National Insurance Contributions (Employer Pensions Contributions) Bill

Debate between Torsten Bell and Neil Shastri-Hurst

2nd reading
Wednesday 17th December 2025 Commons Chamber

[Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)]

It strikes me that it should not be particularly controversial that a Government should be encouraging people to save for their retirement, to take responsibility for their future and to feel secure in later life. Therefore, although we are dealing with a short Bill that appears to be purely procedural in nature, its practical consequences are profound, because it takes us in precisely the wrong direction.

Beneath the layer of technical language lies a troubling choice. It is a choice to tax aspiration, penalise prudence and chip away at the very habits that ensure financial security in our later years. The Government have sought to assure us that this only affects high earners and that most will not be affected, but that is not how it will feel to the majority of people in the real world. One in five people—approximately 20%—rely on salary sacrifice. Those are people who are doing the right thing; they are choosing long-term security over short-term consumption. Yet under the Bill, to save means to pay more. That is not positive pension reform; it is a stealth national insurance rise, dressed up in the cloak of technicality.

At a time when businesses are struggling under huge wage bills, regulatory uncertainty and sluggish growth, the Bill quietly imposes on them yet another burden. I remind Government Members that fairness cuts both ways. It is not fair to tell people to save for their future and then tax them more for doing so, it is not fair to talk of fiscal responsibility when penalising prudence, and it is not fair to build long-term public finances on short-term revenue grabs.

There is a moral component to this, because women will be disproportionately affected. Many women, on returning from maternity leave, increase their contributions to cover for that career break. The proposals as drafted will result in those who plan responsibly being encumbered with higher additional national insurance charges.

[Torsten Bell]

I am reluctant to intervene, but I just want to pick up on two points that the hon. Member has just made. Men are much more likely to use salary sacrifice than women, so I offer him the chance to reconsider his last point about women being disproportionately affected. Before that, he said that the Bill meant that people were being encouraged to save but that they would be penalised if they did so. Given that there are members of the public listening who will make choices about their savings, I invite him to remind everyone that saving into their pension is still a very tax-advantaged thing to do. All Members on both sides of the House should encourage people to save into their pension, as the tax system will continue to do.

[Dr Shastri-Hurst]

The Minister is right that people should be putting into their pensions and we should encourage them to do so, but we should not put forward legislation that disincentivises that. In respect of women, it is a fact that they are more likely to take career breaks and, by virtue of that, they may want to make up their contributions. This legislation will disadvantage those individuals.

The salary sacrifice scheme has become the bedrock of the modern pension system in the workplace. By decreasing gross pay, it decreases employer national insurance contributions and allows firms to invest more in their people. That is a positive step. My fear is that, as a consequence of this piece of legislation, many employers may scale back those contributions, cut other benefits associated with work or even discontinue schemes entirely. If we want a country that values responsibility and rewards work, and in which people make long-term plans for their economic security, I am afraid that the Bill takes us in entirely the wrong direction.

Winter Fuel Payment

Debate between Torsten Bell and Neil Shastri-Hurst

Monday 9th June 2025 Commons Chamber

[Torsten Bell]

My hon. Friend raises the important issue of the complexity of pensioner poverty. I will just give one example, which does not get mentioned in these discussions often enough. The growth rate—the value people are getting; the returns on every pound saved into a private pension—absolutely needs to be as strong as possible. Private pensions support the living standards of our pensioners. We need a pension industry that is focused on driving the best possible value for savers.

[Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)]

There appears to be universal support for this damascene conversion by the Government. Last year, they told pensioners that the right course of action was to scrap the winter fuel payment for millions, but they are now telling them that a means-tested system is right, so how can pensioners possibly believe anything that the Government say?

[Torsten Bell]

Did we actually get a Conservative party policy there? Is the hon. Member saying that the Conservatives support today’s announcement? [Interruption.] That is a no. We do not have an answer yet, after an hour and 10 minutes, on what the Conservative party’s policy is. I can give him the answer that he would like: yes, we will provide certainty that this is the policy of this Government.