Financial Services and Markets Bill [HL]

Lord Ashcombe Excerpts

Committee stage
Wednesday 8th July 2026 Grand Committee

Without certainty, the UK will continue to lose market share to jurisdictions that provide it and our growth agenda will continue to be hampered by a clearance culture that is no longer fit for purpose. This amendment would provide a practical and proportionate way forward. It would ensure that genuine risk transfer vehicles are treated consistently and predictably and that the UK can finally compete in a market that it should have led. I beg to move.

[Lord Ashcombe (Con)]

My Lords, I remind the House of my interest as an employee of Marsh, an FCA-regulated firm. I wish to speak in support of this amendment in the name of the noble Baroness, Lady Bowles, but before doing so, I would like to pick up briefly on something I said earlier this week about regulatory clarity. I talked about how firms need clear definitions so that they can plan investment with confidence. That principle matters across the Bill, for not just client definitions, but for how we approach emerging markets and new structures.

Amendment 162 is a good example of that. The amendment addresses tax clarity on insurance-linked securities. These are important instruments. They attract capital into insurance, help firms manage catastrophic risk and have become a serious part of global risk management practice. Since being created in the 1990s, the global market has grown to about £136 billion, making up close to 20% of the insurance/reinsurance industry. According to Swiss Re, one of the world’s leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, 2025 was the busiest year in its history of this market.

The London insurance market is phenomenally well placed to lead here. We are larger than our five closest competitors combined. However, we need to be honest: our ILS regime has been somewhat underwhelming at best. That is not because we lack expertise or capital—we do not—but because the regulatory approach has been disproportionate and the legislation inflexible. Firms simply cannot transact deals here as efficiently as they can in Bermuda or other jurisdictions.

To the Government and the PRA’s credit, they have listened. This Bill moves us in the right direction: it gives the PRA flexibility on fully funded definitions, allows multiple contracts in protected cell companies and there is a consultation pipeline on further simplification. That is good. However, there is one thing that the Bill has not addressed, and, as mentioned by the noble Baroness, Lady Bowles, that is tax clarity. When the ILS regime was created in 2017, there was a broad anti-avoidance clause. That is fair enough, but a decade on, I think that HMRC and the Treasury should be comfortable that these are not tax avoidance structures, but are risk transfer vehicles.

Right now, firms have guidance from HMRC, but it is not legally binding. Therefore, every transaction requires a tax lawyer’s opinion every single time, as the noble Baroness mentioned. That cost, that time, that friction is the difference between doing a deal and doing it somewhere else. This amendment asks for something straightforward: a clear and legally underpinned directive that HMRC will presume that ILS vehicles are not being used to secure a tax advantage. That is not asking for exemption from anti-avoidance rules; it is asking for clarity so that legitimate risk transfer does not get caught up in unnecessary caution. That clarity matters because it removes the last barrier to this market. We have the regulation sorted and we have the expertise; what we really need is tax certainty.

This is about positioning London correctly in a competitive global market. It is about letting the PRA’s sensible reforms work, and it is about giving firms the clarity they need to invest with confidence in the United Kingdom.

[Lord Altrincham (Con)]

My Lords, I will speak to Amendment 162 in the name of the noble Baroness, Lady Bowles—perhaps from the Liberal Democrat risk-transfer derivative desk. This amendment raises what seems to be a sensible and practical point about certainty in the treatment of insurance-linked securities and related risk-transformation arrangements. Insurance-linked securities can play an important role in allowing insurance risk to be transferred into capital markets. Catastrophe bonds and similar structures can help insurers and reinsurers manage exposure to major risks, including natural catastrophes, while providing investors with a different form of capital markets instrument.

The United Kingdom has quite rightly sought to develop itself as a competitive centre for these structures, but for that to happen, firms and investors need clarity, as my noble friend just explained. As I understand it, the amendment would require the Treasury, after consulting HMRC, to publish guidance clarifying the tax treatment of these arrangements. It would also provide that where an arrangement falls within that guidance and complies with the relevant regulatory authorisation and supervision requirements, it should be treated as a bona fide commercial insurance and capital markets transaction, rather than as one entered into for tax avoidance purposes. It does not appear to be an attempt to protect fraud, misrepresentation or non-disclosure. HMRC would still be able to challenge arrangements where the conditions are not met or where there has been improper conduct, but it would give legitimate market participants greater certainty where they are using properly regulated structures for genuine commercial purposes. That certainty matters: if the UK wants to attract insurance-linked securities business, investors and firms need to understand the tax position in advance. Uncertainty can deter activity, reduce confidence and make other jurisdictions more attractive.

I would therefore welcome clarity from the Minister on this point. Do the Government accept that greater tax certainty would help to support the development of the UK insurance-linked securities market? Are they aware of the concerns that uncertainty about HMRC treatment may be limiting the attractiveness of the UK regime? Will they consider whether further Treasury or HMRC guidance is needed to ensure that properly regulated ILS vehicles are treated consistently as genuine commercial arrangements. This seems to me to be a practical amendment aimed at supporting competitiveness and certainty in a specialist but important part of the financial services market. I look forward to the Minister’s response.

National Insurance Contributions (Employer Pensions Contributions) Bill

Lord Ashcombe Excerpts

Report stage
Thursday 5th March 2026 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I will speak to my amendment in this first group. Needless to say, I agree with everything my noble friend Lady Neville-Rolfe said from the Front Bench. This Bill is a most unfortunate Bill. It clearly has come about because the Chancellor has said to her officials, “I need £5 billion, can you find it now?”, and out of the bottom drawer has come a Bill which has been rejected by so many others. I do not think it was in the manifesto; it is just an opportunistic grab of people’s savings.

The Bill has most unfortunate side effects. As we will show in later amendments, it will not raise the £5 billion that the OBR has been led to believe it will. It will fall far short of that. Proof of that, of course, is in the fact that even the OBR recognises that that £5 billion will fall by half the following year, as people work out what is going on and take evasive action. The reason it will not raise £5 billion is that people will work out, well in advance of it coming into 2029, that there are simple ways round this Bill that already have been identified, and therefore will take pre-emptive action. We are stuck with a Bill that does not work, is not needed and, workers having been penalised by the national insurance increase, penalises savers. In particular, for some bizarre reason, it penalises students who have taken out loans. This is not a good time to be making these proposals.

The Minister, a few minutes ago, suggested that the Chancellor believes that people will be £1,000 a year better off by the time of the next election. Will they really? The Joseph Rowntree Foundation—no friends of mine—has said that when housing costs from rent and mortgage payments were factored into those figures, total disposable income would have risen by just £40 a year. No pandemic to rely on, no Brexit, no nothing—that is just what it is: £40 a year.

This is not the time to impose further hardship on people, in particular students. One benefit of a pension salary sacrifice can be to reduce earnings liable to national insurance for student loan repayment purposes, as the liability to repay student loans is, for employees, based on their earnings liable to national insurance. Frankly, there remains a lack of clarity about how the policy interacts with student loan repayment calculations, which are based on national insurance definitions of earnings. If salary sacrifice pension contributions above the cap are treated as earnings for NIC purposes, this will have knock-on effects for graduate repayment levels. It will mean higher effective repayments for some borrowers, reduced disposable income and a further distortion of incentives around pension savings. The Government have not yet provided sufficient clarity. My amendments seek to address that situation.

I am grateful to the national press, in particular the Times, for its support of this amendment. I hope later to be able to test the opinion of the House on it, unless the Government feel inclined to agree to it.

[Lord Ashcombe (Con)]

My Lords, this is a very large group with a number of issues to address. First, I support my noble friends Lady Neville-Rolfe and Lord Altrincham in Amendment 1 in this group. I remind the House that the Department for Work and Pensions has acknowledged that, as of 2025, around 14.6 million working-age people are undersaving for retirement. Many of these individuals will be basic rate taxpayers, though certainly not all, and some will not have access to salary sacrifice arrangements. This amendment would ensure that only higher taxpayers are affected by the proposed £2,000 cap on salary sacrifice schemes. As a result, no basic rate taxpayer would be drawn into what might only be described as a new trap.

In Committee, the noble Lord stated more than once that 74% of employees who pay only the basic rate of tax—currently applicable up to £50,270—and who benefit from a salary sacrifice scheme would be unaffected by the £2,000 limit before the national insurance becomes payable. However, this necessarily means that 26% would be affected, and no figure has been provided for how many people that represents. Percentages alone can be extremely misleading without the underlying numbers. Therefore, I would be grateful if the minister could inform the House how many employees fall within that 26%, so that we may properly understand the scale of those who stand to be impacted.

This brings me directly to Amendment 7, in asking the Government what the definition of a high earner is. The answer given in Committee was totally noncommittal. May I therefore ask the Minister, as my noble friend Lady Neville-Rolfe has, to be transparent and provide a clear number? Is the threshold £30,000, £50,000, or is it some other number? I do not think this is too much to ask.

As for Amendment 5 in the name of my noble friend Lord Leigh of Hurley and others, there are already many students—including my sons—caught by the student loans repayment scheme. To fleece this cohort of individuals even harder seems extraordinary if salary sacrifice payments are considered as part of their income. They will never have a sufficient pension and, no doubt, some future Government will have to pick up the pieces.

Next, I would like to address the size of the cap, which currently would be £2,000. As I have mentioned, the proposed limitation is simply too low. Moreover, it fails to take account of those employees who may, on occasion, receive an unexpected windfall which they wish to contribute to their pension through a salary sacrifice arrangement. Amendment 12 from the noble Baroness, Lady Kramer, provides for a £5,000 cap, which would give employees the opportunity not only to save more towards their retirement but also to avoid a substantial national insurance liability on such a windfall. Provided inflation remains under control, this is a far more realistic and workable figure. While I would prefer the figure to be £10,000, as in amendments in the name of the noble Baroness, Lady Altmann, I fear that that is a step too far.

The amendments in the name of the noble Lord, Lord de Clifford, and those in the names of my noble friends Lady Neville-Rolfe and Lord Altrincham both address another issue: the quiet but persistent impact of fiscal drag. This is one of the most insidious ways in which Governments raise revenue without taking any overt action. With such a modest cap set out in the Bill, it risks being rapidly eroded by inflation, placing an unnecessary burden on basic rate taxpayers—precisely the group for whom pension saving is the most vital to support. I very much support those amendments.

Finally, Amendments 16 and 27 concern the SME and charity sectors. Last week in Committee, I mentioned many recent legislative changes that these entities have had to face, including the cost of energy, which now appears to be heading even further in the wrong direction. Between Committee stage and now, this has become very personal, as one of my children working in the retail industry was made redundant yesterday due to all these excessive costs. This Bill has not yet hit. I truly wonder if the company will survive. The Bill is, surely, another nail in the coffin for many more employees and, I suspect, a number of companies and charities themselves. They simply do not have the wherewithal to weather these storms, yet this Government insist on piling on ever more expenses, not only through greater national insurance payments but substantial additional associated administration costs. They will need to hire external resources to handle this difficult and pernicious legislation. It will not surprise noble Lords to know that I very much support these amendments.

[Lord de Clifford (CB)]

My Lords, I speak today in support of all the amendments in this group, particularly Amendments 12 and 26 in the name of the noble Baroness, Lady Kramer, and other Peers, and my own Amendments 14 and 27. I would have added my name to the noble Baroness’s amendments, but sadly I was a bit slow, and her popularity beat me. I remind the House of my registered interests as an owner of an SME and an employer.

Both these sets of amendments seek to increase the limit in separate ways. As I have spoken about at both stages of the Bill, the proposal mainly impacts middle-income earners. If the Government were to accept the amendment of the noble Baroness, Lady Kramer, this would allow all basic rate taxpaying workers making regular contributions to salary sacrifice not to have to pay NIC on their contributions. Also, it would encourage and give flexibility for workers on different salaries to increase their pension contributions above the 5% of auto-enrolment without being penalised and having to pay NIC on these increased contributions. Auto-enrolment is such an easy way for employees to raise their pension contributions and show flexibility.

I have seen in my own business that employees on a range of salaries from £30,000 to £50,000 per annum do increase and decrease their pension contributions depending on their current situation. This could be, for example, before starting a family or when they have a salary increase, small bonuses are paid, or they are moving closer to retirement. Accepting this limit will encourage people to save for their long-term retirement and give them flexibility in their contributions.

I have resubmitted my amendment as a suggestion and a compromise between the Government’s limit of £2,000 and the proposed new limit of the noble Baroness, Lady Kramer, of £5,000. My amendment seeks to increase the limit to £5,213.15 as it stands and is linked to the upper threshold of national insurance, at 5% of that amount.

I asked the Minister in Committee if there was any basis to the £2,000 limit other than the researchers’ suggestion to employers in the research commissioned by HM Revenue & Customs on attitudes to salary sacrifice, released in January 2024. Having reviewed the research, it appears that £2,000 is an arbitrary figure, if in some way linked to the median salary. The researchers contacted only 51 employers, of whom only 41 offered salary sacrifice. I believe that the total number of employers who offer salary sacrifice is around 290,000. Surely, only 51 employers is not a significant sample on which to base such an important change to the tax and pension systems.

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There is a lot in the Bill that is badly drafted and not clear or thought through. I have put down Amendment 36, which would delay the Bill coming into force. As that is less likely to be successful, I support Amendment 9, which would mean that, when these regulations come through, as they must, proper democratic scrutiny is applied by this House.

[Lord Ashcombe (Con)]

My Lords, very briefly, I support Amendments 6 and 22 from my noble friends Lord Mackinlay and Lord Fuller. As we have heard, the practical application of the £2,000 cap per person must be clearly defined in primary legislation. Leaving such a significant distinction—whether the cap applies to an individual or to each job they may hold—to secondary legislation would create profound uncertainty.

The administration of salary sacrifice schemes is already complex. It is unreasonable to expect each employer to know whether their part-time employees have additional jobs elsewhere, let alone what they earn in those roles. Many of these additional jobs may be sporadic or seasonal, with even the employee unsure of when work will arise or what their pay will be, particularly if it is commission based. It is difficult to believe that the Government intend individuals with multiple jobs to track their own cumulative salary sacrifice across different employments; nor, I suggest, is it remotely feasible for HMRC to monitor such arrangements effectively. From a practical standpoint, this amendment is simply common sense.

I turn quickly to those amendments that address the affirmative procedure. As I mentioned earlier, it is widely recognised that pension legislation is, at best, complicated, and particularly important to individuals when they retire. It is only right that changes in legislation that concern so many people and so much capital should be subject to proper parliamentary scrutiny. This is not a political issue but one of immense importance; it should therefore be subject to affirmative procedure.

[Lord Freyberg (CB)]

My Lords, as mentioned in the previous group, the creative industries are defined by workers holding multiple short-term contracts with different employers across a single year. The central question that this group addresses, and which has been repeated several times today, is one that was put to the Minister in Committee and remains unanswered: is the £2,000 contributions limit £2,000 per person across all employments, or £2,000 per employment? The Minister was asked precisely this question in Committee by the noble Lord, Lord Mackinlay of Richborough, who has repeated it today. The Minister’s answer was:

“That intention will be set out in the regulations once we have fully consulted relevant employers”.—[Official Report, 24/2/26; col. GC 365.]


I have no doubt that that consultation will be thorough, but for workers planning their finances now, and employers designing payroll systems well before 2029, that leaves a gap that the Bill itself should fill. Amendments 6 and 22 would fill it: the limit would apply in relation to each employment.

Even with that resolved, a second problem remains. As we have heard from the noble Lords, Lord Fuller and Lord Ashcombe, when a worker moves between employers mid-year, no mechanism exists for tracking what has already been sacrificed or reporting it to the next employer. Amendments 36 and 39 would address this by making commencement conditional on the Government first publishing guidance that answers both those questions.

There is a further complication that has not been addressed by debates in either House. Many creative workers are engaged by the BBC under schedule D terms as self-employed contractors with no access to salary sacrifice. However, under the off-payroll rules that have applied to public sector bodies since 2017, the BBC must assess whether each such engagement is “employment in substance”. Where the BBC concludes that an engagement is employment in substance, the worker is deemed an employee for NIC purposes, yet they have no actual contract to vary. Salary sacrifice requires a varying employment contract; deemed employment, created by statute, is not a contract. The worker acquires the NIC liability of employment without access to its benefits. That same worker may also be genuinely self-employed with one employer and employed in an ordinary sense with another all in the same year, with no framework in the Bill to accommodate any of it.

These amendments would not change the policy or the 2029 commencement date. They would ensure that, when the Act comes into force, the people it affects know how much it applies to them. I will therefore be supporting all four amendments.

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Moved by

[Lord Ashcombe]

34: After Clause 2, insert the following new Clause—
“Publication of relevant documents and reports(1) HM Treasury must maintain a single, publicly accessible location on a Government website in which all documents relevant to the operation and implementation of this Act are published.(2) Documents to be published under subsection (1) must include—(a) any Tax Information and Impact Notes relating to this Act,(b) any guidance issued to employers or employees relating to the operation of section 4(6A) of the Social Security Contributions and Benefits Act 1992 (as inserted by section 1) or section 4(6A) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (as inserted by section 2),(c) any consultation documents, technical notes or policy papers relating to regulations made under those provisions,(d) any reports or reviews concerning the operation, impact or effectiveness of this Act, and(e) any regulations made under section 4(6A) of those Acts and any accompanying explanatory memoranda.(3) HM Treasury must ensure that any document falling within subsection (2) is published in the location described in subsection (1) no later than the day on which it is laid before Parliament or otherwise made publicly available.(4) HM Treasury must ensure that the location described in subsection (1) is clearly advertised and regularly updated.”Member's explanatory statement
This amendment seeks to require the Treasury to publish all documents, guidance, consultations, regulations and reviews relating to the Act in a single, publicly accessible location to ensure transparency and ease of access for Parliament and businesses.

[Lord Ashcombe (Con)]

My Lords, I speak to my Amendment 34 in this group, and I am grateful for the support from the noble Lord, Lord Londesborough. Pensions legislation is, as many of your Lordships appreciate, inherently complex and difficult to understand. It is also currently undergoing further refinement in this House, which will inevitably bring more change. My amendment seeks to make life easier for those who provide pensions and those who invest in them. Its purpose is straightforward: to require the Treasury, should this Bill pass, to publish all documents, guidance, consultations, regulations and reviews arising from the Act in a single, publicly accessible and advertised location. This would support transparency and ensure that both Parliament and business can easily find the information that they need.

In Committee last week, the Minister referred to at least four different documents containing differing information and mentioned them this morning or this afternoon as well. This week, we learnt in the Times that Sir Steve Webb made a freedom of information request asking for a more detailed breakdown of the composition of the £4.5 billion to be raised in 2029 as a result of this Bill, who will be affected and how employers are expected to react to the changes. HMRC indicated that the information requested would “undermine” the policy-making process. Is it not our duty to ask the questions and expect a proper response in order to hold the Government to account? This would, of course, have added another document to those that would be publicly accessible.

In my professional life, I work for Marsh, a global company whose code of conduct for the greater good includes two principles that are particularly relevant to this debate—the code, of course, is written with the regulators in mind. They are that we treat customers fairly and we that communicate honestly and professionally with investors and the public. I am not convinced that the current approach to information accessibility meets either of these standards. It is difficult to imagine customers or investors being satisfied if told that essential documents are scattered across multiple websites and must be hunted down individually. Yet this is precisely the situation facing those who wish to understand the documents associated with this Bill. Why should the Government not be held to the same standards as the private sector? This amendment is simply about ensuring openness and transparency. It would create a single, reliable point of access for all relevant material, replacing the current scramble to locate information needed to make what are often complex and consequential decisions. I beg to move.

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In the light of the position that I have set out, I hope noble Lords feel able not to press their amendments.

[Lord Ashcombe (Con)]

My Lords, I thank the Minister for his responses and thank those who have taken part in this short debate. I am not sure that we have unknown unknowns, because the Minister has again stated where these various documents are scattered around, but we have an unresolved unresolved. As noted by the noble Lord, Lord Londesborough, this will reappear time and again as we go through different Bills in the Chamber.

Looking to the amendments other than my own, over the last month or so, as we have debated this complex subject, an awful lot of unknowns have appeared. Therefore, we should have clear thought put into, and publications on, what is going to happen, prior to the Bill being enacted—because it does not come into force until 2029—and subsequently on whether there is any degree of similarity after that, as I am not convinced. Having said that, I beg leave to withdraw my amendment.

Amendment 34 withdrawn.

Net-zero Emissions Target: Affordability

Lord Ashcombe Excerpts

Thursday 3rd April 2025 Lords Chamber

[Lord Ashcombe (Con)]

My Lords, it is a pleasure to follow my noble friend Lord Sharma. I agree with his last statement, but maybe not everything else. I am grateful to my noble friend Lord Offord for bringing this important debate before the House today, and I look forward to the maiden speech of the noble Lord, Lord Rees of Easton.

The debate is particularly timely given the economic challenges that the UK faces. Growth forecasts have been halved by the OBR and the Bank of England. Economic growth depends on affordable and plentiful energy supply, but energy in the UK is certainly not cheap. Before I continue, I should declare my interest as an insurance broker for the energy industry, predominantly in America.

The UK accounts for only 0.81% of global emissions, as we have heard, according to the International Energy Agency. In contrast, the top three emitters—China, the USA and India—are responsible for over 50% of the world’s emissions yet show little interest in reducing them. China is rapidly building coal-fired power stations, while the US has a clear stance on prioritising oil and gas production over environmental concerns.

The UK’s industrial electricity prices are 62% higher than Germany’s and more than four times the cost of electricity in the USA. This is putting real strain on our economy.

The UK’s energy mix still relies heavily on hydrocarbons, at 72%, with only 8% coming from renewables such as wind, solar and hydro. Nuclear contributes 7% and biomass, for which I have no great love at all, 13%. The goal of achieving net zero is admirable, but at what cost? There is growing concern that the renewable energy sector is receiving a near-unlimited budget while the hydrocarbons sector is increasingly penalised.

How many truly understand their domestic electricity breakdown? It includes the wholesale cost of electricity, network costs and charges for environmental and social programmes. For April to June, the breakdown is wholesale costs of £387, network costs of £544, and environmental and social costs of £168. The domestic customer will be paying a 43% surcharge on the wholesale price to help meet climate change targets.

When combined, according to the OBR, the green levies for all domestic and industrial users are expected to raise £12 billion in 2024-25, £12.9 billion in 2025-26 and £15.2 billion in 2026-27. These are vast sums, yet green energy accounts for only 8% of our country’s energy usage and 37% of the electricity generated.

Lazard’s Levelized Cost of Energy shows that the lowest-cost sources of energy are onshore wind and solar, and combined cycle gas generation. All face significant challenges. Wind is intermittent, the sun does not always shine and geographical and planning constraints limit its potential. Meanwhile, any further licensing of offshore hydrocarbon production is currently under review. There has of course been significant offshore wind expansion, but it has come at significant cost.

North Sea hydrocarbon production is rapidly declining. The NSTA predicts it will halve by 2030. However, estimates by OEUK suggest that 12.5 billion barrels of oil equivalent may remain. The UK oil and gas demand is anticipated to be 13.5 billion to 15 billion barrels of oil equivalent until 2050. In addition, the massive onshore gas potential in the Gainsborough Trough could have a similar impact to shale in the US, increasing tax revenue and reducing import reliance. Importing gas, especially LNG, is far more polluting than producing our own hydrocarbons, as LNG emissions are more than three times higher than domestically produced gas. Some our remaining heavy industries, such as Grangemouth and Scunthorpe steelworks, are under threat. While it may be too late to save some, acting now to encourage the use of our own resources could prevent further damage and even foster advanced industries, such as the energy-hungry AI sector.

It is good that the UK has been an absolute trailblazer in reducing emissions, but it is clear that leading alone is insufficient when the top polluters are unwilling to act. The UK economy is experiencing stagnation, but there is a way forward. We must reduce costs, cut emissions and provide an opportunity for the country to grow, while creating a sense of optimism and prosperity. The key is leveraging our own resources and finding a balanced, practical approach to energy policy that allows for both environmental progress and economic growth.