Department for Work and Pensions

Mark Garnier Excerpts

Tuesday 30th June 2026 Commons Chamber

[Mark Garnier (Wyre Forest) (Con)]

I thank the Chair of the Work and Pensions Committee, the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), for securing this debate. I offer my congratulations to my hon. Friend the Member for Aberdeen South (Douglas Lumsden) on a great Conservative gain and to the hon. Member for Arbroath and Broughty Ferry (Lara Bird) on an SNP hold, and I congratulate them both on their maiden speeches. I welcome the opportunity to challenge the Minister on her Department’s spending policies and performance.

We cannot pretend that welfare reform is not difficult to achieve. As the shadow Secretary of State, my hon. Friend the Member for Faversham and Mid Kent (Helen Whately), said recently:

“When I speak to former Welfare Secretaries, I hear the same thing again and again. Welfare reform is hard. You will be hated.”

That is why we offered our support to the previous Secretary of State, the right hon. Member for Leicester West (Liz Kendall), when she attempted to bring down the benefits bill, because it was the right thing to do.

Everyone is paying more in tax to pay benefits to others. That is not fair, and it needs to change. When it comes to our welfare system, we need to be clear what we want from it. The system should be there to help people when they fall into difficulty; at the same time, it should help the most vulnerable people in our society. There are many people who simply cannot work, and they must be protected. However, we have got to a state in which too many people are reliant on the benefits system.

Let us take a look at where we have got to today. When we left office, inflation was at 2%. Unemployment was at 4.1%, and youth unemployment was at 14%. Some 6.8 million people were claiming universal credit, and 3.5 million people were claiming personal independence payments. Twenty months later, after Labour came to power, inflation has risen to 2.8%. Unemployment has risen to 4.9%, and youth unemployment has risen to 16.2%. Some 7.9 million people are claiming universal credit, which is 1.1 million more people, and 3.9 million people are claiming PIP—that is 400,000 more people. That is unsustainable.

How have we got to this position? Part of it is down to the Government’s policies around employment. The increase in employer national insurance contributions to 15% has added more costs to businesses. That means that many businesses have had to make redundancies and are hiring fewer people than before. That is especially affecting young people, hence why we now have higher youth unemployment than the European average. That is not a good thing after 20 months in power. At the same time, the Government introduced the Employment Rights Act 2025, adding even more costs and complexities to businesses. These costs to businesses are estimated at £5 billion.

When the Minister closes the debate, I am sure she will talk about the increased funding in apprenticeships, which is of course welcome. It is all well and good increasing funding for apprenticeships and employment, but it is ultimately pointless if there are no jobs available. That is what this Government seem to fail to understand. This is a crisis of their own making, and they are putting their head in the sand and pretending it is all fine. As the Leader of the Opposition has said, if it is all fine, why is the Prime Minister resigning?

When it comes to welfare specifically, we are at a point where more than half of all households are net beneficiaries of benefits. Again, that is unsustainable. The Government had the chance to reduce the benefits bill, and the Leader of the Opposition pledged our party’s support in doing that. However, the Government could not face down their own Back Benchers, so we are left waiting for the Timms review of PIP to report in the autumn, which may not even suggest making the necessary savings we should all make on PIP.

In this year alone, PIP will cost the Department an extra £3.5 billion, and universal credit will cost nearly £9 billion extra. If we stay on this trajectory, the health and disability-related benefits bill could reach nearly £100 billion by the end of this Parliament. We should be acting now; instead, we are left with dither and delay.

Finally, we need to talk about fraud, which is becoming ever more pervasive—the National Audit Office found that it cost the public sector between £55 billion and £81 billion in 2023-24. That figure continues to increase year on year, so there is a real need to tackle fraud and ensure that public money is allocated correctly.

[Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)]

Will my hon. Friend give way?

[Mark Garnier]

I am not going to give way, because I have very limited time—my apologies.

When it comes to fraud and error in the DWP specifically, the Department’s own statistics estimate that around £9.9 billion is overpaid in benefits each year. Two thirds of those overpayments are for universal credit claims, so I hope the Minister will explain why fraud and error are particularly high for universal credit claims and what steps are being taken. In 2017, there were 7,840 convictions for benefit fraud; last year, there were 461. That is a 94% decline in convictions, and fewer than 600 individuals have been convicted in total since the general election. I agree with my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) that we should be making an example of benefit cheats in the courts to disincentivise others.

Madam Deputy Speaker, you will be delighted to hear that I am coming to the end of my speech. Under this Government, hard-working taxpayers are being asked to pay more. Many people would hope that that money would be going towards—for example—increasing the defence budget, but as this estimates day debate has highlighted, it is going to the DWP budget instead. The Government know that this is not right; indeed, the previous Secretary of State for Work and Pensions was right when she said that the Government

“must not…duck the big challenges facing this country”.—[Official Report, 1 July 2025; Vol. 770, c. 164.]

However, when it came to making the tough decisions, they bottled it every time. Maybe the next Government, led by the right hon. Member for Makerfield (Andy Burnham), will do better. In his speech yesterday, he said that he would control the welfare bill, and told us to “imagine”. We on the Conservative Benches hope that his promises do not turn out to be imaginary.

Oral Answers to Questions

Mark Garnier Excerpts

Monday 29th June 2026 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Mark Garnier (Wyre Forest) (Con)]

The Pensions Minister likes to spend a lot of time criticising the previous Government for their actions on pensioners. He also spends an awful lot of time talking up his legacy on helping pensioners, but his actions simply do not reflect the narrative. So far, he has capped salary sacrifice, there have been delays to the pensions dashboards, we have had retrospective changes to inheritance tax on pension pots, and—as we have heard—the Government are chasing hard-up pensioners for their winter fuel allowance. All of this creates uncertainty among savers and pensioners alike, so I will repeat the question asked by the hon. Member for Romford (Andrew Rosindell): is the Pensions Minister hopeful that his successor will do a better job of looking after pensioners?

[Torsten Bell]

I am incredibly hopeful that this Government are doing a much better job than the previous Government in supporting pensioners, not only by driving up the state pension, but by getting on with the much delayed reforms to our defined-contribution pension system, which the previous Government left on ice. We are also coming forward with something much more important, because the biggest betrayal of older generations in Britain today is the state in which the Conservatives left our national health service.

Draft Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026

Mark Garnier Excerpts

Tuesday 16th June 2026 General Committees

[Mark Garnier (Wyre Forest) (Con)]

I was going to bang on with a very long and intelligent speech, but in the interests of brevity and keeping everybody happy, I will not. I am delighted that the Minister is introducing legislation relating to the glorious regime of the strong and stable Conservative Government of 2020 and the 2023 Budget. This policy was slightly bonkers. We need to do everything we can to encourage people to save and not put a cap on their savings. I am tempted to go on about salary sacrifice, but I will spare the Minister the embarrassment of reminding him about that. We will certainly not oppose these regulations.

Pension Schemes Bill

Mark Garnier Excerpts

Consideration of Lords message
Tuesday 28th April 2026 Commons Chamber

[Mark Garnier (Wyre Forest) (Con)]

The hon. Gentleman makes an incredibly important point about crossing the Rubicon, given that the Government are taking mandation powers to interfere in people’s savings and assets. We are talking about pension funds here, but once that Rubicon is crossed, there is no reason why the Government would not feel that they could start mandating how investment trusts or other types of savings schemes invest. This issue is not just about pensions; it is about the fundamental relationship between the state and private individuals.

[Steve Darling]

The hon. Gentleman makes a powerful point; I am sure that the Minister will reflect on it when winding up. The Liberal Democrats continue to oppose mandation, and we plan to vote against the motion tonight.

Pension Schemes Bill

Mark Garnier Excerpts

Consideration of Lords message
Monday 27th April 2026 Commons Chamber

[Andrew Western]

I recognise, as the shadow Secretary of State set out, that there has been a great deal of consensus on many aspects of the Bill, and that we are wrangling merely over this one remaining issue. The Opposition argue that this power is wrong in principle, but we fundamentally disagree. We have had this debate on a number of occasions, including on Second Reading. I set out in my opening speech why this continues to be the Government’s position, and we have heard the arguments against.

I gently point out that the shadow Secretary of State’s letter to industry last week conceded that in the absence of this sort of power, funds are understandably cautious about being first movers, and that is a legitimate concern. That is the collective action problem that we have. The Mansion House compact has been running since 2023, but progress has been modest. The industry has identified competitive pressure to keep costs low as the single biggest barrier to delivering on its own commitments. In other words, providers want to diversify in their members’ interests, but they risk being undercut on cost by competitors that do not. The reserve power gives the market confidence to move together.

We have also heard that the power undermines fiduciary duty—it does not. Trustees’ duties of loyalty and prudence, and to act in members’ best interests, remain.

[Mark Garnier (Wyre Forest) (Con)]

With the greatest respect, the Minister is talking nonsense. At the end of the day, every trustee has a fiduciary duty to get the best return for their members. By putting in these mandation powers, the Government are fundamentally going against the most basic principle of the City of London, which is dictum meum pactum—my word is my bond. The Government entered into a pact with the industry, and they are now reneging on that pact by introducing mandation and not allowing the industry to move things forward. The Government are so wrong on this whole point. The Minister should withdraw the mandation powers and get rid of clause 40.

[Andrew Western]

I am sorry to disappoint the hon. Gentleman, but that is not going to happen. We have to deal with the collective action problem that we are facing, to ensure that providers can move forward with the commitments that they have made. The power gives them assurance, but we hope that we will never need to use the power. The fact of the matter is that the industry requires that certainty; without it, it will not be able to move forward, given the collective action problem that exists. That point has been accepted by the shadow Secretary of State.

Oral Answers to Questions

Mark Garnier Excerpts

Monday 27th April 2026 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Mark Garnier (Wyre Forest) (Con)]

When his party was in opposition, the Prime Minister promised compensation for WASPI women, but when faced with the economic reality of the costs, he and the Secretary of State chose common sense over ideology. In the spirit of that pragmatism, may I ask the Pensions Minister also to take a sensible, thoughtful approach to mandation powers in the Pension Schemes Bill, and to remove clause 40 altogether?

[Torsten Bell]

We have debated this issue quite extensively in recent weeks, and the House will have another chance to do so later today. As I have set out during our debates, representatives of the industry itself have said that it is in the interests of savers to invest in a wider range of assets. That reflects lessons from across the industry—from open defined-benefit schemes, but also from those in the rest of the world, where the lack of exposure of the UK’s defined-contribution schemes to that wider range of assets makes it stand out. We have introduced a reserve measure to backstop the changes that the industry says are needed to solve a collective action problem. I will not try the patience of the House by repeating them now, but the aim is to ensure that savers do not lose out. We have also put in place significant protections relating to an affirmative vote, as well as the savers’ interest tests that enable pension schemes to spell out what is in the interests of their members.

Pension Schemes Bill

Mark Garnier Excerpts

Consideration of Lords message
Wednesday 22nd April 2026 Commons Chamber

[Liam Byrne]

I am grateful for that intervention, because the hon. Lady made my second point for me. It is just not good enough to will the ends and not the means. The reality is that, after all the heroic work of the former Conservative Chancellor, built on ably by the current Chancellor of the Exchequer to advance the Mansion House accord and the Sterling 20, the repatriation of long-term savings into our country is going at a snail’s pace. If we want to deliver it by a timetable on which we are both agreed, we will need to give a little bit of encouragement to the industry. That is exactly what the Minister’s proposed provision would do.

[Mark Garnier (Wyre Forest) (Con)]

The right hon. Member raises many really important points, much of which we agree with. That is why, I think on Report, the Opposition tabled an amendment to try to understand what the problem was. It specifically asked, “Why are these pension funds not investing in the UK? Is it legislative, is it regulatory or is it cultural?” The Government voted against that. They voted against exactly the work we need to do to understand what the problem is. Could he possibly explain why?

[Liam Byrne]

I can advance only my own analysis of what will be needed. Indeed, it is part of a wider Business and Trade Committee inquiry, which will produce a report in a couple of weeks, on how we transform the investment environment. The reality is that there is a shared ambition on both sides of the House to ensure that we fix this long-standing paradox. My judgment is that the measures the Minister is proposing are essential if we are to deliver on that by the early 2030s. It is just not good enough to try to persuade Britain’s pension funds through sheer mind powers alone to repatriate the investment they are proposing. By taking the Minister’s approach, we stand a better chance.

--- Later in debate ---

[Torsten Bell]

I thank the Members from across the House who have contributed to the debate today. Let me respond directly to a few of their comments. I welcome much of the shadow Secretary of State’s remarks. I am glad that she welcomed many of the Government’s amendments, including those on public sector pensions and around innovation and competition—I appreciate that. I hope, when those issues are debated in the Lords in the near future, that there will be similar consensus across that House.

The shadow Secretary of State raised the question of scale. Again, I am glad that she has welcomed the review that will happen within 12 months of the Bill’s commencement. On scale, I am a bit more confident than she is on the role of small schemes to grow, because we can see significant growth right across the market, including among small schemes, partly because the market itself is growing so fast in the current climate. However, I offer no comment on her pessimism about Tottenham Hotspur; that is for others to speak on.

To be fair, as the shadow Secretary of State set out, the main area of disagreement that remains is around the reserve power. She raised the question of the accord and whether it applied to the whole industry. She is correct; it does not apply to the whole industry, but it does cover 90% of defined contribution assets held within the industry. We are therefore talking about not just a majority but the overwhelming majority of the industry.

The hon. Lady mentioned the Labour manifesto, which set out two focuses on pensions. One was around the question of scale, on which we have just touched and which I think is a matter of cross-party consensus; the second, which, again, I think is a matter of cross-party consensus, is on the importance of delivering change in terms of investment in productive assets in private assets. That is exactly the focus of both the Mansion House accord and the reserve power.

The hon. Lady said the power was about directing specific outcomes. As I have been setting out, it absolutely does not do that. It will not allow any direction of savers into particular assets or particular asset classes, and it offers no ability for Government to take control of pension savers’ pensions. Indeed, I think it is actually dangerous to have members of the public hearing remarks like that when that is categorically not the case.

The shadow Secretary of State is right to say, though, and this maybe gets to the crux of where we are, that the money belongs to savers. That is what this is about and that is what we all agree about; we want to see higher returns to savers. The industry is telling us that diversifying their range of assets is in their savers’ interest and it is admitting that it has not done so to date. [Interruption.] No, that is what the industry is saying. Savers are not saying that, because savers do not have that choice and they are intermediated by providers, some of which have trustees and some of which do not. That is the underlying point: they need to see that change happen, that it has not happened and that we have seen it not happen. Implicitly, what that is saying is that members are losing out from the status quo, and what I am not hearing from the Conservatives is a serious engagement with that reality that has let down savers. [Interruption.] I will come to the point about the previous amendment tabled by the hon. Member for Wyre Forest (Mark Garnier) shortly.

I now come to my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), not least because he admirably set out the big challenge facing Britain, which is to turn this country back into a country that invests in its own future once again. That means higher investment. It is not acceptable that Britain saw both the second-lowest public investment in the G7 and by far the lowest business investment in the G7 under the last Government—and not for some years but for almost every single year. That is the challenge that I think we all want to see addressed. Part of the issue being raised about whether this is about UK assets or private finance is overdone, because what we see around the world is a higher home bias among private asset investments than among public asset investments, for all the obvious reasons about the comparative advantage of different investors in those situations.

My right hon. Friend also rightly says—I think this is, again, part of a cross-party consensus—that moving to that high-investment world is overwhelmingly not about pensions, but much wider changes and about making sure that actual investment happens so firms can actually get things built. That is why this Government have come in and provided the go-ahead for solar farms, wind farms, national grid investments and nuclear power stations that have been held up for too long. That is what a higher-investment country looks like and that is what we need to be getting on with, and I have a nugget of good news to bring my right hon. Friend on that. If hon. Members go and look at the investment levels in the national accounts—I know everybody in this room spends their time doing that—they will see that, since the election, Britain has seen the fastest investment growth of any country in the G7. That is what we are starting to deliver against what we set out as our core objective, which is turning Britain back into a higher-investment country.

The hon. Member for Wyre Forest mentioned his previous amendment, which asked for the reasons why schemes say the change would be in savers’ interest but have not done it. The problem is that we have had a lot of reviews. The Association of British Insurers has written some and published them, explaining why the previous Government’s attempt with the Mansion House compact did not work. We have the answer; I am afraid the hon. Gentleman just does not want to engage with what he is being told.

[Mark Garnier]

Both sides of this House are going with the grain of what is intended on this. There is a fundamental problem—we all agree on that—but let us get the issues out of the way that are blocking it. We cannot force people into a minefield if the mines are still there; we have to clear the mines and allow them do it. This is the most fundamental point. The Government should not be telling pension fund managers how and where to invest their money. If there is a problem that they are going to encounter, we should get those problems out of the way and managers will go into those assets.

[Torsten Bell]

I am afraid the hon. Member has just revealed his lack of focus on what is going on. Pension schemes from around the world are investing in British private assets; it is UK pension schemes that are not. The hon. Member implied that there were minefields when investing in Britain. It is that kind of talking down Britain that is the problem. We are making sure that there is a robust pipeline of investments, which is absolutely right.

Pension Schemes Bill

Mark Garnier Excerpts

Consideration of Lords amendments
Wednesday 15th April 2026 Commons Chamber

[Neil Duncan-Jordan]

In fact, I raised something very similar when the Bill passed through this House.

The investments that we could make through our pension funds could go into green energy, which is the growth engine of the future, as well as into affordable and social housing, which is so needed in this country. That should be underpinned by greater democracy in our pension funds, so that workers have a say in where their money is invested. I believe that if that was the case, they would certainly choose to put it not into arms manufacturers or fossil fuels, but into decent homes for them and their communities.

The crisis in the middle east has exposed the fragility of our dependence on fossil fuels. A break in the supply chain thousands of miles away has a catastrophic cascading effect here, driving up costs and deepening the cost of living for our constituents.

[Mark Garnier (Wyre Forest) (Con)]

What about Rosebank and Jackdaw?

[Neil Duncan-Jordan]

Would the hon. Gentleman like to make an intervention?

[Mark Garnier]

indicated dissent.

[Neil Duncan-Jordan]

Okay.

We must accelerate the transition away from fossil fuels, even though some Members on the other side of the House seem to disagree with that. We must deliver long-term energy security and bring down bills through domestic green energy, but not only that. In this moment of deep crisis, the Government must pull every lever they can to lift the weight of the cost of living crisis, and that must include gearing our pension funds towards a fairer, more prosperous future.

--- Later in debate ---

[Torsten Bell]

As a point of principle, Madam Deputy Speaker, I never fight with you—it would end badly for everyone and I would lose every time.

The Conservatives would have opposed the Bill every step of the way. They would have not just been on the barricades but built them, which is the exact opposite of what the shadow Secretary of State did. What did the hon. Member for Wyre Forest tell the House on Second Reading? He said that

“the Minister will be pleased to hear that there is cross-party consensus on many of the planned changes.”—[Official Report, 7 July 2025; Vol. 770, c. 722.]

Well, that was nice.

[Mark Garnier]

rose—

[Torsten Bell]

No, we have got some more. That was before Conservative Front-Bench Members—then in a less bonkers phase of life—nodded through the Bill, which they now claim is some kind of end-of-days Armageddon. Let us be reasonable.

National Savings & Investments

Mark Garnier Excerpts

Thursday 26th March 2026 Commons Chamber

[Mark Garnier (Wyre Forest) (Con)]

I thank the Minister for early sight of his statement. This scandal affects tens of thousands of people, and it could end up costing taxpayers many millions of pounds. NS&I is supposed to be as safe a place as anywhere for people to put their savings—a place where savers can trust that their money will be looked after. As we have heard, 24 million people do so. It is also a savings scheme that the Government can use as a benefit to taxpayers, borrowing to provide funds for the running of the country. It needs to be demonstrably secure.

In reality, bereaved families have been short-changed, with NS&I losing track of investments, delaying transfers and withholding premium bond payments. Customers have faced a complete breakdown in communication at the most difficult time, adding stress and worry. In the breaking newspaper reporting today, we have heard how people have had to chase up their own cases, only to be told that they would have to wait a further six to nine months for a resolution. Some families have also had to call in lawyers to obtain money that is rightfully theirs, and there are examples of bereaved family members receiving letters incorrectly addressed to their dead relatives. NS&I has in the past tried to blame some of these failures on covid and the outsourcing of staff, but whatever its excuse, this is unacceptable and a complete failure of management.

NS&I is letting down its customers, and complaints have more than doubled in just over three years. At the same time, the digital transformation of NS&I that was meant to cost £1.3 billion has now ballooned to £3 billion. Is it any wonder that the Public Accounts Committee was damning about the digitalisation plan, calling it a “full-spectrum disaster” and concluding that NS&I is “over-confident” and

“has no workable plan, and no idea of eventual cost.”

If the Public Accounts Committee could see it, why have this Government been sitting on their hands? Poor performance and a botched digital transformation mean that NS&I is short-changing savers at a time when raising money for the Government has never been needed more.

NS&I is an arm’s length body overseen by the Treasury. Specifically, it is an Executive agency of the Chancellor, so it is concerning that the Minister has today admitted that NS&I notified the Treasury of these operational failings on 18 December last year. It has apparently taken a breaking news story in The Daily Telegraph for the Government to make a statement today. Can the Minister please explain why it has taken him over three months to come forward with this statement? He also says that the previous Government failed to act. That implies that there was something to act on. Can he set out what actions he has taken between coming to power on 4 July 2024 and 18 December 2025?

I have some further questions for the Minister. What provision has been made for compensation and who will pay for it? Where bonuses have been paid to senior staff over the period of poor performance, will they be recovered? On that note, we have seen reports that the chief executive will be resigning as a result of this issue and the botched digital transformation process. Can the Minister confirm whether he has resigned, or has he been sacked? Can he confirm whether the chief executive received bonuses over this period of poor performance? Finally, what confidence do the Minister and the Government have that this is the true depth of the problem affecting bereaved families? What work is he doing to identify whether this might be the tip of an iceberg? I am not trying to imply that it is the tip of an iceberg, but I ask the question to ensure that this is the limit of the problem.

People have been let down. While NS&I has apologised for the mistakes, it will be of little comfort to those thousands of people who have lost out. The Government need to act swiftly and the families need to be compensated. The Opposition will work collaboratively with the Government to ensure a swift resolution.

[Torsten Bell]

I welcome the tone of the shadow Minister’s remarks. I obviously absolutely agree with him that customers deserve better and they deserve reassurance. I have tried to provide that today by setting out what we are doing, and giving everybody reassurance that their savings are 100% safe and are guaranteed by the Government.

The hon. Member asks why we have come to the House today. This has been the intention for some time. As he says, we were notified in December. During that period, we have reviewed the over 34 million cases of customer records, as I mentioned, and have put in place the process to ensure that we have fixed this problem as we go forward, so that we can provide the reassurance for customers that I know we both want. I have also put in place the change of leadership that I have set out today, about which the hon. Member asked. I can confirm that the former chief executive of NS&I has resigned today and that he did not receive a bonus last year.

The hon. Member asked about the cost to taxpayers. There has been some deeply misleading reporting over the course of the last 24 hours, so I want to be absolutely clear: the money we are talking about returning to estates belongs to those estates—it is their money. The returning of people’s money to them is not a liability to other taxpayers; it is the right thing to do, and that is what is going to take place.

The hon. Member asks whether it would have been reasonable to have expected the previous Government to act. I am sure that he would rightly note that NS&I is operationally independent; I think the challenge comes given that it became clear in around 2018 that there were significant problems in this area—I mentioned the Santander case in particular—and there was widespread coverage at that time; within NS&I, people realised that this could pose problems for them.

The hon. Member has taken an excellent tone today. I was less impressed to read the comments of the shadow Chancellor, the right hon. Member for Central Devon (Sir Mel Stride), in the Telegraph, in which he talked about a “staggering failure of oversight”—he was the Treasury Minister in 2018 when the Santander case came forward! As often, the hon. Member for Wyre Forest (Mark Garnier) has shown better judgment than his superiors. Then again, the right hon. Member for Newark (Robert Jenrick) has also talked about

“incompetence on a staggering scale”,

which is an irony given that he, too, was a Minister in the Government carrying out the incompetence to which he refers.

I broadly welcome the way in which the hon. Member for Wyre Forest has conducted himself today. It is absolutely right that we provide the reassurance to taxpayers and, most importantly, to savers with NS&I; I hope that I have done so today.

National Insurance Contributions (Employer Pensions Contributions) Bill

Mark Garnier Excerpts

Consideration of Lords amendments
Monday 23rd March 2026 Commons Chamber

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Minister.

[Mark Garnier (Wyre Forest) (Con)]

I would also like to start by thanking the Lords for their very hard work. I do not think the Government won a single vote during the Bill’s passage in the other place.

Over the past few months, we have seen how enthusiastic the Government are to raid savings. In particular, they are very keen to raid pension pots. Whether by taking powers to mandate private pension funds to invest in Government white elephants or through the Bill we are debating tonight, the Government have established beyond any doubt that they have no interest whatsoever in savers and strivers.

Pensions are important. They provide for security in retirement. The pact that has been established between the state and the pension saver, which goes back to the 1920s, is all about not just helping savers but taking the strain off the state: encourage saving now and there will not be a burden on the state of an impoverished pension in the future. Under the previous Government, we saw the roll-out of auto-enrolment, bringing 10 million people into the savings culture, and we introduced the triple lock to reverse the decline in the value of the state pension under the previous Labour Government.

Despite those positive steps, we recognise that people are still not saving enough for their retirement. As the Government’s own analysis shows, 50% of savers are projected to miss their retirement income targets set by the 2005 Pensions Commission, so we need to do better. I know there is cross-party consensus on that point, if nothing else, so let us be honest: the changes to salary sacrifice arrangements will do the complete opposite. As the Association of British Insurers and Pensions UK have outlined, we should be improving our current offering and providing new opportunities. Instead, the Government are making the situation worse in a desperate attempt to balance the Government’s books, conveniently in three years’ time. Frankly, it makes little sense and that is why we oppose this legislation.

The point of salary sacrifice arrangements is that they incentivise certain behaviours. That is why people are allowed to use these schemes to put money towards not just pensions but workplace nurseries, childcare vouchers and cycle-to-work schemes. Those are all good things. However, in this case the Government have singled out pensions and are attacking one of the most important things that people should be saving towards—their pensions. This is hard-earned taxpayers’ money that could be going towards a good thing. Instead, the Bill will remove an avenue that 7.7 million employees are currently using. The Bill will add even more cost to the 290,000 businesses and charities that use it. It will pile more cost on to students already saddled with student loans. It will harm pensions adequacy and force more people to rely on the state, pushing more costs on to the next generation. I am proud that my colleagues in the Lords, as well as Liberal Democrat and Cross-Bench peers, understand those concerns. The Opposition remain opposed to the Bill, but the amendments do go some way to address those issues and support the stated objectives of this policy, even though we disagree with the fundamental policy.

Lords amendments 1 and 7 would make basic rate taxpayers exempt from this policy. That would protect a group who typically under-save and allow them to continue to put savings into their pensions. The hon. Member for Harlow (Chris Vince) may be interested in listening to this, because he raised a very important point about lower rate taxpayers. The amendments are identical to the amendment we tabled in the Commons and that Labour MPs decided to vote down. As the Government’s own impact assessment clearly states, they are trying to target higher earners or those making larger contributions. While that might be the stated purpose and the political justification, in reality that is not the case for two reasons.

First, the cap will still affect 858,000 basic rate taxpayers, according to the Society of Pension Professionals. In fact, reporting from the Financial Times has highlighted how the Bill will disproportionately affect those people, compared to those on a higher rate of tax. Those on the basic rate of tax pay 8% national insurance contributions, while those on the higher rate of tax pay 2% NICs. That means that on national insurance contributions alone, lower earners are being hit four times as hard by this policy—four times. On Second Reading, I asked the Minister how that could be fair. He did not answer my question then, but I hope he will be able to answer it when he winds up. Maybe he can tell us how the policy is fair for those hard-working people, or whether they are just casualties of rushed policymaking.

Secondly, a behavioural outcome may be that employers will remove salary sacrifice as an option for all their employees. We already recognise that salary sacrifice is mutually beneficial for employees and employers. It is also more attractive to both sides, as it is simple to understand. By enforcing the cap, it will change not only the viability of salary sacrifice arrangements, but employers’ perception of them.This may result in many employers removing them as an option altogether, meaning that 4.4 million people who are supposedly protected may be affected. If this Government were really serious about their policy objective, they would exempt basic rate taxpayers altogether. These amendments give them the chance to do just that and to back hard-working people.