these recommendations have already been legislated for in the UK, most notably the law against female genital mutilation. But the recommendation is seen by many people as a landmark, as it shifts the focus from medicalising what are often seen as disorders towards protecting fundamental human rights and ensuring equal participation of intersex people in society. It seems important that these things are fed into the medical curriculum, and I look forward to hearing the Minister’s response to that.
I appreciate that this is a complex issue and that this Bill may not be the most appropriate place to introduce such changes but, when she comes to respond, I hope my noble friend will recognise that my underlying point is about how the content of the courses provided within the foundation programme and medical specialty training in the UK can take account of policy initiatives of this type. I would of course be happy to meet with her to discuss how best to take the issue forward.
Lord Patel (CB)
My Lords, when there is such a short Bill, there is a temptation to repeat what has already been said in great detail, because it has not been said by me. I will not succumb to that temptation but will briefly point out the areas where I agree with what has been said, particularly by the noble Earl, Lord Howe, the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Finlay.
In the many letters and emails—hundreds of them—that I have received, two things stood out. One was the grievance felt by people who were already in the process of applying for the jobs; they now feel as if they have been thrown to the wolves. The other lot were the people who are British citizens who trained overseas and cannot now access training in our programmes. There is one other minority group: those who felt that they have had some experience in the NHS, but it is not as yet defined how much of their experience, starting in 2027, will be counted. The noble Lord, Lord Clement-Jones, referred to the immigration requirements which may or may not be counted, but that produces another. These are the groups that feel disadvantaged. What I felt on receiving these letters was that we are making people who have serviced our NHS for decades feel they are no longer required and are to be abandoned. I hope we do not give that impression.
Having said that, I recognise that, in principle, the idea that UK medical graduates should be prioritised for jobs in our NHS is correct, because it is not right that they cannot get the jobs they apply for, particularly in foundation and specialist training. On the foundation programme in Clause 1, I am concerned that British citizens who may have trained in GMC-approved institutions with the same kind of curriculum described by the noble Lord, Lord Clement-Jones, cannot be considered for that. I have already made the point about specialist training programmes and those who have gone through the process of applying in good faith. We do not as yet know what experience will be counted from 2027 onwards, so I hope the Minister can comment on that.
Clause 4 refers to a “UK medical graduate”, and says:
“‘UK medical graduate’ means a person who holds a primary United Kingdom qualification”.
It does not say a “UK citizen” who is qualified. Does that mean that an overseas student attending medical courses in our universities, who is therefore a graduate of our universities, qualifies or not? I might be wrong in my interpretation. The clause continues:
“but does not include a person”
with
“a majority of their … training for that qualification outside the British Islands”.
Some of our universities run joint courses. I am a professor emeritus of the University of Dundee, which, for instance, runs one course for Malaysian students. They do part of their training in Malaysia and finish their clinical training in the UK, at Dundee. The Bill refers to a majority of their training but, in a five-year course, if the overseas student does three years in a UK university, does that count as a majority of their training in the United Kingdom?
I am glad that the Minister alluded to refugee status and was pleased to hear what she said. That was to be one of my points, because I have had representation from Ukrainian refugees who are already working in the NHS, and whose status would otherwise have been removed.
Clause 4(5) says:
“‘primary medical qualification’ means a qualification that is treated by the General Medical Council as equivalent to a primary United Kingdom qualification within the meaning of the Medical Act”.
There are lots of institutions which the GMC recognises as equivalent, but we do not regard their graduates as UK graduates, although they do the same curriculum. Universities such as Newcastle have already been mentioned several times. They have been encouraged by the education department to open campuses, as other universities have been, and to provide the same curriculum. There are then graduates of Queen Mary University, Newcastle University or Dundee University. Their status is not quite clear.
I am concerned about these issues and hope that we will be able to have greater clarification. But I accept that, in principle, prioritising postgraduate medical training for UK graduates is correct.
Lord Stevens of Birmingham (CB)
My Lords, I declare an interest as an honorary fellow of the Royal College of Physicians and the Royal College of General Practitioners, and as chair of the council of King’s College London, which is Europe’s largest educator of health professionals. I too congratulate the noble Lord, Lord Roe, on his excellent maiden speech. Given the deteriorating physical fabric of the Palace of Westminster, it is reassuring to know that we have a firefighter in our midst.
I start by endorsing the thrust of the policy set out in the Bill. It clearly makes sense for the NHS and for British taxpayers to properly connect undergraduate medical education with access to specialist training, and then the flow-through of doctors able to contribute over the balance of their careers to the work of the NHS. All that makes total sense. Nevertheless, I echo three of the concerns we have heard already in the brilliant contributions to this debate.
The first is about the difficulties and concerns around the transition year, 2026, that the Bill proposes. For 2027 and beyond, rightly, there is the suggestion in the Bill that applications will be prioritised from doctors with NHS experience, who have made a contribution to the NHS. But because of not being able to get the computer system right, that is excluded for the 2026 transitional period.
As we heard from, I think, the noble Lord, Lord Clement-Jones, there is a range of views that suggest that that is not a correct assessment. I think the impact assessment says it is £100,000 to sort out the Oriel computer system—against a £4.3 billion taxpayer expenditure in this area. This is an area where the Minister and the Minister in the Commons, Karin Smyth, might want to give officialdom a little tap and just double-check that what they are being told is right, not least because there is a degree of oddity about this in that the Government declared their intention to introduce this new prioritisation for UK graduates seven months ago. It was in the 10-year NHS plan published on 3 July. It is not completely clear why there has been a seven-month lapse before we get this emergency Bill that has to be passed within four weeks.
There is the transitional 2026 concern and then, relatedly, there is the question of whether, by just changing the prioritisation, the Government actually have a game plan to deal with the more fundamental, underlying problem of the bottlenecks. This piece of legislation by itself does not widen the bottlenecks, it just changes who will occupy them. As the noble Earl, Lord Howe, I think, asked, it would be very useful to know, of the 1,000 additional specialty training places over three years promised in the 10-year plan, or the 4,000 put on the table in December as part of the Government’s negotiation with the BMA—of which 1,000 extra were to be in place for the coming year—what is their current assumption about the expansion in specialty training that will go alongside this reprioritisation for 2026 and 2027?
Today, we have seen the publication of the cancer plan, which, quite rightly, says that the Government
“will work with the Royal Colleges to encourage resident doctors and internal medicine trainees to specialise in clinical and medical oncology”—
where there are significant shortages—and will prioritise
“training places in trusts … where vacancy rates are higher and performance is lower”.
Can the Minister tell us whether the Government will give effect to that commitment in the cancer plan with the 2026 and 2027 increases in specialty training places, which are clearly required?
To circle back to a point that the Minister made—and, indeed, the Health and Social Care Secretary made at Second Reading in the Commons on 27 January—the Government’s estimate appears to be that even with this tighter, or reshaped, prioritisation, there will still be a ratio of two applicants to every place for specialty training. Just stand back a moment—that means we will be turning away half the doctors who would be able to fill those places. Are the Government sure that they are going pedal to the metal on the expansion in specialty training to reduce that oversubscription rate?
How does that connect with the upcoming rebadged, or refreshed, long-term workforce plan, given that the undergraduate doctors who start their training this year will be, in practice, coming out to deliver clinical care as consultants from 2040 and training their successors up to 2070? We really do need a long-term plan here, rather than the constant chopping and changing that, sadly, we have seen.
Finally, I completely endorse the comments about Malta. Three collective institutions have been awarded the George Cross—Malta and the NHS are two of them. We should sustain those relationships. The idea that we have less in common with the Maltese than with the good people of Liechtenstein—I have just had a quick look and Liechtenstein has one 35-bed hospital and a per capita GDP more than three times that of the UK—misses the point. We have to see the wood for the trees; the Department of Health and Social Care needs to raise its gaze and value these historic relationships that are so important for us.
Baroness Coffey (Con)
My Lords, I start by welcoming the noble Lord, Lord Roe, to the House. I am sure that his experience will be informative in many ways, including now as chair of the building safety regulator. I am sure his insight will be very valuable to the R&R committee in a variety of ways. At some point I would love to have a conversation with him about his experience, including not having retained firefighters in London and what more we could do to try to get every firefighter across this country to potentially become a first responder; again, making sure that the blue-light services work together.
Turning to the Bill, I think there are a number of issues in it. By and large, I support the principle, but in terms of prioritisation, my sense is that it does not really prioritise, certainly not by making sure that UK students get priority ahead of other people in the different priority groups. Discussion has been had about Switzerland, Liechtenstein and Iceland; I assume there is some historic international treaty. It is clear in the way that the Government have brought this legislation forward that there is no such agreement or treaty when it comes to Malta, but I am more sympathetic to the Government on this issue than perhaps some other people on these Benches are.
This may seem unimportant, but this was rushed through in a day in the Commons by the right honourable Wes Streeting. Normally this sort of legislation is genuinely for emergencies, very specific situations, so it beggars belief that the Government seem to be using this as leverage with the BMA on strikes. Indeed, the Secretary of State mentioned this. When he was asked whether this was so urgent—and it will please students who are members of the BMA—he stated:
“It is important that the Bill is workable. A number of factors may well interrupt our ability … One of those factors is the ongoing risk of industrial action”.—[Official Report, Commons, 27/1/26; col. 805.]
I am not sure that that is a valid reason for the Bill not to be commenced immediately, and it would certainly reduce the uncertainty for some of the other situations, including the 2026 application.
I just wanted to check my understanding on something. I am not suggesting that the department is cooking the books in any way, but the impact statement provides analysis that does not help us to get into the core detail. I would be grateful if the Minister would consider releasing more raw data. I ask that because we lump all our international medical graduates into one category in this analysis, and the Bill is asking us to have more categories of IMGs.
The noble Lord, Lord Patel, was accurate in his understanding. I think there has been quite a lot of debate in the Commons, given that the UK Government have paid a lot of money—I think we heard it was about £4 billion a year on the clinical elements. I assume that is a combination of the NHS tuition fee bursary and other elements provided to medical schools. International students do not get that bursary. At the moment, it seems that by paying the £40,000 to £50,000 a year for being trained in a UK degree at a UK medical school, international students could well get priority. Within UK medical graduates, or indeed persons in the priority group which we just referred to, there is no actual prioritisation for UK students—by that, I mean UK nationals.
I think it is fair about the relationship with the Republic of Ireland; that is a historic relationship, and I do not object to that. But in the specialty training programmes, Clause 2(2)(e) covers, basically, people from the European Union and I am trying to understand why that is necessary. We just keep coming back to the fact that none of this is really prioritising UK students in UK medical schools. I would be grateful if the Minister could set out how the Government intend to prioritise all the different categories. Is it the intention that the prioritisation will start with (a), then (b), then (c) and then (d)? It would be useful to understand that.
At the moment, the Bill would allow people under paragraph (d)—to be set out in regulations—to get priority ahead of UK medical graduates. It is unclear, therefore, how this might work.
I appreciate that what happened with visas has been cited as part of the problem. There is another way, however, in that the Government could adjust the skilled worker visa to address some of these issues. Have they considered that? I would be grateful if the Minister would write to me and the House. Generally speaking, though, I intend to support this Bill.
Baroness Hollins (CB)
I add my congratulations to the noble Lord, Lord Roe, on an excellent maiden speech.
I welcome the Minister’s explanation of the Bill’s priorities, which I broadly support, but I have some concerns about the possible unintended impact on the UK’s medical training reputation, especially given recent investments in international recruitment. While some predict that artificial intelligence may reduce demand for doctors, I believe that medicine remains fundamentally human, and current shortages make such predictions rather unconvincing. The NHS continues to face consultant-level vacancies and low morale among doctors. I agree with the noble Earl, Lord Howe, about the need for a significant increase in training placements.
Competition for medical jobs is long-standing. Certainly when I qualified—a long time ago now—there was no guarantee of specialty training at all. There was an assumption that the majority of graduates would proceed into general practice. But a shortage of specialty training placements now prevents both domestic and international graduates from progressing. This situation is made worse by poor workforce planning over many years, despite well-forecast numbers of medical students. It is this systemic issue that needs urgent attention. There are some key questions, such as whether this Bill is the best solution, whose investment in training is at risk, and how affected students and doctors will be notified and understand the impact for themselves. Many correspondents have shared their anxiety about the Bill’s career impact for them.
I will not repeat the arguments made by the noble Lord, Lord Clement-Jones, regarding the Queen Mary’s students in Malta. Similar arguments apply to students at City St George’s Cyprus campus, who follow the UK curriculum, meet GMC standards and are awarded UK-recognised qualifications yet will be deprioritised simply for studying overseas. They have taken identical exams and have committed significant time and money based on assurances that they could compete for UK foundation programme posts. Changing eligibility rules just as they graduate is unfair; it undermines confidence in our system and risks leaving qualified graduates without posts, damaging both the NHS and, of course, the reputation of City St George’s.
As an emeritus professor at City St George’s, University of London, I asked the dean for more information about the contracts that City St George’s has with students in Cyprus. Paragraph 3.4 of its contract says:
“On successful completion of the Programme, SGUL shall grant to the Student an award certificate to which he or she is entitled under the provisions of SGUL Policies and Regulations and will provide the Student’s name to the GMC in accordance with GMC requirements to enable students to be registered with the GMC as having a Primary Medical Qualification”.
This means that graduates were able to apply for the foundation programme and be considered equally alongside students who had studied in the UK. The issue of any visas required by graduates, of course, is outside the contract, as work permits for the UK sit under UK Immigration Rules. The question is whether there will be any legal risks. If a legal challenge was successful, presumably it would be financial, and presumably it would be the Government who would be accountable. I am not sure that the university could be held accountable for a breach of contract if the breach is the result of a change in law.
I also urge that consideration be given to whether those studying in overseas campuses might be included in the priority group, or at least to phasing in the changes prospectively for the sake of those already in training. Excluding such students devalues these important collaborations. I would be interested in the Minister’s response on whether there could be some valid legal challenges.
Fair workforce planning seems to be essential. Without adjustments, the Bill threatens morale and may drive talented doctors away. I have been thinking about proposing an amendment to ensure that graduates with UK medical degrees are prioritised for foundation programme entry, regardless of study location, which would seem to be fairer. One final point is that, for these overseas campuses, the numbers are actually quite small.
Lord Duvall (Lab) (Maiden Speech)
My Lords, like my noble friend Lord Roe, it is an honour and a privilege to make my maiden speech today. Just over three weeks have passed since my introduction to this House. I have a sense of awe and pride at the history of this House but also the knowledge of how I have encountered Members from all sides of the House.
I would like to extend my thanks to the doorkeepers, the housekeepers and the catering staff, along with Garter, Black Rod and the Clerk of the Parliaments. I would like also to thank my introducers, my noble friend Lord Harris and my noble and learned friend Lord Falconer, who are former colleagues and valued friends with whom I have worked over many years. My thanks go to the Leader of the House, of course, and to the Chief Whip for the support and wise advice that they have given me.
I am also thankful for the way that I have been welcomed and received by noble Lords, again from all sides of the House. I have worked with many noble Lords in my time in local and regional politics, and it is a pleasure to be working with so many of you again for the benefit not just of London but of the country.
I want to take a moment to thank my partner, Jackie Smith. I am not referring to Jacqui Smith, my noble friend Lady Smith—I do not want to set any hares running. My Jackie Smith hails from Bermondsey, south London; perhaps I should not have mentioned, but a number of us have south London connections. I owe a lot to my Jackie. She has her own political career and her own achievements. She has been a councillor in her own right, and she has achieved many great things locally for the council and for the people that she serves. She supported me unfailingly over many years, and when I underwent a double bypass, she and the NHS carried me through it. There were difficulties, and, quite honestly, I would not be here today without her. In every sense, I am a better man because of her.
My journey—and it is a journey that I have been on before coming to this House—would not have been possible without the opportunities created for me by others: in education; in employment; and in the Labour Party and my trade union NUPE, now Unison. It also rests on the enduring influence of my mum and dad, who are not here to share this moment today.
I was made in Woolwich. The place has always been my home. Woolwich is full of history at every level, from its deep military traditions to its social legacy of the Royal Arsenal Co-operative Society and the polytechnics that opened the way for part-time learning and women returners into education. I am proud of my Anglo-Indian roots, proud of my mixed heritage and proud to be part of our nation of countries and nations. I am in Woolwich partly because of the Royal Artillery; I share that with my noble friend Lord Roe. My dad and both my grandfathers were gunners, and their service greatly impacted on my life. I am, by choice, the Mayor of London’s Armed Forces champion, and I will continue to advocate for our service men and women, veterans and their families in this Chamber if I can.
What most people do not know about my life is that I had ill health as a child. I spent 10 years in a special school. I left school at 16 and went straight into the world of work. My first role was working in a youth centre with young people. I was young myself; it takes me a while to think about that. I then became a trainee, what we would call an apprenticeship trainee, in local government, which gave me a solid grounding in public services.
I was also active in the trade union movement, representing and advocating for colleagues. I served as a shop steward and later I became a branch secretary. More importantly, I took advantage of the training opportunities that the trade union movement, and my employer, offered me. I remain grateful for that to this day.
I am also proud that I have had some opportunities to do international work. I have been involved, through the Commonwealth Local Government Forum and with colleagues in the Council of Europe, in promoting best practice within local government in regional chambers.
Closer to home, I am proud that I led Greenwich council and that I have spent the past 25 years at the London Assembly, taking on both scrutiny and many executive responsibilities. It is a real privilege to be in public life and serve people, and it is a privilege I never take lightly. I have spent my political life responding to and promoting change. You have to pre-empt, prepare and shape change, not be carried by it. It is interesting in the context of the debate that we are having tonight. Our country faces that change now, and the work which this Government are undertaking, the policies we scrutinise in this House and the way we do it define how the country embraces that change.
The Bill before us is about changing how medical training posts are allocated in the UK, ensuring that those trained here are first in line for NHS training programmes. It says something about the economic challenges our young people face today that those graduating from medical schools after five years of university study are often struggling and waiting to secure their first roles in medical training posts.
The Bill will help us develop the next generation of healthcare professionals. Internationally trained doctors will continue to make a huge contribution to our NHS. Nobody will be excluded from applying. There are some issues around the detail, which the Minister will want to respond to, but it will help us ensure that young people who have spent their early lives working incredibly hard in our schools and universities can fulfil their dreams. It will give them certainty as to where their hospital posting will be, and it will help maintain an NHS workforce that can continue to provide world-leading, life-saving care. I see this as giving an opportunity, in the same way that others have created opportunities for me throughout my life. Thank you.
Baroness Thornton (Lab)
My Lords, it is wonderful to follow the great maiden speech of my noble friend Lord Duvall—Len, to the rest of us—and I am proud to welcome another Labour and Co-op member to your Lordships’ House.
Len and I were trying to remember how long we had known each other. It is certainly since the mid-1980s, when I was the political secretary of that venerable institution, the Royal Arsenal Co-operative Society, based in Woolwich, and young Len, as he said, was born and grew up in Woolwich with close connections to the Royal Arsenal; his father and grandfather served as gunners in the Royal Artillery, and he was a local member.
It was clear to me that this young activist was clearly going places, and indeed he did. He was elected to Greenwich council in 1990 and became its leader in 1992, standing down when he became a London Assembly member. Remarkably, my noble friend—although he did not say this—has held his seat of Greenwich and Lewisham for the last seven GLA elections and is the only member of the GLA to serve since it was founded in 2000. During that time, he has held many positions, including chair of the Metropolitan Police Authority.
But the measure of a person is not just the positions they hold; it is what they do and achieve. I think we can safely say that my noble friend has served his Greenwich community and London magnificently over the years, with the regeneration of the Thames Gateway, the Greenwich waterfront, campaigning and getting investment in local communities, and much more. I understand that my noble friend has been and will continue to be chair of the Labour group in the GLA and, close to my heart, he also has an unmatched record of support for equality and human rights.
Finally, I think it is likely that my noble friend and I are the only Members of your Lordships’ House who have both been chairs of the Greater London Labour Party. I became chair in 1986 and served for several years, and my noble friend became chair in 2002. I think it is safe to say that we both bear the honour and the scars of that position. I welcome my noble friend to our Benches and I know we have much to look forward to in his contributions.
I thank the Minister for her introduction to the Bill, and the noble Lord, Lord Roe, for his wonderful maiden speech. In the debate, I had a sense of déjà vu because, as I look around the Chamber, I see that many of us have been here before. I was in a different position at that time, but it gave me a great deal of pleasure to look round and listen, even to the noble Earl, Lord Howe, opposite whom I have been for about 20 years in various forms, discussing health.
It does not seem so long ago that, during the course of what became the Health and Care Act 2022 which established ICBs, many of us across the House were begging the then Secretary of State to include a commitment in the Act to have a workforce strategy, to no avail. However, as the noble Earl said, the work- force strategy then appeared in 2023.
It seems to me that a key moment in 2026 will be the publication of the new long-term workforce plan for the NHS. The plan, due this spring, will be the first for our Labour Government and is expected to set out how the workforce will be developed to underpin the 10-year health plan. It has of course been built on earlier workforce strategy work and will set out how staffing needs can be matched to the future model of care.
As the Minister said in her opening remarks, delivering that plan depends on our staffing. Therefore, improving NHS staff recruitment and retention will be central to delivering this plan. This small and important Bill should be seen in that wider context. It addresses an immediate problem and offers an immediate solution with its main functions, which have been outlined to us: for medical foundation training, the prioritisation of graduates of UK medical schools; for medical specialty training posts starting in 2026, prioritisation at offer stage of graduates of UK and Republic of Ireland medical schools; and for medical specialty training posts starting in 2027 onwards, prioritisation at interview and offer stage of graduates of UK medical schools.
I am aware that many of us have received letters about this from students who feel sometimes aggrieved and, certainly, concerned—particularly students from Malta, and I know the noble Baroness, Lady Gerada, will be addressing this, as others have. There are three things that have been identified, as outlined by the noble Lord, Lord Patel, and other noble Lords.
We will need to address, and solve, in the Bill whether or not we are ensuring fairness as the Bill progresses. I have two nephews who have qualified in recent years—one in Liverpool, one in London—and I recall from both of them the uncertainty they faced about where they might end up. It seems to me that, if we are increasing the number of places available, we must ensure that it is done in a way that addresses regional issues and regional needs. I ask the Minister to confirm that that is one of the things that will be taken account of as this progresses.
This Bill is welcome, and I welcome the rapidity with which we have responded to this issue. We can be sure that the House will resolve the issues facing us—fairness, our overseas graduates and all the others that have been outlined—because there is good will to take the Bill through the House. I think that means that it will fare well.
Baroness Gerada (CB)
My Lords, I also congratulate the noble Lords, Lord Roe and Lord Duvall, on entering this House. As a newbie myself—I have been here only about six weeks—I know that it is an enormous privilege, as well as incredibly hard work.
The principle at the heart of this Bill is the right one: UK-trained medical graduates should be properly prioritised for the foundation programme and subsequent specialist training. No one can dispute that it is wrong that UK graduates, educated at a cost of billions to the taxpayer, are forced to compete with overseas students, pushing many doctors abroad and depleting the talent pool that should be powering the NHS. I am grateful to the Minister for engaging with me over the last few days both personally and in meetings.
However, I have some serious concerns. The first, as has been alluded to, relates to Malta. As the only Member of this House to have Maltese heritage— I thank the noble Lord, Lord Stevens, for reminding me that I have two George Crosses, one from having Maltese nationality and the other from working in the NHS—this is especially important to me. Like many noble Lords, I have received letters and concerns, but I have also received representation from all quarters in the UK and in Malta about the impact of the Bill on Malta, including from its Minister for Health and Active Ageing. He wrote a letter to our government health team where he said:
“Whilst acknowledging the supreme interest of ‘home-grown’ graduates, this development raises serious concerns for this Ministry and the people of Malta. Aside from risking to undermine two centuries of proud tradition and the dissolution of a strong bilateral relationship in healthcare, this strategy puts the training and specialisation of Maltese graduates in jeopardy”.
This matters because Malta has a long, deep and historic relationship with the United Kingdom, and not just in medicine, although I will stick to that. For nearly 200 years, since the first Maltese doctor received their licence to practise from the Royal College of Surgeons, British and Maltese medicine have grown side by side: the same language, the same exams and, for many years, the same training programme. This is why it has been possible for doctors such as my father, who came to this country in 1963, to dedicate their professional lives to the service of the NHS. This is a small group of doctors but they have had an enormous impact—tonight I should have been at a conference celebrating the power and impact that Maltese doctors have had—from revolutionary surgery treatment for Parkinson’s to revolutionary, innovative treatments for cancer.
Nowadays, each year around 50 doctors complete their specialty training in the NHS, under a special arrangement in which the Maltese Government cover 70% of their salary, with a contractual agreement that these doctors return to Malta. It is a so-called finishing school; they come here to do parts of the training that they cannot get in Malta, such as for sickle cell in haematology. It is a win-win. The NHS gets talented, skilled doctors, often working in hard-to-fill non-training grade posts, at very little cost to it.
This Maltese-UK relationship has been strengthened in recent years, as we have heard, with the establishment in Malta of a UK-based medical school, Queen Mary University of London. This is a multi-million pound initiative of QMUL and the Maltese Government. Since 2009, QMUL has delivered an integrated training programme, awarding an MBBS degree that is academically and regulatorily identical to the UK London programme. These are not rich kids buying a medical degree; they are hard-working students, among the top performers across the MBBS exam. The diversity of the campus in Malta mirrors that of the UK: 80% are from Black and minority-ethnic groups, 20% are disabled and 65% are women. Their training is aligned to NHS principles and practice. Nearly 80% of them do part of their training in a UK NHS hospital. Of course they understand the NHS—nearly 70% of these students are British nationals or have indefinite leave to remain in the UK. Deprioritising these doctors risks abandoning a small, committed cohort without a fallback, simply because they choose to fund their own training. This seems unfair.
I will briefly move to another area where I have serious concerns. This legislation will disadvantage many international graduates already in training who have spent thousands of pounds in good faith and were encouraged to come to this country to train. I have received representation from the British Association of Physicians of Indian Origin, which is seriously concerned about this. These international medical graduates have been disadvantaged since the start of the NHS; they have been subject to racism, bullying, disproportionate complaints and punishment, and failure to progress in their career. They now risk losing employment, their visa status and everything they have worked for. This seems unfair, especially given the assurance by the UK Foundation Programme that the same preference informed allocation method used in 2024 and 2025 would be used for 2026. Should there not be transitional arrangements for these doctors, who have relied on public assurances?
As is often said, if one intervenes in a complex system, there is no guarantee that outcomes will be achieved but there is a guarantee of unintended consequences. I look forward to engaging with the Minister further and hope we can redress some of these issues.
Lord Mohammed of Tinsley (LD)
My Lords, I thank noble Lords across the Chamber for their contributions, and in particular the noble Lords, Lord Roe and Lord Duvall, for their fantastic maiden speeches. I look forward to working alongside both noble Lords in taking forward this and other Bills. I was particularly interested to hear about the journey that the noble Lord, Lord Duvall, took here; I also worked with young people in a youth centre, and I have military history on both my mum’s side and my dad’s side of the family, spanning the First World War and the Second World War—although I confess that my mum’s uncle was not really sure where he was when he came to Europe to fight in the First World War.
I start by acknowledging, as my noble friend Lord Clement-Jones did, that I support the broad objectives of this legislation. As we have heard from other noble Lords, it is entirely reasonable for the United Kingdom to seek to ensure that our investment in medical education strengthens the NHS workforce and benefits patients here at home. Prioritising those who have trained and worked within our NHS is a legitimate aim. However, the way that principle is delivered matters greatly.
My first concern relates to the breadth of ministerial discretion in the Bill. It has not been covered by others, but it is really important. As drafted, the Bill will allow future changes on prioritisation to be made with limited parliamentary oversight. Decisions about who is prioritised for medical training places are not just technical adjustments; they shape careers, determine workforce supply and directly affect patients. Such decisions should therefore be subject to proper scrutiny and democratic accountability. This House has a principal responsibility to ensure that powers of this significance are exercised transparently and proportionately.
Many noble Lords have raised concerns about the timing of the Bill. As it makes its way through the legislative process, final-year students have seen their foundation training allocations paused. Thousands of graduates now face waiting until the last minute to discover where they will be working later this summer, potentially having to move across the country, as we have heard, with little notice. That uncertainty is deeply unsettling for graduates at the very start of their careers.
As we have heard from many noble Lords, including the noble Earl, Lord Howe, and the noble Lord, Lord Patel, the intention to introduce new prioritisation rules part way through the 2026 specialty training cycle also risks causing real harm. More broadly, we must be clear-eyed about the workforce challenges and what this Bill can and cannot deliver. On its own, it will not resolve the problem, which is the critical shortage of training places, as we heard earlier. The noble Lord, Lord Stevens of Birmingham, talked about it as the bottleneck. Without a significant expansion in this, there is a real risk of this being only a partial fix. Indeed, in many respects, this feels like closing the stable door after the horse has bolted.
In recent years, the number of domestic undergraduate medical school places has expanded, while at the same time the GMC has registered a large number of overseas graduates. Staff-grade jobs that were difficult to fill even five years ago are now inundated with applications, and the appetite among NHS employers to actively recruit candidates overseas has already disappeared. All of this sits against the background of a highly restrictive government cap on the number of medical and dental students that UK universities are permitted to train—caps to which international partners are not subject. Because of these constraints, medical schools have developed partnerships with overseas institutions and Governments to help cover the increasing cost of teaching UK students. Therefore, I ask the Government to reflect carefully on any unintended reputational damage the Bill may cause to UK’s medical education sector and to those international relationships, as we heard from the noble Baroness, Lady Hollins, and others.
Malta has been mentioned, but I will not mention it further. My noble friend Lord Clement-Jones and the noble Baroness, Lady Gerada, both made that point forcefully.
I want to mention the emails that we have had from Newcastle, but there are also other universities out there that have partnership arrangements with Malaysia in particular, and I just want to talk about Nottingham and Southampton. I know that, in the past, the university that I attended, the University of Sheffield, also had that working relationship where the first two years of the medical degree were done in Malaysia and then the students came across here.
I am also concerned about the wider workforce consequences and shortages not confined to one area of medicine. Radiology has been mentioned, but mental health services and other specialties are already under intense strain, with evidence that professional bodies are linking workforce gaps directly to potential patient safety concerns, particularly in the cancer care area. Any reforms of training prioritisation must therefore be accompanied by a clear and ongoing assessment of their impact across specialties.
At the same time, the Government are hastily implementing the Leng review without adequate consultation, which risks placing additional long-term pressures on resident doctors during their postgraduate training through an unanticipated reduction in the number of medical associate professionals supporting doctors in their clinical workloads.
Finally, I wish to raise a fundamental question about the Government’s chosen mechanism for prioritisation. The Bill places significant weight on immigration status, as we have heard from other noble Lords, particularly indefinite leave to remain. I struggle to understand why this is the most appropriate or effective measure. The NHS, as we have heard, already has a robust system in place through the Oriel recruitment platform, which records where doctors have trained, how long they have worked in the NHS and their progression through the system. That data speaks directly to commitment, experience and contribution to our health service.
Prioritising doctors on the basis of time worked in the NHS, clinical excellence and demonstrable service to patients would seem far more closely aligned to the Bill’s stated purpose than relying on immigration status, which, as we heard, with the recent changes potentially coming through as well, is shaped by factors beyond an individual’s control. Therefore, I urge the Government to explain why they have chosen this route and whether they have fully considered the unintended consequences for recruitment, retention and morale within the medical workforce.
The Bill seeks to address real challenges and its objectives are worthy. I just want to pick up on the point that the noble Baroness, Lady Coffey, raised about the grouping of applicants from around the world in just one group. It is only right and proper that, if we are scrutinising the Bill, we see data that I am sure the NHS holds about the origin of some of those students. To succeed, the Bill has to be fair and transparent and firmly rooted in the realities of the NHS workforce. Above all, it must sit alongside a serious commitment to expand training and capacity. I hope that the Government will reflect carefully on the issues that we have raised in your Lordships’ Chamber tonight as the Bill progresses through the House.
The Earl of Effingham (Con)
My Lords, I thank all noble Lords who have made such valuable contributions to this debate. I greatly enjoyed hearing the maiden speech of the noble Lord, Lord Roe of West Wickham. He mentioned ham, egg and chips, and I can assure him that he will enjoy himself very much in your Lordships’ House, but it is the staff in this House who are amazing. I know they are going to look after him as well. They do an incredible job, and they are part of the package; they will do everything they can to make his experience an enjoyable one. He mentioned that he had served over half his life in the fire brigade, which is an incredible achievement, as well as his Army service. I think when he referenced boxing, it was incredibly appropriate, because fitness, discipline and mutual respect will greatly assist him in making a real difference in your Lordships’ House, and we are really looking forward to hearing his future contributions.
I must say the same for the noble Lord, Lord Duvall. It was most interesting to hear his background. The noble Lord is obviously an expert in local and regional politics. He was made in Woolwich. He then went on to lead Greenwich council, and I think the noble Baroness, Lady Thornton, was entirely correct when she said, back in the 1980s, that Len was going places. I think it is a huge testament to the NHS that the noble Lord, Lord Duvall, has had a double bypass and he is standing before us, fighting fit. He is going to enjoy constructively challenging His Majesty’s Government —and, I am sure, His Majesty’s loyal Opposition—and we are very much looking forward to hearing his contributions as well.
As many noble Lords have put it so well, there is a great deal to think about in this Bill, and there are a number of areas where His Majesty’s loyal Opposition and other noble Lords will wish to press the Government further. The Bill is intended to address a situation that is universally recognised as both serious and unsustainable, and precisely because there is such broad agreement on the problem, it is all the more important that your Lordships’ House scrutinises the Bill with a laser focus to ensure that the final proposals will be hallmarked as best market practice.
The interventions thus far have already highlighted the value of that scrutiny, with noble Lords identifying a number of areas that would benefit from further consideration. The noble Baroness, Lady Finlay—who is, of course, widely respected in this area of legislation—the noble Baroness, Lady Gerada, and the noble Lord, Lord Mohammed of Tinsley, all spoke about unintended consequences. In attempting to solve the problem, there may always be unintended consequences. Our desire is to stress-test the potential outcomes to resolve that the end result is indeed beneficial for those who need the help and does not formulate a situation where more harm is done than good.
The noble Baroness, Lady Coffey, referenced the fact that this is a pressing issue and time sensitive, but that is no excuse for poorly drafted legislation, which may have serious ramifications for both questions of fairness and trusted relationships with our international allies.
His Majesty’s loyal Opposition support the core principle and intended purpose of the Bill but are clear that there are areas that would benefit from constructive challenge and a moulded consensus as we progress. We have had the opportunity today to discuss some of the practical effects that the Bill will create. Certain groups will, for a variety of reasons, fall outside the mainstream. The noble Lord, Lord Clement-Jones, said that the situation Malta was a “manifest absurdity”. The noble Baroness, Lady Finlay, rightly recognised that routes for overseas doctors to train here have multiple ancillary benefits. The noble Lord, Lord Patel, likened this situation to being “thrown to the wolves”. So those studying on accredited programmes as part of agreements with third countries, and British citizens who have done the majority of their training abroad for legitimate reasons such as military service, are two examples where we need further scrutiny.
In light of the potential unintended consequences of the Bill, where Parliament has had a limited opportunity for detailed analysis both in your Lordships’ House and particularly in the other place, it is vital that it contains robust mechanisms for review and accountability. Clear duties to review and report on the operational and “lived experiences” impact of this legislation will provide a pivotal safeguard, ensuring that Parliament retains a meaningful and proactive role in holding the Government to account as this framework is implemented. This would seem an entirely proportionate and sensible approach, allowing the Bill to work effectively while minimising potential unforced errors. We are confident that noble Lords will be keen to embed such provisions in the Bill.
Workplace confidence and consistency were mentioned. The noble Lord, Lord Clement-Jones, said that the execution is “flawed”, and the noble Baroness, Lady Hollins, said that there is a great risk of undermining confidence. So we must address the question of confidence among individuals for whom this legislation contains far-reaching consequences and whom it directly affects. Doctors make long-term, often irreversible, decisions about their training, specialisation and careers. Those decisions are shaped not only by pay or conditions but by their confidence that the system is fair, predictable and stable. They need to know what the rules of engagement are and that their career paths will be, within reason, clear, coherent and consistently applied.
No one likes uncertainty and, whether for government, business or relationships, everyone needs stability. Doctors are no different. Knowing that the goalposts will not shift unexpectedly part way through training is a must-have. Where legislation is rushed or where its effects are uncertain, that very confidence can be undermined. Even reforms that are well intentioned can have negative knock-on consequences if doctors feel that eligibility criteria are opaque, that established pathways may suddenly be reclassified or that decisions affecting their future are taken without sufficient forethought or scrutiny.
That matters because confidence and morale are central to retention in every aspect of life. If talented doctors harbour doubts that the system they are held to may not treat them fairly, or doubts about whether their own significant investment in training, as mentioned by many noble Lords, will be recognised, they may choose to take their skill set elsewhere—not because they lack commitment to our National Health Service but because they lack confidence in the framework governing their progression. A lack of confidence in any system will lead to pitfalls.
This is precisely why the detail of the Bill matters so much. Getting it right is not simply a technical or procedural exercise; it goes right to the heart of whether doctors feel valued, supported and willing to commit their careers to the National Health Service. An open and transparent workflow of prioritisation will only strengthen confidence. A rushed or overly rigid one risks doing the opposite.
Many former Members of the other place would suggest that helping health and social care in some small way is critical because it provides a unique opportunity to do the right thing through debate and constructive challenge, which should result and positive outcomes for everyone living in the United Kingdom. Our National Health Service, while not perfect—indeed, nothing is—remains based on the founding principle of providing universal care that is free at the point of use, and our doctors are at the heart of that premise.
This Bill aims to make provision about the prioritisation of graduates from medical schools in the United Kingdom, and His Majesty’s loyal Opposition look forward to working constructively with the Government and all noble Lords in facilitating that desired outcome.
Baroness Merron (Lab)
My Lords, I am most grateful to all noble Lords who contributed to this debate for the support given, including just now by the noble Earl, Lord Effingham, to working with us, because I think there is general recognition that we have a problem that needs to be dealt with. I am very glad, as I said at the outset, to have been the Minister at the Dispatch Box when my noble friends Lord Duvall and Lord Roe made their moving maiden speeches. They both have many years of distinction in public service, and I know that that will continue as they bring their own unique experiences and views on the world to your Lordships’ House, which will be much enriched by their presence.
A strong and consistent theme has come through today’s debate: a shared concern for the well-being of NHS staff, recognition of the importance of workforce planning and the need for a sustainable health service. I am grateful for the thoughtful questions, and I will endeavour to answer as many as possible—I have already referred to some in my opening remarks. I will of course review the debate, as always, and I will be pleased to write to noble Lords on those matters I was not able to get to.
This legislation is about giving future generations of doctors trained in the UK a clearer and more secure pathway into NHS careers. It is about sustainable workforce planning and, as the noble Earl, Lord Howe, referred to, about fairness—to those who train here, to taxpayers who fund that training and to patients. As many noble Lords acknowledged, significant public investment goes into medical education every year, so it is right that we ask ourselves how that investment can be best aligned to what we need.
I have listened closely to the concerns raised today, particularly about the Bill’s impact on those who will not be prioritised. To reiterate, the way I look at this is that the Bill is about prioritisation, not exclusion. I assure your Lordships’ House that all eligible applicants will still be able to apply, and they will be offered places if vacancies remain after prioritised applicants have received theirs. We absolutely expect that to be the case; that is our experience. To be more specific, there are likely to be opportunities in specialties such as general practice, core psychiatry and internal medicine, which historically attract fewer applicants than the groups we are prioritising for 2026. We still need those people.
The noble Baroness, Lady Hollins, asked about possible unintended consequences for the UK’s international reputation. I believe our proud history of welcoming colleagues from across the world will continue and, as I have just said, international colleagues can, of course, continue to apply after prioritisation has taken place and there are vacancies.
On new specialty training posts, we have committed to creating 1,000 of these new posts over the next three years, focusing on specialties where there is greatest need. This is on top of creating 250 additional GP training places each year. The noble Earl, Lord Howe, raised questions about the availability of training places. Expansion will be matched with training capacity. We have not yet confirmed which specialties will receive the new posts, but we will ensure that expansion is targeted where patient demand and workforce pressures are the most acute.
I am glad that the noble Lord, Lord Stevens, made reference to the cancer plan. It was a bright spot in today’s news—I am sure all noble Lords will understand —and has not had the airtime it ought to have had, so I am most grateful to him. What I can tell the noble Lord about the creation of new specialty training posts is that there will be a focus on those with greatest need. We will set out steps in due course and I look forward to keeping the noble Lord informed. Non-prioritised graduates will also continue to have routes into NHS careers through locally employed doctor roles, gaining experience that can support future progression and prioritisation.
Let me turn to some of the specific points that were raised by noble Lords. The noble Lord, Lord Patel, asked about British citizens who have graduated from medical schools outside the UK and will not be in the priority group. I understand why these concerns are being raised but, going back to the core of the Bill, to prioritise them would undermine our aim to build UK-trained capacity while ensuring we do not provide any more foundation programme places than we need. To reiterate, UK-trained doctors are more likely to work in the NHS for longer, and retention is an issue that is much discussed in your Lordships’ House. They will be better equipped to deliver tailored healthcare that suits the UK’s population because of what they understand. Reference was made to the provision extending also to the Republic of Ireland graduates. Their inclusion ensures consistency in workforce planning across both jurisdictions, which reflects the long-standing protocol rights for movement and employment. That was something in which the noble Lord, Lord Clement-Jones, was particularly interested.
On specialty training places starting in 2026, British citizens will be prioritised, because that is one of the prioritised immigration statuses being used as a proxy to indicate someone who is likely to have significant experience of the NHS. Why? Because applications for posts starting in 2026 have already been made. Prioritisation is only at offer stage because shortlisting is under way, so it is a timing matter about implementation. From 2027, immigration status will no longer automatically determine priority, but we have the ability to set out in regulations the persons who will be prioritised based on criteria which indicate they are likely to have significant NHS experience, or based on their immigration status. As I said earlier, we will be engaging with our partners to work out how best to define that.
On the point made by a number of noble Lords, including the noble Earl, Lord Howe, and the noble Lords, Lord Clement-Jones and Lord Stevens, about graduates of overseas campuses, including Malta, which I will turn to presently, having heard the noble Baroness, Lady Gerada, the UK foundation programme applications for 2026 show that there are almost 300 applicants from these overseas campuses, of whom 152 are UK nationals. This is a substantial number and, if we were to do what is being asked—to prioritise graduates of UK overseas campuses—our estimation is that this could encourage universities to establish further international partnerships which would simply increase pressure still further. It also risks creating a loophole that would encourage new overseas partnerships to seek preferential access to the foundation programme across the UK. The noble Lord, Lord Clement-Jones, picked out Liechtenstein in particular, but, as the noble Baroness, Lady Coffey, referred to, we are talking about the EFTA countries, which include Liechtenstein, and they are prioritised simply because of existing international agreements that we are obliged to honour. However, in practice, not all these countries are going to have eligible applicants.
Lord Clement-Jones (LD)
I hope the Minister does not mind. Does the Minister think that the agreement with Malta should be honoured as well?
Baroness Merron (Lab)
I am coming on to this, but the agreement in respect of Malta that I would refer to is a reciprocal health agreement. It does not apply in this area. It is about the reciprocal provision of healthcare. I will turn to Malta, however, after saying a brief word about overseas campuses generally.
Just to re-emphasise, overseas campus students are not part of the numbers that the Government are setting. We do not have that control. If we prioritised those graduates as well, that would eat away at the very core of the Bill and the things people actually want us to do.
The noble Baroness, Lady Finlay, and the noble Lord, Lord Clement-Jones, wanted an indication of how this would all align with the international education strategy. The Bill does not conflict with this, because the international education strategy supports universities expanding internationally. It does not prevent UK universities delivering medical degrees overseas. That strategy stays in place.
I turn to Malta for the noble Baroness, Lady Gerada—
Baroness Hollins (CB)
Can I just a question? The Minister has suggested that these students could come and work in non-training posts. But the problem, as I understand it—do correct me if I am wrong—is that, for example, St George’s students must complete their foundation year in the UK to be eligible to apply for full registration. Therefore, it means that they cannot complete their medical education without being eligible to apply for the foundation training. While a different contract could potentially be negotiated for future students at an overseas campus, the current students who have this contract and expectation in place need to have that honoured. I do not feel that the Minister has responded to the concerns that have been raised eloquently around the House.
Baroness Merron (Lab)
As I said at the outset, I will endeavour to answer all questions, but where I do not have an answer, particularly where I want to look at them in closer detail, I will be very pleased to write, of course, as always.
Still turning to Malta—which is a pleasure—let me say straight away that we do have a long-standing partnership with Malta on healthcare. It is valued and it will continue. Doctors who are training in Malta will still come to the UK, as they do now, to gain NHS experience to support their training, for example through fellowship schemes. This is not affected by the Bill.
As I discussed with the noble Baroness just yesterday, senior officials in my department have met with the High Commissioner of Malta to the United Kingdom in order to assure him of this. But it is important to prioritise in order to ensure a sustainable workforce that meets its health needs. Again, that is at the core of the Bill. Malta has its own foundation school. This is not part of the UK foundation programme: it is affiliated with the UK foundation programme office which administers the UK programme. That means—this point has been made to me—the Malta Foundation School delivers the same curriculum and offers the same education and training as the UK foundation programme. The Bill will not impact this affiliation or the other ways in which work carries on closely with the Government of Malta when it comes to health.
The noble Earl, Lord Howe, also made the point that he believed small numbers of students were impacted. I have referred to the 300 applicants from overseas campuses. I hope it is understood that that is why there is a significance there.
If there are other matters that I have not addressed to the satisfaction of the noble Baroness, Lady Gerada, I will be very pleased to review this, because I suspect there were some more points to address. I will be very pleased to write to her to give her comfort in this regard.
I move on now to the impact on doctors who were part way through the application process—a point spoken to by noble Lords, Lord Patel, Lord Mohammed, Lord Clement-Jones, and other noble Lords. As I stated earlier, delaying implementation of the Bill until next year, which would be required if we were to respond as requested, would mean another full year where we are not tackling the issue of bottlenecks in medical training. It seemed to me that the feeling in the House was that we did need to do that.
I understand the discomfort of noble Lords around this. It is important that I recognise that, but it is also important to recognise when introducing legislation that sometimes it will not work perfectly for everybody. This is about prioritisation, not about exclusion.
Following that point, the noble Lord, Lord Stevens, the noble Baroness, Lady Coffey, and the noble Earl, Lord Effingham, asked about emergency legislation. They asked: why now? As the Health Secretary set out in the other place, he has listened to resident doctors and their concerns about a system that does not work for them. He agreed to bring forward that emergency legislation as quickly as possible, rather than wait—this is key for a number of the points raised—another year to do so.
The noble Earl, Lord Howe, and the noble Baroness, Lady Coffey, asked about the Bill’s commencement and why it will not commence at Royal Assent—that is a very fair question. We are introducing reforms for a large-scale recruitment process. I know that noble Lords will understand what a major undertaking this is. We do not want to create errors or more uncertainty. To make sure that it is effective in commencement, we must have clear processes for delivery across the health system, and I am sure that all noble Lords appreciate that these elements cannot be switched on overnight. As the Secretary of State said in the other place, there is a material consideration about whether it is even possible to proceed if the strikes are ongoing. He is concerned—I share this concern, as I am sure all noble Lords do—about the disruption that strikes cause and the pressure they put on resources, which would make it so much harder operationally to deliver the measures in the Bill.
Lord Mohammed of Tinsley (LD)
I will press the point I made earlier about uncertainty. Not having a commencement date creates a lot of uncertainty for the current batch of students, who are really worried about whether they will they gain a place and, more importantly, where. I want to impress this issue on the Minister; it was raised by the Russell group medical school admissions head with me personally.
Baroness Merron (Lab)
I completely understand the point about uncertainty. Uncertainty exists in the current system, and uncertainty may transfer for different reasons. We are keen to get on with this. I am just indicating some of the circumstances—strike action—that would cause difficulty for us in terms of commencement. I hope we can proceed. I think the noble Lord will understand exactly what I am saying.
The noble Baroness, Lady Coffey, asked about the release of more granular detail. I draw noble Lords’ attention to the fact that NHS England already publishes a wide range of recruitment data, including data on country of qualification and nationality groups. It will publish further granular data when possible and monitor the implementation of the Bill, should it pass—that, for me, is the most important point. If the noble Baroness is referring to other information, she is very welcome to raise that with me.
I am of course very happy to meet with my noble friend Lord Stevenson. In general, the 10-year health plan commits to working with professional regulators and educational institutions over the next three years to overhaul education and training curricula.
To answer the question from the noble Baroness, Lady Coffey, on prioritisation, if I can put it in my language: you either are or are not prioritised. There are no tiers of priorities within priorities; it is as it is written in the Bill.
The noble Lord, Lord Mohammed, asked about the impact of prioritisation on harder-to-fill specialties. This approach will not negatively impact recruitment. In fact, it will ensure that priority groups are considered first, while keeping the door open for when we need people. I think it will help get people into the areas in which we need them, because it will direct people to where we do not have sufficient applicants.
At its heart, the Bill is about the UK-trained medical graduates on whom the NHS heavily relies. We are grateful for their skill, commitment and professionalism. It is our responsibility to ensure they are trained, supported and treated well at work. This is a more sustainable and considered approach to the allocation of medical training places. A number of noble Lords said that this is a problem that has been around for years. We are grasping the proverbial nettle. The Bill is a measured step towards the goals of clarity, fairness and opportunity. It will not, on its own, resolve everything—I am fully aware of that—but it will help us with a pressing problem. With that, I beg to move.
National Insurance Contributions (Employer Pensions Contributions) Bill
(1 day, 10 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, it is a pleasure to open this Second Reading debate on the Bill. It legislates for reforms announced in the Budget in November. That was a Budget to build a stronger, more secure economy that had at its heart three deliberate pro-growth choices. First, by choosing to maintain economic stability, getting inflation and interest rates down, we helped to give businesses the confidence to invest and our economy the room to grow. Secondly, by choosing to reject austerity, we protected £120 billion of additional investment in growth-driving infrastructure. Thirdly, by choosing to back the fast-growing companies of the future, we supported the investment, innovation and economic dynamism that will increase growth in the next decade and beyond.
But these are choices that need to be paid for. That is why the Budget contained a series of reforms to the tax system to ensure that it keeps pace with a fast-changing economy. Those reforms include changes to pension salary sacrifice, contained in the Bill we are debating today. The Government spend over £500 billion each year on various reliefs within the tax system. That is more than double the entire annual NHS budget and nearly five times the annual budget for education. The size of this spend means the Government must always keep the effectiveness and value for money of tax reliefs under review. This Bill addresses just one of these reliefs: pension salary sacrifice, the cost of which was set to treble to £8 billion a year by the end of this decade.
That increase has been driven most by higher earners, with additional-rate taxpayers tripling their salary sacrifice contributions since 2017. This includes individuals sacrificing their bonuses without paying any income tax and national insurance contributions on them. But while those on the highest salaries are most likely to take part in salary sacrifice, others are completely excluded. For example, the majority of employers do not offer salary sacrifice, including many small businesses. Groups who are most likely to be undersaving for retirement, such as those on the national minimum wage and the UK’s 4.4 million self-employed workers, are also completely excluded from using salary sacrifice.
The status quo is neither fair nor fiscally sustainable. We cannot afford to allow the cost of pension salary sacrifice to balloon, benefiting predominantly higher earners. In this, we agree with the approach taken by the previous Government. In their 2015 Summer Budget, the then Government said:
“Salary sacrifice arrangements … are becoming increasingly popular and the cost to the taxpayer is rising”.
Two years later, the previous Government introduced reforms to salary sacrifice. The Finance Act 2017 removed the tax advantages of salary sacrifice for the majority of benefits in kind—for example, living accommodation or private medical insurance. The noble Lord, Lord Hammond of Runnymede, told the other place:
“The majority of employees pay tax on a cash salary, but some are able to sacrifice salary … and pay much lower tax … That is unfair”.—[Official Report, Commons, 23/11/16; col. 907.]
The previous Government commissioned research in 2023, which included a proposal to cap pensions salary sacrifice at £2,000. This Government are now taking forward that reform to ensure that the tax system is kept on a sustainable footing.
Although some tax experts have called for pension salary sacrifice to be abolished entirely, the Government are taking a more measured and pragmatic approach. The Bill contains two main elements. First, it introduces a cap of £2,000 under which no employer and employee national insurance contributions will be charged on any pension contributions. The cap protects ordinary workers using salary sacrifice and limits the impact on employers while ensuring that the system remains fiscally sustainable. The majority of those currently using salary sacrifice will be unaffected. Indeed, 95% of those earning £30,000 or less who currently make pension contributions through salary sacrifice will be entirely unaffected. It is forecast that 87% of salary sacrifice contributions above the cap will be made by higher rate and additional rate taxpayers. Individuals can also continue to save as much as they wish into their pensions, either through salary sacrifice or outside of it, both of which will be fully relievable of income tax.
Secondly, we are introducing this change with a long implementation period so that it will come into effect in 2029-30. This gives employers and employees over three years to prepare and to adjust. I am pleased that business and industry bodies have already welcomed this lengthy implementation period. HMRC is also engaging with industry stakeholders to ensure this change operates in the most effective way. That will continue as we approach implementation.
Saving into a pension, including via salary sacrifice, will remain hugely tax advantageous under these changes. The Government currently provide over £70 billion of income tax and national insurance contributions relief on pension contributions each year. That spend will be entirely unaffected by these changes. Employees’ pension contributions, including those made via salary sacrifice, will continue to be fully relievable from income tax at the employee’s marginal rate. For example, if a basic rate taxpayer were to put £100 into their pension, it would cost them just £80 of their take-home pay, with the Government providing the remaining £20 in tax relief. For a higher rate taxpayer, that same £100 pension contribution can cost them as little as £60 because they also receive relief at their marginal rate of tax.
For employers, all pension contributions they make for their employees outside of salary sacrifice will remain exempt from both income tax and national insurance contributions. This makes pensions one of the most tax-efficient ways to invest in their workforce. For example, if an employer contributes £1,000 to an employee’s pension, this is worth £150 in forgone employer national insurance contributions.
Since the Budget in November, it has been suggested by some that these changes will negatively impact the overall level of pension saving. We do not believe this to be the case. Salary sacrifice existed in the 2000s and early 2010s, yet there were significant falls in private sector pension saving during this period. In 2012, only one in three private sector workers saved into a pension.
The key factor that has led to an increase in saving in recent years is not the complicated national insurance reliefs available to some employees, but rather automatic enrolment, introduced in 2012, which has reversed the collapse in workplace pension saving. As a result of automatic enrolment, over 22 million workers across the UK are now saving each month.
Evidence also shows that pension contributions have risen in line with regulatory requirements, not with the growth of salary sacrifice. The majority of employers reducing their tax bill by offering pension salary sacrifice did not use the savings to increase pension contributions. Overall, the Office for Budget Responsibility has made it clear in its economic and fiscal outlook that it does not expect a material impact on savings behaviour as a result of the tax changes made in the Budget.
These are fair and balanced reforms. They protect lower and middle earners, give employers many years to prepare, preserve the incentives that underpin workplace pension saving, and ensure that the tax system is kept on a sustainable footing. The Bill builds on reforms by the previous Government to the salary sacrifice system and legislates for proposals first put forward in 2023. It also forms part of a wider package of reforms to ensure that the tax system keeps pace with our fast-changing economy. As a result of these and other reforms, the Government were able to take a series of pro-growth choices at the Budget last year to maintain economic stability, to reject austerity, to protect investment and to back the fast-growing companies of the future. These are the right and responsible choices to strengthen our economy for the long term. I beg to move.
Baroness Neville-Rolfe (Con)
My Lords, this Bill is deceptively small. It runs to just four pages of text and could be easily mistaken for something minor. But its consequences for working people and for long-term pension saving in particular are serious and far-reaching. We are talking about pensions, not other benefits, which the previous Government reformed.
There is a risk that the Bill’s impact will be misunderstood or dismissed as marginal, but it is neither. In simple terms, it introduces a £2,000 annual cap on the amount of pension saving that can be made through salary sacrifice without attracting national insurance. Above that cap, pension contributions are treated as earnings for national insurance purposes. Because of the way NICs work, employees earning below £50,270 will pay national insurance at 80% on the excess; those earning above that threshold will pay 2% on the excess. That is the policy, and the question for this House is who it really affects and what behaviour it is likely to change. I thank all noble Lords for staying late and look forward to their contributions.
The Government have repeatedly argued that this measure is targeted at those they describe as high earners. Page 2 of the Explanatory Notes makes it clear that this is the Government’s intention, and the fashionable Minister, Torsten Bell, has said that the Bill “protects ordinary workers”. He implicitly recognises that, for those on low incomes, salary sacrifice is the only way to build up a significant defined contribution pension fund.
But what is immediately obvious to the pension providers, employers and experts that we have spoken to is that this is not, in practice, a measure aimed at the highest earners. It hits people squarely in the middle of the income distribution, and in some cases below it. Those saving responsibly through salary sacrifice are most affected. They include younger professionals in high-cost cities and mid-career workers trying to make up pension shortfalls, typically earning between £30,000 and £60,000 a year. Given that the average UK salary is £37,430, it is difficult to see how people earning within this distribution can be credibly described as high earners. They are ordinary working people doing exactly what successive Governments have spent decades encouraging them to do: saving responsibly for retirement.
I will give the House a concrete example. Imagine a young professional who has just graduated and taken up a job in a city—London, Bristol or Manchester—earning £45,000 a year. They decide to do the responsible thing and save seriously for retirement, contributing £5,000 a year through salary sacrifice. Under the Bill, £3,000 of that saving is treated as earnings for national insurance purposes, and that individual will be paying more national insurance, not because their income has increased but because they are trying to secure a decent pension. This represents an additional hit of £240 a year for a young working person, coming on top of student loan repayments at a ridiculously high interest rate, tax, existing national insurance contributions and the high cost of living.
This raises a question for the Minister: quite how are the Government defining a high earner? A graduate in their 20s, living in London and living on £45,000 a year—£40,000 after sacrificing £5,000 for their pension—is not a high earner: not against average income, and certainly not in the context of where they are living. So where has the Treasury decided to draw that line? Unless the definition is clearly set out, it risks becoming a flexible and politically convenient threshold, capable of being shifted over time to suit the Treasury’s needs. Without a fixed and transparent definition, no group can be confident it will not be caught by provisions targeted at high earners.
The example I gave goes to the heart of one of our core concerns with the Bill, which is that the likely behavioural response it will generate risks undermining pensions adequacy. We already know that adequacy is a serious and unresolved problem. Auto-enrolment, introduced on a cross-party basis, has been a major success in bringing people into pension saving. But even so, the statutory minimum contribution of 8% is widely accepted as insufficient to deliver a decent retirement income for many people. The system relies on employers paying over the statutory minimum for their workers to be sufficiently funded in retirement. That is not a controversial point; it is the settled consensus of the pensions world.
The IFS report, Adequacy of Future Retirement Incomes: New Evidence for Private Sector Employees, clearly makes the point that despite the success of automatic enrolment, a large minority of private sector employees are not on track for an adequate retirement income and saving has become more challenging. It found that only 57% of private sector employees saving in defined contribution pensions are projected to hit the Pensions Commission’s target replacement rates, and around one-third of savers are not projected to achieve even the minimum retirement living standard defined by the Pensions and Lifetime Savings Association
Against that backdrop, discouraging additional pension saving is exactly the wrong policy response, yet that is precisely what the Bill does. Evidence published prior to the Budget suggested that nearly 40% of workers would reduce their pension saving if the benefits of salary sacrifice were capped, and the costs and complexities of the new system will almost certainly mean that employers reduce their salary sacrifice offerings altogether. That outcome is a foreseeable consequence of the policy design set out in the Bill.
The effects of the Bill will be felt not just immediately but deeply over time. Lower saving today means lower retirement income tomorrow and greater reliance on the state in future decades. At a time when we are rightly concerned about the long-term sustainability of the public finances, it is deeply troubling to introduce a measure that reduces pension saving, thus storing up higher costs for future Governments.
It would be a mistake to pretend that the Bill bears only on savers. Employers, especially small businesses, will be hit directly by higher costs, new administrative burdens and unpalatable choices about pay and pension provision. It comes at the worst possible time. Businesses are already struggling under the cumulative weight of this Government’s economic choices—minimum wage increases, punitive business rates, an expanding national insurance burden and an economy mired in prolonged stagnation.
Under the current system, salary sacrifice arrangements are a widely used mechanism through which employers support pension saving. They reduce employer NI liabilities, simplify administration and enable employers to offer more generous pension provision without increasing headline wages. The Bill fundamentally damages that settlement.
From April 2029, employers will be liable for employer national insurance contributions at 15% on any salary-sacrificed pension contributions above £2,000. That represents a direct increase in payroll costs for any organisation with meaningful take-up of salary sacrifice arrangements.
Let us imagine an employee aged 50 with a £40,000 salary, trying to make up a potential pension income shortfall before they retire by sacrificing £5,000 per year. Their £5,000 sacrifice is due to trigger national insurance on £3,000 of that amount, costing the employer an additional £450 and the employee £240 per year.
The Office for Budget Responsibility assumes that around three-quarters of those additional costs will be passed on to employees, either through lower wages or reduced employer pension contributions. But even with these anticipated changes in behaviour, employers will still bear substantial transitional costs, ongoing compliance burdens and reputational risks associated with scaling back on pensions.
Employers will also face new administrative and reporting requirements. To administer the £2,000 cliff edge, they will be required to track and report total salary-sacrificed pension contributions through payroll systems, calculate national insurance liabilities on any excess above the cap and communicate clearly with employees about changes to their take-home pay. While the three-year window will allow many to update their payroll software, the complexity should not be underestimated, particularly for smaller employers without sophisticated payroll infrastructure or for employees with more than one job, which is common in the SME sector.
Faced with these costs and complexities, it is entirely rational for employers to withdraw salary sacrifice. The result is likely to be less flexibility, fewer incentives to save, and weaker pension provision across the workforce, making the private sector even less competitive as compared with the generous defined benefit pension provision in the public sector.
This is not mere speculation by the Opposition. The OBR’s own revenue projections already assume significant behavioural change, and evidence suggests that employers are actively reassessing their pension strategies in anticipation of the Bill, meaning that it is increasingly likely that the OBR has been overgenerous in its estimations. At a time when successive Governments have encouraged employers to play a greater role in supporting retirement adequacy, often paying above the statutory minimum, the Bill risks pushing employers in precisely the opposite direction. Higher costs, greater complexity and weaker incentives are not a recipe for stronger workplace pensions, and there could even be a backlash against the Government as individual employees find it difficult to know whether they have hit the cap.
The Government argue that this is a modest measure necessary to raise revenue of £4.8 billion—and, I note cynically, to do so by the end of the forecast period in 2029-30, which is the horizon against which the Chancellor’s fiscal rules are judged. The revenue assumptions depend heavily on people not changing their behaviour, but the evidence suggests that they will. When incentives change, behaviour changes, by both individuals and employers. When behaviour changes, revenues fall, but the damage to pensions adequacy remains. The Bill risks achieving the worst of all worlds: reducing trust in the pensions system, a cap that disincentivises pension saving by responsible individuals, an increase in future dependency on the state, and a failure to deliver the long-term fiscal benefits the Government want.
Tax is a behavioural lever—a powerful one—and should not be considered independently of other pension priorities. The Government are legislating for these changes in isolation today, at a time when the Pension Schemes Bill and the Pensions Commission are likely to transform the whole pension environment. Is this really wise? I believe this House must scrutinise this Bill, its costings and any regulations made under its powers with the greatest of care.
Lord Londesborough (CB)
My Lords, I accept that this Government, like their predecessor, have little room for manoeuvre if they are to keep within their fiscal rules at a time of sluggish growth, so I am not surprised to see them bearing down on the tax efficiencies of employer pension contributions, which the Treasury believes would generate almost £7.5 billion in tax revenue over the two financial years 2029-30 and 2030-31. Unlike with last year’s NICs Bill, with its growth-sapping and job-depressing £25-billion hike in employers’ NICs, I currently have no plans to table any amendments to this Bill—but I do have two questions for the Minister about Clause 1.
Before asking those questions, let me say that I am concerned that the Bill penalises the responsible working person who is doing the right thing, putting some money aside to fund their retirement and old age, as a pension funding crisis looms on the horizon. For greater insight into that, and the disturbing economics of our ageing society, perhaps I may recommend the latest report, Preparing for an Ageing Society, from the Economic Affairs Committee, on which I sit, as does the noble Lord, Lord Davies of Brixton. It is a sobering read because, quite simply, we are not prepared.
The first area I would like to probe concerns the forecasts for £40 million to £75 million annual losses in tax revenue in the next three years, before the Bill comes into force. I understand that those losses factor in the expected behavioural change that the noble Baroness, Lady Neville-Rolfe, correctly highlighted, but they strike me as undercooked based on what I am seeing and hearing at the coalface. I should declare that I am an adviser to, and invest in, a range of start-ups and scale-ups, a number of which, understandably, have drawn up plans for their staff to increase and front-load levels of salary sacrifice while the three-year window allows, so that both employer and employees reduce their exposure to NICs.
Of course, I accept that that is anecdotal evidence, but it strikes me that the behavioural change triggered by Clause 1 of the Bill may result in nine-figure annual reductions of tax revenues: that is, hundreds of millions, not tens of millions, as suggested by the very brief tax information and impact note. Could the Minister explain how these figures have been calculated? What are the assumptions? The Minister may be interested to hear the advice coming from a leading HR and tax consultant, whose advice to CFOs and CPOs reads as follows:
“There are still more than three years to take advantage of salary sacrifice available and, with another General Election due in 2029, the legislative landscape could change again”.
My second question concerns the rationale for setting the contributions limit at £2,000 per tax year, which, as we have just heard, will hit middle earners the hardest. As we have heard, due to the way that employee NICs work, the deductions will be 2% of the contribution over the cap for higher earners but up to 8% on the excess for people earning below £50,000. Why are we hitting this group, which includes nurses, therapists, teachers, data scientists, young professionals and entrepreneurs, so disproportionately hard? Could the Minister please explain? This has some echoes of last year, when the increases to employers’ NICs disproportionately penalised SMEs with more than three staff, employers in the lower-paid sectors and, especially, part-time workers in areas such as hospitality and retail—and look how that has worked out for job creation and employment prospects in those sectors since.
I finish with a more general point about our tax system. This Bill and last year’s Act highlight why we need to radically overhaul—that is, simplify—our horrendously complicated tax code, which is an accumulation of chopping and changing by Governments on both sides over the last 50 years or so. However, I acknowledge that that is a big subject for another day, and time is short.
Lord Davies of Brixton (Lab)
I thank my noble friend for presenting the Bill to the House. I speak as a friend of the Bill, although I suspect I will be its only friend apart from the Front Bench.
I do know something about the subject. I am a strong supporter of tax relief for pension provision—it is one of the foundations of a successful pension system—but that does not mean that we provide tax relief without limit. How much tax relief we provide is a question. You cannot logically adopt the line that every extra bit of tax relief is to be justified. The case has to be made.
I have listened to both speeches so far and read the articles in the press, and really the opposition to this change is all a bit overcooked. The total amount of tax relief granted to pension provision, occupational and contract based, is enormous, but the amount that is lost through this Bill is limited: it is marginal. It is obviously a significant amount to the individuals concerned but, looked at as an overall policy objective, the amount that is being reduced here is limited.
I have always regarded salary sacrifice as an illogical nonsense. It really makes no sense. It is a form of regulatory arbitrage and I have always thought that it was vulnerable to changes in government policy. What I had not realised, since I was active in advising members and employers, was how much it has grown in recent years. This is really the point: there was life before salary sacrifice became so popular. People still saved for their pensions and still received good pensions. The argument that this whole structure depends on salary sacrifice is nonsense.
The whole concept of salary sacrifice is based on a false dichotomy: that in some way, employer contributions are distinct from employee contributions. They might have a different label on them but they all come from the same employment package. It is fungible, to use a popular word. There is no real difference and to have one type, the employee contribution, which is subject to national insurance contributions and another form, the employer contribution, not subject to them is and always was nonsense, so I welcome this Bill.
There are practical problems to be addressed. We will have two days in Committee to look at those. Two days in Committee for what is effectively a one-clause Bill seems quite surprising, but maybe there are issues. How does it work for different periods of payment and people who have changing incomes during the year? How does it work for people with more than one job and how do we achieve confidentiality of an individual’s income from one employer rather than another?
There is also something that is a new term to me: optional remuneration arrangements—OpRAs. That appears in some way to limit the extent to which contracts can be changed. I think we will have to look at that carefully because, on the one hand, the way it is being done will lead to attempts to manoeuvre around the legislation; at the same time, we do not want it to cause problems with the jobs market. There will be behaviour change and, again, I would be interested in my noble friend’s views on how that will work.
I have run out of time. I support and welcome the Bill and I look forward to an interesting period in Committee when we will get the details right.
Lord Leigh of Hurley (Con)
My Lords, it is always a pleasure and a challenge to follow the noble Lord, Lord Davies of Brixton, but I welcome his remarks.
This is the second attempt by the Government to raise money by stealth through national insurance—first on workers, now on savers. Your Lordships will recall the disaster of the last Bill to try to do this and its wrecking effect on the UK economy, so let us have a look at these proposals and the impact they may have.
We are, of course, aware of the Government’s need for cash, not least for their out-of-control welfare bill. Spending on health and disability benefits alone is forecast to reach nearly £100 billion by 2030, and the CSJ shows that around 6.2 million full-time workers—roughly one in four—would now be financially better off on benefits than in work, when you take tax into account. It is a shame that the PM could not stand up to his Back-Bench colleagues and deliver the necessary reform on welfare. As a result, the Government are scrapping around with initiatives such as this, which will have a potentially disastrous effect on people’s desire and ability to save for their pension. It is not just the numbers; it is the message.
This Bill simply punishes people who are trying to do the right thing. We were told by Labour that it would not raise taxes on working people, so perhaps the Minister can explain how this fits in with that commitment, given that the NI will come straight out of people’s salaries, including the salaries of people who are, frankly, on quite modest incomes.
The Bill hits the regular taxpayer very hard. It follows the retrospective tax changes on pensions whereby this Government applied inheritance tax on private pensions. Needless to say, the main group of people not affected by those changes are, of course, those who work in the public sector and, in particular, the Civil Service. The Minister used the word “fair” a lot in his opening remarks, but does he not see how unfair this Bill is? While civil servants’ pensions are protected for life—and, indeed, often for their spouses—the Bill does not impact them at all. It is only those working in the private sector—typically, by the way, much more so on middle incomes than higher incomes—who get attacked by the Bill.
Why are the Government making it so much harder for private sector employers to contribute to the pensions of their employees? Does the Minister recognise that it is the private sector employee who will have to fund the unfunded £1.5 trillion liability of public sector pensions? Perhaps it is because there is so little private sector expertise on the Front Bench, with the notable exception of both Ministers sitting there tonight. The amount raised by the Bill peaks at £4.845 billion in 2029-30 but then, according to the Red Book, falls to £2.585 billion in the following year.
We are told that this is due to behavioural changes. However, I cannot find any explanation as to what this might mean. Could the Minister please elaborate: what behavioural changes? In his opening remarks, I think he referred to no changes in savings behaviour, so how is this extremely dramatic fall explained? Is it a coincidence that the amount generated peaks in 2029-30, which is the year that counts for the Chancellor’s fiscal rule and possibly the year of an election? Do the Government realise that taxpayers will feel that they are taking money out of their pockets just at that moment?
I commend to the Minister the representation from the Chartered Institute of Taxation, of which I am a qualified member. I do not have time to go through it all, but it is clear that the Bill does not explain what is meant by—as the noble Lord, Lord Davies of Brixton, mentioned—“optional remuneration arrangements”. In particular, greater clarity is needed as to which conversations between employer and employees regarding pay and pension provisions could give rise to optional remuneration arrangements.
As noble Lords may well be aware, there are two types of optional arrangements: type A, which the Bill clearly covers, and type B, which it does not. Is the Bill intended to cover type B optional payments, which new subsection (6A) sort of implies? This is a big subject and needs much more work before Committee so that we can all understand what the Government’s intentions are.
Likewise, insufficient thought has gone into how the ridiculous annual £2,000 limit would be applied to employees paid weekly or monthly and those with multiple employments. Has thought been given to the likely impact on some employees where employers might withdraw pension salary sacrifice schemes as an option? What do they do?
Finally, as the Minister knows, I am always happy to be of assistance to the Government and, in this respect, I am happy to discuss other ways of raising revenue in this area, as I have done, for example, in VAT. I would like to understand from the Minister what assessment has been made of the effect of a national insurance charge levied on self-employed and LLP partners, which seems to me to be fair and would raise substantial amounts of revenue. I do not expect an answer on that tonight. We had a debate on it in an Oral Question a few weeks ago. A noble Lord who is a KC suggested that doing so might frighten off the legal profession to other parts of the world. I am not convinced that that is a fair argument, and I would like to see the Treasury’s assessment, perhaps in writing at a later date.
In the meantime, I look forward to the answers to the questions I have raised and a detailed discussion of these issues in Committee, and I just hope the public are made aware of the real effects that the Bill will have on them.
Baroness Altmann (Non-Afl)
My Lords, first, I need to declare my interests as a non-executive director and a board adviser to pension companies. I understand the Government’s thinking, in theory, about the anomaly, as they probably call it, of national insurance relief, but in practice, this policy will have serious negative impacts. Indeed, I wonder whether it will save anything like the sums expected, as it will have damaging unintended consequences on both pensions and growth.
We seem to have a “push me, pull you” pensions policy, with the DWP setting up a Pensions Commission to review adequacy and improve pensions, while the Treasury increases tax on and the cost of employer pensions, making pensions less attractive and more expensive. This will reduce adequacy and hit growth. It will certainly reduce the take-home pay of a vast number of workers. It is, in effect, a tax on working people, as the noble Lord, Lord Leigh, has said. A rise in the cost of pension provision imposed on employers—but almost exclusively in the private sector—is surely the equivalent of a tax increase on ordinary working people.
If employers are already contributing more than the minimum, their pension costs are bound to rise because of this measure. The likelihood is that they will cut back to the minimum, making pension outcomes worse. The noble Lord, Lord Davies, doubts the scale of this impact. One of the reasons that salary sacrifices have increased so significantly since 2016 is that so many more employers have come into pensions as a result of auto-enrolment. There are hundreds of thousands more which were not there before; if they have advice they are told that it is a no-brainer to have salary sacrifice, because everybody benefits except the Treasury.
If employers are already contributing at the minimum and they cannot cut back, the likelihood is that as the cost of employment rises—because of the costs of pension provision—they will either reduce wage rises or cut employment levels. This is not some theoretical assumption, because all employers have to provide these pensions. The Government see this as impacting only high earners. As the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Londesborough, have already described, this is simply not so. It will hurt ordinary workers, especially middle earners. Reducing take-home pay and pensions will either reduce current pay, or deferred pay, or both.
I have a number of practical questions for the Minister. What happens if someone changes jobs during the year? How will the new employer know how much of the £2,000 contribution limit has been used up so far? Who is responsible for compliance, and for reporting to HMRC? Employers may need to update their pension scheme rules, member booklets, calculators, website information, staff portals, and so on. What is the Government’s estimate of the cost to business of all that? What is the estimate of the cost to employers which need to renegotiate their employment contracts for staff who agreed to a pay cut to accommodate a salary sacrifice that no longer applies? Who will cover the costs of all the increased queries that are bound to arise, including the cost of system and software updates, and member comms? How many employers will decide to abandon salary sacrifice altogether, and do the Government’s estimates of cost savings factor in the reduction in growth, and the reduction in future pensions, to offset the expected savings?
In conclusion, I hope that the Government will think again. There is plenty of time. What do the Government want from our pensions system? Do we want private pensions to improve? Do we want pension assets to support growth? If so, we need to encourage more pension contributions and incentivise holding and investing more for longer. That will not be achieved by increasing taxation on pensions or raising employer pension provision costs. These are important issues to assess in relation to the £80 billion-plus cost of tax and national insurance reliefs. They should be the subject of a holistic review in the round, rather than continuous, ongoing salami-slicing, tax by tax. This leaves workers and pensions potentially worse off and will potentially worsen the growth and living standards of the future.
Lord Ashcombe (Con)
My Lords, I wish to express deep concern about the Government’s decision to impose a £2,000 cap on salary sacrifice arrangements for pension contributions. This measure may appear technical, but its consequences for retirement saving are anything but trivial. It raises serious questions about the coherence of the Government’s approach to pension adequacy at a time when the nation can ill afford missteps.
Salary sacrifice has long been a legitimate and widely used mechanism, enabling employees to exchange part of their salary for pension contributions, benefiting from both tax and national insurance relief, as we have heard. It is not a loophole. It is not an avoidance scheme. It is a deliberate feature of the system that encourages people to save more for their retirement. By imposing this cap, the Government are restricting one of the few tools that has demonstrably helped individuals to boost their pension savings in a tax-efficient manner.
This decision comes at a time when the UK is confronting a substantial and widening retirement savings gap and when an independent commission is actively considering how best to strengthen pension adequacy. The evidence is stark. The Department for Work and Pensions acknowledged in 2025 that around 14.6 million working-age people are undersaving for retirement. The Scottish Widows Retirement Report 2025 shows that only 30% of the population is currently on track for a “comfortable retirement”, while 39% are at clear risk of falling short. Mercer—I declare my interest as an employee of their sister company Marsh—has repeatedly highlighted, most recently in 2024, the need for higher contributions if we are to close the savings gap.
Against this backdrop, it is difficult to understand how the Government can justify a policy that will, in effect, discourage additional voluntary saving. The commission’s message has been unambiguous: we must help people to save more for their later life, not place fresh obstacles in their path.
The scale of the impact is not marginal. According to the Government’s own explanatory notes, 3.3 million savers—around 44% of employees using salary sacrifice—stand to be affected. Many of these would not be considered high earners exploiting generous tax reliefs. Furthermore, there are lower and median earners who make occasional larger contributions when they can, often after life events or periods of financial stability. This cap will hit them the hardest. It risks undermining the ability of savers to build a secure retirement income at precisely the moment when demographic pressures, an ageing population and rising life expectancy make adequate saving more essential than ever.
There is a fundamental question of fairness. The pension adequacy commission is tasked with ensuring that all workers can aspire to a decent retirement income. Yet this cap risks creating a two-tier system: those who wish to save more are restricted, while those already struggling to save enough continue to face structural barriers. Rather than reducing inequalities in retirement outcomes, this measure threatens to entrench them.
The implications extend beyond individuals. Some 290,000 employers currently use salary sacrifice arrangements, benefiting from reduced employer national insurance contributions. If the cap reduces participation, employers will face higher national insurance liabilities, increasing the cost of employment. The OBR suggests that many employers will shift to ordinary pension contributions, including relief at source schemes.
Under these arrangements, employees will pay full income tax up front and reclaim it later, effectively giving the Exchequer an interest-free loan. In 2029-30, this manoeuvre raises £4.85 billion, before falling to £2.29 billion the following year when individuals reclaim the tax on the previous year. It is hard to avoid the conclusion that the Government are playing cash-flow games with workers’ retirement savings while imposing yet another cost on employers. At a time when economic growth is desperately needed, this policy risks becoming yet another drag on the very companies we rely on to invest, innovate and employ. I urge the Government to reconsider.
A pensions system must be judged by its ability to help people build security for later life. Policies that restrict saving, complicate incentives or undermine confidence run counter to that mission. If we are serious about addressing the challenges of an ageing society, then tax and national insurance policy must align with and not work against the goal of pension adequacy. The Government still have time to correct their course. I hope they will do so, in the interests of savers, employers and the long-term financial health of our country.
Lord de Clifford (CB)
My Lords, I raised the topic of today’s debate, salary sacrifice, in the Budget debate on 4 December. I am grateful to the Minister for his comments on my questions in summing up that debate. He felt that the changes to salary sacrifice pension arrangements were a proportionate measure that would mainly affect higher-rate taxpayers. I reflected on those comments. They are possibly fair, but the cost of this measure is not fair to all employees, employers and working people trying to save for pensions over their working lives.
I note my registered interest as an SME business owner and employer. For employers like my business that have benefited from NIC savings over the past 10 years, it will be another addition to our ever-increasing tax burden on employers for the privilege of employing people.
The Government have noted that there will be behavioural changes by individuals and businesses with regard to this proposed change. As set out in the explanatory notes, as many noble Lords have mentioned, NIC receipts will increase to just under £5 billion in the first year, reducing by 41% in the second. Of this reduced figure of £2.5 billion, the majority will be paid by employers. As someone who does the monthly payroll for 130 employees, of which 24 will be affected, I am aware that the extra employer NIC would mean an additional £8,500 for our business. This means that I will certainly be investigating, like other businesses, how we can pay employees’ pension contributions via other methods.
One of the benefits of auto-enrolment, as mentioned by others, is that it has encouraged more salary sacrifice to take place. Employees have found it easier to make pension contributions and additional contributions above the minimum of 5%, as it is a lot simpler to contact your employer than a pension provider, plus some employers are willing to match any additional contributions due to NIC savings. One possible outcome is that employers will make only the minimum contribution to auto-enrolment salary sacrifice schemes to avoid additional NICs, therefore creating a barrier for people to save money.
Another concern is that it is unfair on some workers. Medium earners, as my noble friend Lord Londesborough mentioned, will suffer most from this change. According to the Resolution Foundation, 75% of workers will not be affected as they do not pay salary sacrifice. Of the 25% who do, only half will be affected as their salaries are below £40,000, if pension contributions are based around 5%. Therefore, only 12.5% of workers will be affected. The highest-paid individuals—those paid over £100,000—represent 32% of the salary sacrifice contributions paid and 3% of employees, according to the Institute for Fiscal Studies. These are highly valued employees and will have the financial resources, with their employers, to look for other ways to avoid this NIC payment, for example through the optional remuneration agreements mentioned tonight, therefore reducing the tax take from higher taxpayers, which was the aim of this policy.
This change of policy will affect the medium earners of the workforce. It will be an additional stealth raid on their income and future savings. This group of earners is already being dragged into the 40% taxpayer bracket. How are aspiring members of society under 32, as my noble friend Lady Neville-Rolfe mentioned earlier, who are paying student loans at 9%, expected to buy homes, start a family and save for the future with an ever-increasing tax burden on their income?
In summary, this Bill targets employed middle earners who want to save for their future via pensions, and employers who will have to pay even more NIC. This change brings further complexity to an already complex tax system. Is it necessary? Would it not have been simpler not to bring in a change at all, as a lot of the targeted taxpayers will avoid paying this NIC, as noted by Government, or to withdraw pension payments from salary sacrifice in total, therefore making it simpler?
Baroness Maclean of Redditch (Con)
My Lords, it is a pleasure to follow the noble Lord, Lord de Clifford, who spoke about his personal experience of running a small business, which I also share.
When the Bill was introduced, the Treasury Minister in another place said:
“It is the richest who benefit from these schemes ... it is right that we make the scheme fairer for all”.—[Official Report, Commons, 17/12/25; col. 1023.]
It is a weird definition of “fair” when someone earning £45,000—a basic rate taxpayer—is penalised for saving too much for their pension.
I reject the notion that fairness means endless redistribution from those who contribute to those who do not. A truly fair society recognises that those who work hardest, take the most risk and contribute the most deserve to be rewarded, because it is their success, and the wealth they create, that make it possible to help people who genuinely need the help. You do not lift up the poor by bringing down the rich; you do not make anyone richer by arguing about slices of the pie. Your Lordships do not need me to remind the House that it was Mrs Thatcher who said that. This progressive instinct—to take ever more from those who contribute and redistribute it endlessly—is yet another thing that sounds compassionate but is the opposite.
However, it is not just on values that I differ from the Government. I also differ from them in the practical outcomes. It actually would not matter if we had different values if the evidence showed that their policy was going to be successful and help people and society; but, as we have heard from all across the Chamber, these policies are not successful: they are economically illiterate and self-defeating. You just cannot tax your way to prosperity. Societies around the globe have tried it over and over again and it never works.
Your Lordships should consider this: the top 1% of earners in the country pay approximately 29% of all income tax. The top 10% pay roughly 60%. These are not bad, greedy or selfish people. They are working damn hard and are carrying the entire system on their backs. And what is their reward? To be told they are not paying their “fair share”. To face ever-higher taxes. To see their pension arrangements restricted, and to be demonised while people who choose not to work or who have only recently arrived in this country and never paid in, get benefits paid for by these very taxpayers.
The Government have claimed that this measure targets higher earners who benefit disproportionately from salary sacrifice, but that is just not the case, as we have heard in many other remarks. The Chartered Institute of Taxation found that limiting salary sacrifice will affect basic rate taxpayers more, pound for pound, than higher and additional rate taxpayers. Moreover, this change is likely to cause some employers to withdraw pension salary sacrifice as an option.
I started my business with my husband in a small flat above a former garage in Acocks Green, which is a suburb in inner-city Birmingham. We could not compete with large employers—established large companies—for the kinds of graduates we were trying to hire. We barely even had a flushing toilet in the first years we were starting, so we had to offer something to get people to actually come and work for us. We were able to offer salary sacrifice and pensions: that was one thing that we could do. We could not offer any other fancy perks, but at least we could offer that, and we knew that we were doing the right thing for people.
It is not surprising, unfortunately, that the Government take this approach, because—with a couple of honourable exceptions sitting here tonight—barely anybody in the Government has actually ever started a business or knows what it is like or has even worked in the private sector. Unfortunately, the Treasury’s own figures show that approximately 85,000 basic rate taxpayers will be affected by this. These could be people earning about £45,000 after 20 years in the workforce. The Treasury Minister talks about the rich, but these are not millionaires or billionaires: they are not Elon Musk. They are people who have just worked very hard in ordinary jobs for 20 or 30 years. They are the backbone of our country. They are saving for the future and they do not ask anything from the state. Yet their taxes are going up on absolutely everything and they do not get any of the benefits available to people on lower incomes. They cannot use those benefits and they do not use those services.
This is another restriction on these people’s ability to save, while the Government are subsidising many others who make lifestyle choices not to work and have unlimited numbers of children, while claiming benefits and not working. We are seeing that balloon now, with the two-child benefit cap going. We are providing housing and support for record numbers of illegal migrants at taxpayers’ expense. This is the absolute madness of this system now. The Bill is yet another punch in the guts for exactly the kind of country that we want to encourage and the people who keep this country going.
The Department for Work and Pensions estimates that two-fifths of people are not on track to achieve their retirement incomes, so the solution is to encourage more saving. I am out of time, but can the Government please look at amendments to protect basic rate taxpayers, index the threshold to inflation and require comprehensive review before implementation?
Lord Fuller (Con)
My Lords, it is not just a capitalist economy that runs on incentives; it is human nature to calibrate actions through the lens of what is in it for us. Encouraging people to work hard, succeed, earn their place in the world, and deliver safety and security for themselves and their families, while generating the taxes that sustain public services, is the right thing. But get that balance wrong by destroying the incentives to do the right thing, or set tax rates too high, and that leads to no tax at all. It is the Laffer curve in action, and Britain is being subjected to a whole-economy experiment on the Laffer curve. At every level, incentives to advance in the UK are being weakened, just as incentives in other countries become more attractive.
Behaviours do change. A close school friend and a substantial British taxpayer has just gone to live in Dubai. Someone in my electoral ward is buying a ranch in Montana, and expensively trained newly qualified doctors and nurses are moving to Australia. Our problem is so bad that, earlier this evening in your Lordships’ House, we had an emergency debate on emergency legislation.
What is the effect of this Bill on those who are left behind? First, it creates a glass ceiling on aspiration—on salaries approaching £100,000. But, as we have heard this evening, it is not just those salaries but middle-class professions that are affected, such as those found in the other place, and mechanics, timber merchants, solicitors and accountants—a whole raft of middle-class aspirational professions.
I am sure the Minister will talk about those with the broadest shoulders, but I will give the example of my daughter’s boyfriend, who works in the West End. He was so proud to come and tell us he had been awarded a £17,000 bonus from his business for having worked so hard and become so valuable to his firm, but I was astonished when he told us that he got to keep only just over £6,000 of that tidy sum. He is paying not 60% but nearly 70% because of the student loan. Why did he bother to work so hard? He has the broadest shoulders only in the sense that he plays rugby at the weekend, but he is no fat cat. He is 28 and at the start of his career. He lives in a flatshare with people he does not know in Brixton—perhaps the noble Lord, Lord Davies, could go round and knock on his door. He is just a young man working hard for long hours, trying to save for a deposit to climb the ladder and better himself.
But at least that option or incentive has been opened to my daughter’s boyfriend to sacrifice some of that bonus to salt away some money into his pension, well over 30 years away, so that one day he might be able to reduce his reliance on the state—and, yes, perhaps look after my daughter—but that option will be slammed shut by this Bill. Earning £17,000 to get around £6,000; that is not right. I say to the noble Lord, Lord Davies: that is what has been overcooked. How much more can the man be expected to give for having worked so hard? Of course, let us not forget his company, which will have had to chip in another £2,500 in its own NIC. It is not right for him, it is not right to drive the brightest and best overseas, and it is not right for our economy or the Exchequer in the long term.
I know that salary sacrifice is not for everyone, but it is for many. As we have heard, it incentivises people who are doing well at the start of their career to invest in themselves, with a second long-term return for the state by reducing their reliance on the taxpayer in later years—both the individual and the state co-investing in our collective future.
We know that limiting salary sacrifice will affect basic rate taxpayers more, pound for pound, than higher rate taxpayers, although I accept that the sums are larger for the higher earners. We have heard, and I confirm, that employers will withdraw pension salary sacrifice as an option altogether. It is going to complicate pensions and HR in companies that are already burdened with extra costs and onerous duties, and will potentially encourage undesirable optional remuneration agreements and avoidance schemes. Further, we will see few practical details around how that £2,000 limit will be applied to weekly and monthly paid employees, and those with multiple years.
Taken together, this Bill is just another example of bureaucratic, counterproductive, anti-growth, incentive-sapping policies: more taxes on employment, inexplicable investment-sapping taxes on private rather than public businesses, existential taxes on pubs, crippling carbon taxes on our heavy industries, discriminatory taxes on private, not public, pensions and—astonishingly—even new taxes on tomatoes that will disproportionately affect those with the smallest means. Now, with this Bill, there are new taxes to discourage people from doing the right thing. This insanity will impoverish us all and the Minister is creating a fresh black hole in his name. The Government will drive tax revenues down into the dirt and impoverish our nation.
Baroness Kramer (LD)
My Lords, I do not enjoy the same pension expertise as virtually every other speaker tonight; I also do not think, ideologically, that I fit well with the last two speakers, who take a position that is different from mine. However, even I can see that this Bill is another example of the Treasury’s inability to align taxes with its stated economic and industrial goals, including its plans for growth. I note the points made by the noble Baroness, Lady Altmann, and the noble Lord, Lord Ashcombe, that you have one department trying to encourage people to increase their savings and pensions because of pension inadequacy—“push me, pull you” as the noble Baroness described it—and then the Treasury working, it seems, in completely the opposite direction.
On that general growth objective, I guarantee to the Government that capping salary sacrifice NICs exemptions will not add a single penny to the amount that working people save and invest. Yet savings and investments are the key drivers of the prosperity we seek. Some 3.3 million people, which is 44% of those who save through salary sacrifice, will be hit by this change.
Others have made this point, but I particularly noticed that the recent report from the Pensions Policy Institute warned in the strongest terms that people are not sufficiently building their pension during their higher earning years, which is exactly when salary sacrifice comes into play. For many people—this probably particularly affects women who take time out for childcare—higher earnings are typically for only a period of someone’s working life. Therefore, it is during that period that they need to be able to put aside that money for later life and pensions. This capping change works exactly in the opposite direction of letting them push down on the accelerator during that relatively limited period of higher earnings, when they can set money aside.
We are not talking about multi-millionaires, as people have said; this is about incentivising millions of ordinary people to put more aside during those years when their income is just sufficient to allow them to do so. I regret that the Government, rather than encouraging that approach through this Bill, are now discouraging it.
For individual workers, this change comes in the context of frozen income tax thresholds, as well as eye-watering increases in the cost of living. Many who diligently choose to live more frugally and save through pensions have already faced the changes in inheritance tax, and now they have this. The two have to be seen together as changing the psychology of many who are trying to make a decision about what to do with their money. Many will now reduce their saving for old age. How anyone thinks this will help with the demands on or the cost of social care—two of the biggest burdens that we carry as taxpayers—I simply do not know.
For businesses, especially small businesses—the noble Baroness, Lady Maclean, spoke as a living example of someone with a small business, as is the noble Lord, Lord de Clifford—this is just another tax rise at a time when so many other costs have been thrown on to businesses. We debated business rate changes just last week.
While larger businesses may find other ways to help their employees—it has certainly been clear from some of our speakers that there are mechanisms that they can turn to—most small businesses do not have that capacity. The cost of both employee and employer NICs, especially in small businesses, tends to fall on the workers in the end. It creates a real differential between being employed by a big firm or a small one. The Federation of Small Businesses has looked at this Bill and warned of the impact on staff retention. I just wonder: does no one in the Treasury understand that an expanding small business sector is the backbone of the economy, our major source of new jobs, the underpinning of communities and the birthing ground for key industries of the future?
Then we have the investment impact of curtailing pension savings. Only yesterday, in Committee on the Pension Schemes Bill, we were dealing with the Government's concern to direct pension savings into investment in the UK economy, from private equity into infrastructure—absolutely core and key to their growth agenda. How on earth does this Bill help that? In fact, how does it not hinder it? The Mansion House Accord, on which so much of the Pension Schemes Bill rests, applies only to a small part of the pension world: auto-enrolment by low earners. If the Government are seriously looking for a step change in investment into the UK economy and into the riskier parts of the UK economy, it is exactly the money that goes into salary sacrifice schemes that they require to undertake those kinds of ventures.
The noble Lord, Lord Londesborough, talked about the timing of the Bill and the potential for front-loading salary sacrifice schemes over the next few years. That is a point that the Government need to address. The timing of when this comes in is truly weird. I cannot work out whether the change that takes place in 2029 is essentially an actual change or an attempt to game the fiscal rules. We are past the point where any of us want to accept the gaming of fiscal rules anymore. We know what it did under the last Government, and we do not want to see it repeated here.
I give way to others who talked about the practical impacts: what do you do with someone who changes jobs? How do you deal with the paperwork and the systems? I am very conscious that those things that get brushed aside often turn out to be huge stumbling blocks. We need to hear more from the Government on that.
The prize for any Government when it comes to pensions is to get people to save in their times of higher earnings as much as they reasonably can. That is what reduces demand on the taxpayer for social care and benefits in old age. Frankly, with our ageing population, it is increasingly vital, not less vital. This Bill simply pushes in the opposite direction. We need to address that through serious amendment.
Lord Altrincham (Con)
I thank the Minister for leading this debate and for his customary courtesy in listening to all the observations of noble Lords. There is a common observation that there is nothing new in tax. Maybe this Bill is a small Bill; the noble Lord, Lord Davies, says it is a trivial matter that does not really need our scrutiny. Nevertheless, it is a moment in taxation when we are taxing savings—
Lord Davies of Brixton (Lab)
I actually said that I was looking forward to discussing it further in Committee. It certainly does require our attention.
Lord Altrincham (Con)
I stand corrected.
This is a moment in taxation when we move towards taxing savings. It is against a backdrop in which policy has been relatively settled in this area in recent years. There was an understanding that we need to provide private sector pensions. Quite broadly, there was cross-party support for auto-enrolment; it has been quite successful. Against this background of a degree of consensus, we are now introducing—in a small but nevertheless important way—the taxation of savings. We made the changes towards auto-enrolment not just for social benefit reasons but to protect the state. It is important to remember that we are doing this also because the liability for retirement is falling on the state, and it became urgent to do something about this and to make sure that there was private provision to offset this rising cost.
With this Bill, we find ourselves at a moment when the tax system begins to eat itself. It would be illusory to suggest that there will be any gains from taxing savings, because the liability that will accrue to the state will likely be greater. That is because the returns to invested pensions over time will, in almost all cases, exceed the growth of the state, as the noble Lord, Lord Davies, knows from his time in pensions, and it is the growth of the state that provides the tax income that can support people. So the gap will be very wide if people do not save in private sector pensions.
That is the unfunded liability that stands behind this tax change. That liability could be very wide for the cohorts who are affected by this: middle-income earners who might have 30 more years of saving. Quite small amounts accumulating over 30 years can make an enormous difference to their retirement: it is enormously important. But, in the absence of those savings, regrettably, the state will be exposed. Therefore, the Government need to tread very carefully when making these changes, because the credit of the Government rests on securing some stability to future liabilities. Growth in this area of future liability is extremely important for investors in our bond market, and we need to make sure that they do not feel that there is a rebalancing here towards current taxation income against liabilities in the future.
I turn to the themes that have been raised so far, starting with fairness. As my noble friend Lady Neville-Rolfe explained, the Bill is, in practice, aimed not at higher earners but at earners around the middle of the income distribution. Among this group will be a large number of younger workers, already taxed quite heavily, and among them graduates required to repay the student loan. This initiative is a quite specific transfer from the young to the old. These groups are being encouraged to behave responsibly—as the noble Lord, Lord Londesborough, mentioned—and to put aside savings.
For employees, the Bill raises fundamental questions of fairness and coherence. Two individuals may arrive at precisely the same level of pension saving yet be treated very differently for national insurance purposes, depending solely on how that saving is structured. Direct employer contributions remain exempt, while salary-sacrificed contributions above the threshold do not. This difference undermines neutrality in the tax system and distorts incentives away from arrangements that many workers actively rely on to manage affordability and long-term planning.
Quite a few noble Lords mentioned complexity. We should also consider the burden on employers, particularly those operating within tight margins and employing large workforces. Professional advisers in the pensions and benefits sector have warned that increased payroll costs and added administrative complexity may prompt businesses to reconsider pension enhancements and lead to a contraction of workplace pension ambition itself. That was mentioned by my noble friend Lady Altmann.
Businesses that have structured remuneration packages in good faith around existing rules now face not only higher contribution costs but a new layer of administrative complexity. The introduction of a £2,000 cliff edge creates a compliance burden that is wholly disproportionate to the revenue that it is said to raise. For many firms, this is a material increase in payroll expenditure. There is good evidence that employer costs could account for a substantial share of the projected yield.
We have already seen the dampening effect of recent national insurance increases on recruitment and wage growth. To compound that pressure risks discouraging the forms of workplace pension generosity that public policy has long sought to encourage.
The distributional effects further complicate matters. For those earning above the higher earnings threshold, portions of what is, in essence, deferred income are drawn back into the national insurance net at marginal rates aligned with current earnings. The result is a reclassification of pension saving itself. Contributions made today attract national insurance, while withdrawals in retirement continue to attract income tax. Although these are different fiscal instruments, the policy makes pension saving resemble present consumption rather than deferred provision, creating the perception and often the reality of taxation both on entry and exit. This matters because the architecture of pension policy rests upon encouraging individuals to defer consumption, to assume responsibility for the later years. The messaging around this is sensitive, as my noble friend Lord Leigh mentioned.
The Government keep changing pension policy, so we might expect taxpayers to become better at adjusting behaviour. In this case, we have heard that some employers are encouraging employees to increase salary sacrifice now, which will of course reduce tax receipts in the short term and may reduce student loan repayments. The younger cohorts have learned to adjust their student loan repayments using the salary sacrifice scheme. Taxpayers may be hoping for a policy change later and would be rational in expecting some adjustment here, particularly for graduates. Given this uncertainty, we are asking for an independent assessment of the policy.
We have already witnessed the economic cost of uncertainty generated by repeated speculation and late clarification in fiscal policy. To proceed now with a measure that introduces fresh complexity and perceived inequity risks compounding that loss of confidence at precisely the moment long-term saving most requires reassurance.
Lord Livermore (Lab)
My Lords, it is a pleasure to close this Second Reading debate. I am grateful to all noble Lords for their expertise, their contributions and questions, particularly at this late hour.
The Bill before your Lordships’ House legislates for reforms announced in the Budget last November. It was a Budget to build a stronger, more secure economy that had at its heart three deliberate pro-growth choices: to maintain economic stability, to protect £120 billion of additional investment in growth-driving infrastructure, and to back the fast-growing companies of the future, but, as I have said previously, these choices need to be paid for. That is why the Budget contained a series of reforms to the tax system to ensure it keeps pace with a fast-changing economy. Those reforms include the changes that we are debating today.
As several noble Lords mentioned this evening, the Government spend over £500 billion each year on tax relief. The size of this spend means they must always keep the effectiveness and value for money of tax reliefs under review. This Bill addresses just one of these reliefs, pension salary sacrifice. The cost of that was set to treble to £8 billion a year between 2017 and the end of this decade. That growth has been fastest among higher earners, with additional rate taxpayers tripling their salary sacrifice contributions since 2017. But while those on the higher salaries are most likely to take part in salary sacrifice, others are completely excluded. For example, the majority of employers do not offer salary sacrifice, including many small businesses. Groups who are most likely to be undersaving for retirement, such as those on the national minimum wage and the UK’s 4.4 million self-employed workers, are also completely excluded from using salary sacrifice. The status quo is therefore neither fair nor fiscally sustainable. We simply cannot afford to allow the cost of pension salary sacrifice to balloon, benefiting predominantly higher earners.
The Bill therefore contains two main elements: first, to introduce a cap of £2,000 under which no employer and employee national insurance contributions will be charged on any pension contributions. Some 95% of those currently making pension contributions to salary sacrifice earning £30,000 or less will be entirely unaffected. Secondly, we are introducing this change with a long implementation period so that it comes into effect only in 2029-30. This gives employers and employees over three years to prepare and adjust.
The noble Lord, Lord Leigh of Hurley, asked about the Government’s commitment not to increase taxes on working people. As he knows, the Budget in November kept our manifesto promise not to increase income tax, national insurance or VAT. It contained a series of reforms to the tax system to ensure it keeps pace with our fast-changing economy. The cost of pension salary sacrifice was set nearly to triple to £8 billion between 2017 and the end of the decade—as I said before, benefiting mainly higher earners.
The noble Baroness, Lady Neville-Rolfe, spoke extensively about the impact on employers. The Government are taking a pragmatic, balanced approach by introducing a cap which protects ordinary workers and limits the impact on employers while ensuring that the system remains fiscally sustainable. The majority of employers—some 61%—do not offer this kind of salary sacrifice arrangement. Of the employers which do, most sectors, including retail, hospitality and leisure, have salary sacrifice contributions well below the £2,000 cap and are largely protected. Everyone using salary sacrifice will still benefit from the tax advantages available up to the £2,000 cap, this includes employers, which can make up to £300 of employer national insurance contribution savings through salary sacrifice per employee. These changes will not be implemented for over three years. In comparison, the previous Government gave just one year’s notice from announcing their changes to salary sacrifice in 2016 to implementing them from 2017.
The noble Baroness, Lady Neville-Rolfe, also spoke about employers potentially stopping offering salary sacrifice schemes. The Government do not expect significant numbers of employers to stop offering salary sacrifice arrangements. Everyone using salary sacrifice will still benefit from the tax advantages available up to the £2,000 cap.
The noble Baroness, Lady Altmann, asked about the cost to employers. The majority of employers do not offer salary sacrifice arrangements, and most sectors, including retail, hospitality and leisure, have salary sacrifice arrangements well below the cap. Everyone using salary sacrifice can still benefit from up to £300 employer national insurance contribution relief under the cap, and the full national insurance contributions relief is available on employer pension contributions outside of salary sacrifice. The Government are working closely with employers and the payroll industry to operationalise the change in the most effective way.
The noble Baronesses, Lady Neville-Rolfe and Lady Kramer, and the noble Lord, Lord de Clifford, spoke about the impact on small businesses. Small businesses are far less likely than larger businesses to offer pension salary sacrifice. Only 10% of employees in SMEs have pension contributions through salary sacrifice exceeding the cap, compared with 18% of employees in larger firms. The noble Baroness, Lady Neville-Rolfe, also spoke about the impact on retail, hospitality and leisure businesses. As I have said already, most firms in this sector have salary sacrifice contributions well below the £2,000 cap and are therefore largely protected.
The noble Lords, Lord Londesborough and Lord de Clifford, spoke about the impact on low earners. Higher earners are most likely to be using salary sacrifice and the majority of those currently using salary sacrifice will be unaffected by the changes. The Bill impacts only employees who use salary sacrifice to make pension contributions, which is around 35% of employees. Those earning at or near the national living wage cannot use salary sacrifice at all. The noble Lord, Lord Londesborough, also asked about basic rate taxpayers. The £2,000 cap is worth up to £160 a year for basic rate taxpayers. Those earning below £30,000 making pension contributions through salary sacrifice are overwhelmingly protected, with only 5% making pension contributions above the cap.
The noble Baroness, Lady Neville-Rolfe, asked about individuals earning around the £50,000 mark. The Government are taking a pragmatic, balanced approach by introducing a cap which protects ordinary workers and limits the impact on employers, while ensuring that the system remains fiscally sustainable. Everyone can still save up to £2,000 via salary sacrifice free of national insurance contributions. Amounts sacrificed above £2,000 will continue to be fully relievable from income tax, but we must continue to ensure that the £500 billion of tax reliefs provided each year are effective and provide value for money.
The noble Lord, Lord Leigh of Hurley, asked about the profile of the costings, also mentioned by the noble Lord, Lord Ashcombe. The costings reflect independent OBR scrutiny and use the best available data on current salary sacrifice and bonus sacrifice behaviour. Employees will respond to the changes in a number of ways. One way is that many employees will switch to making ordinary pension contributions, some of which will be to relief at source schemes. Where an employee contributes to a relief at source scheme, they will initially pay higher rate and additional rate income tax on their pension contributions and then reclaim this through their self-assessment tax return in the next year. This creates a temporary timing effect. Beyond the forecast period, this effect becomes very small.
The noble Baroness, Lady Maclean of Redditch, asked about indexing the £2,000 cap. The Government have no plans to index the cap, but we will keep the £2,000 level under review to ensure that it continues to meet its objectives and remains fair across the labour market. This is consistent with the approach to other pension tax reliefs, including the annual allowance.
The noble Baroness, Lady Altmann, and the noble Lord, Lord Londesborough, asked about the costings of this policy and about the savings generated from this change. The costings for this policy have been scrutinised and certified by the Office for Budget Responsibility in its economic and fiscal outlook. They already account for changes in employer behaviour, including employers providing higher employer pension contributions to replicate the national insurance contribution benefits of salary sacrifice. We remain confident of these costings.
The noble Baronesses, Lady Neville-Rolfe and Lady Kramer, and the noble Lord, Lord Leigh of Hurley, suggested that this was designed only to meet the fiscal rules in 2029-30. The reality is that the Government are giving employers sufficient time to prepare and adjust their systems by implementing the changes from April 2029. That is over three years’ notice before the changes take effect. We are also engaging with employers, payroll administrators and other stakeholders on the administration of the cap to provide certainty ahead of implementation.
On that specific point, also raised by the noble Baronesses, Lady Neville-Rolfe and Lady Altmann, and the noble Lords, Lord Leigh of Hurley and Lord Fuller, about the administration of this policy, HMRC is engaging with a wide range of stakeholders in the payroll, employer and software developer industries to work through exactly how the cap will be implemented. This will be vital to ensuring it is implemented in the least burdensome way possible for employers. Engagement will also help inform the secondary legislation, in which the detail of the operability will be set out and further consulted on.
My noble friend Lord Davies of Brixton spoke about how salary sacrifice is just one part of the pension landscape, and I say that to the noble Baroness, Lady Neville-Rolfe, who did not mention during her contribution that saving into a pension, including via salary sacrifice, will remain hugely tax advantageous even under these changes. The Government currently provide over £70 billion of income tax and national insurance contribution relief on pension contributions each year. That spend will be entirely unaffected by these changes. Employees’ pension contributions, including those made via salary sacrifice, will continue to be fully relievable from income tax at the employee’s marginal rate. For employers, all pension contributions remain exempt from both income tax and national insurance contributions. This makes pensions one of the most tax-efficient ways to invest in their workforce.
The noble Baronesses, Lady Neville-Rolfe, Lady Altmann and Lady Kramer, spoke about the impact on pension savings. The Government do not believe that these changes will negatively impact the overall level of pension saving. Salary sacrifice existed in the 2000s and early 2010s, yet there were significant falls in private sector pension savings during this period. In 2012, only one in three private sector workers saved into a pension.
As I said in my opening, the key factor that led to an increase in saving in recent years is not the complicated national insurance reliefs available to some employees but rather automatic enrolment, which the noble Baroness, Lady Neville-Rolfe, spoke about, and which has reversed the collapse in workplace pension savings. As a result of automatic enrolment, over 22 million workers across the UK are now saving each month. The Office for Budget Responsibility has also made it clear in its economic and fiscal outlook that it does not expect a material impact on savings behaviour as a result of the tax changes made in the Budget.
The noble Baronesses, Lady Altmann and Lady Kramer, spoke about the impact on individuals who are currently undersaving. The groups that we know are undersaving for their pension, including low earners, women and the self-employed, are the least likely to use salary sacrifice. Workers on the national living wage are excluded entirely from salary sacrifice, and so are the 4.4 million self-employed people across the UK. By contrast, these changes overwhelmingly affect higher and additional rate taxpayers. In 2030, 87% of affected salary sacrifice pension contributions made from earnings will be from higher and additional rate taxpayers.
The noble Baroness, Lady Altmann, also mentioned the Pensions Commission. There is cross-party agreement on the importance of the work of the Pensions Commission as it examines questions of adequacy and fairness. The Government will not prejudge the commission’s work.
The Budget in November contained pro-growth choices to maintain economic stability, reject austerity, protect investment and back the fast-growing companies of the future, but these are choices which need to be paid for. That is why this Bill reforms pension salary sacrifice to ensure that our tax system is kept on a sustainable footing. The Bill protects lower and middle earners, gives employers many years to prepare, and preserves the incentives that underpin workplace saving. These are fair and balanced reforms. They build on the steps already taken by the previous Government to reform salary sacrifice and strengthen our economy for the long term. I beg to move.