National Insurance Contributions (Employer Pensions Contributions) Bill

Richard Fuller Excerpts

2nd reading
Wednesday 17th December 2025 Commons Chamber

[Richard Fuller (North Bedfordshire) (Con)]

For a Bill that proposes to raise taxation on working people by such a large amount, this has been a remarkably brief debate. But I commend my hon. Friend the Member for Solihull West and Shirley (Dr Shastri-Hurst), who correctly said that this was yet another anti-aspiration measure from this Government, and the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter), who made it clear that this was yet another example of Labour breaking its manifesto pledge not to raise taxes on working people. He also asked one of the key questions, which I hope the Minister will address in his reply: as this measure is due to come into force in three years’ time, what assessment have the Government made of behavioural changes, and can the Minister be assured that the amount in the OBR forecast is robust on a dynamic accounting basis?

This is the final economic Bill of the year to be voted on in the House of Commons, and it is another Bill that targets people who are trying to do the right thing. The Bill is a bad measure. It is an anti-savings measure and it is an attack on prudence, so of course the Conservative party will oppose it. This final Bill, at the end of this full-on year of Labour government, leaves me with one fundamental question: why do the Labour Government hate the private sector so much? If you are a family farmer, the Labour Government will snatch your farm away from your children when you die. If you believe in private education, the Labour Government will put up a barrier at the school gate. If you save for your retirement, Labour will tax your every effort to achieve security in retirement. Why do the Labour Government take every opportunity to punish people who are trying to do the right thing?

The Bill makes a mockery of the Government’s own Pensions Commission, set up in July this year, when it wrote:

“Put bluntly, private pension income for individuals retiring in 2050 could be 8% lower than those retiring in 2025—undermining a central measure of societal progress.”

Back in June, the Government recognised the problem of a secure retirement. Now, they are adding to the problem.

I have a question about the numbers. It is interesting that this measure is scored by the OBR in that crucial year of 2029-30 at £4.845 billion, falling the following year to £2.585 billion. That is an important year, because that is when the Chancellor says she has put in all this headroom—how interesting. Does the Minister agree with the director of Willis Towers Watson, one of the world’s biggest advisers on pensions, when he said:

“While earlier introduction would be unwelcome, the change appears to have been timed to maximise revenue in 2029/30—the year that counts for the Chancellor’s fiscal rule. £1.6 billion of revenue in that year is a temporary gain which will be returned to taxpayers who pay employee contributions instead and claim back part of their tax relief”?

On the £4.845 billion—the full amount—is any of that actually a fiction that will be returned the following year, as experts suggest it will be?

The Bill makes it less attractive for employers to contribute to private sector pensions. We all know that there is less certainty in the private sector, because that is where defined contribution schemes predominate, whereas in the public sector, greater certainty is given by a defined benefit scheme. In the public sector, there is also benefit because the contribution from the employer to employee pensions is much higher than in the private sector. In the public sector, employer contributions are equivalent to 27% of earnings, on average, according to research by the Taxpayers’ Alliance, but in the private sector the average contribution is only 8%. Why are the Government proposing to make it harder for private sector employers to contribute to the pensions of their employees? The Bill actively exacerbates the differences. By the way, it does nothing to tackle the unfunded £1.5 trillion liability of unfunded public sector pensions, which will fall on taxpayers.

The Bill is yet another example of the lack of private sector experience on the Government Front Bench. This Government are the least business aware Government in our country’s history. They are taxing and regulating growth out of our economy. Labour Ministers are punishing workers who want to save more for their retirement, and making it harder for their employers to help them to do so. While they can rely on their cushy, gold-plated public sector pensions, private sector workers are worse off.

[Madam Deputy Speaker (Caroline Nokes)]

Order. Before I call the Minister, I want to put on the record that the behaviour I have seen on both Front Benches this evening has been about the worst I have ever witnessed. The debate should take place across the Dispatch Box, not from a sedentary position. [Interruption.] No—not “He started it!” This is not a classroom.

--- Later in debate ---

[Dan Tomlinson]

Some 4.4 million of the self-employed are also not able to save into salary sacrifice schemes; it is right that we make the scheme fairer for all.

Let me continue to run through my numbers. Some 10 million people have signed up to a pension since auto-enrolment, which has limited the need for salary sacrifice. There are more than 900 tax reliefs; this is one of a number that we are reducing to raise revenue fairly at this Budget. Without intervention, salary sacrifice would have cost £8 billion a year by the end of the decade. Instead, we will now raise £7 billion from this change over the course of the scorecard.

The change will affect those on higher earnings more: 60% of the contributions come from the top fifth of employees and just 5% of those earning less than £30,000 will be affected. We will give businesses time to plan—this is not coming in for a bit less than four calendar years.

[Richard Fuller]

Will the Minister give way?