National Insurance Contributions (Employer Pensions Contributions) Bill

Baroness Altmann Excerpts

Report stage
Thursday 5th March 2026 Lords Chamber

We will discuss later, in other groups, the complexity this Bill could bring to payroll systems and HR admin. If you were to treat salary sacrifice on pension payments in the same way that national insurance is calculated, this would address many of the complexities that arose during Committee. I very much hope that the Government will accept Amendments 12 and 26 from the noble Baroness, Lady Kramer, but, if not, that they will consider my amendment as a fair and practical alternative for workers making pension contributions under salary sacrifice.

[Baroness Altmann (Non-Afl)]

My Lords, I first need to declare my interests as a non-executive director of a pensions administration company and as a board adviser to an auto-enrolment master trust. This is a very large group of amendments, and I thank the noble Baroness, Lady Neville-Rolfe, for her excellent introduction. The 15 amendments in this group cover a whole range of different issues, and I will try to be as brief as possible.

I start with Amendment 1, to which I have added my name, which seeks to tease out the Government’s actual policy on pension incentives. As the Minister and other noble Lords have said, around one-quarter of basic rate taxpayers whose employers are using salary sacrifice will be impacted. They will have lower take-home pay and/or lower pension contributions and, clearly, less incentive to pay more into a pension. Therefore, they have more risk of being poor in later life.

We still do not have an explanation for this limit being chosen, and the idea of limiting it to higher rate taxpayers makes enormous sense from the point of view of pension policy. Even a small number of people who are earning less than £30,000 will be caught by this. We have no explanation. I hope that the Minister might be able to help us understand where the £2,000 figure came from and why it is acceptable to hit the pensions and take-home pay of these lower earners.

Any proposal that we have heard over the years—and there have been many—for reforming the incentives for pensions have tried to suggest making the incentives for lower earners better. This Bill does the opposite. With a progressive tax system, using tax relief as an incentive mechanism will always give more generous relief to higher earners than lower earners who are on lower tax. At the moment, the availability of salary sacrifice helps to even that up a bit. If somebody is on a 20% tax rate, for every £4 they put into a pension, the basic rate tax relief gives them an extra £1. That is a 25% uplift. For a 40% taxpayer, for every £3 they put into a pension, tax relief gives them an extra £2. That is a 66% uplift. If you add in the 8% national insurance relief on top of the 20% basic tax relief, these lower or moderate earners will get a 38% uplift. If we take that away, they are back to 25%. I cannot explain how that is consistent with the Government’s aim of improving pension outcomes and helping lower earners or ordinary workers to have a better future. They will have lower take-home pay and/or lower pension contributions as a result of this policy. I understand that national insurance relief has always been a bit of an anomaly, but it is there, so taking it away makes things worse. Higher earners are only losing 2%. I hope that the Minister will look favourably on this amendment, but if the noble Baroness chooses to test the opinion of the House, I will support her.

Amendment 5 in the name of the noble Lord, Lord Leigh, to which I have also added my name, talks about the student loan problem and seeks to find a way to exempt students who are contributing more than £2,000 from higher repayments or lower take-home pay as a result of this policy. I would be grateful if the Minister could help us understand the impact on someone with a student loan who is paying more than £2,000 and will say what the Government’s proposals for mitigating are. If we do not have any such proposals, I hope the House will support the noble Lord’s amendment.

Amendment 12 and related Amendment 26 in the name of the noble Baroness, Lady Kramer, seek to address this problem in a different way by increasing the £2,000 limit to £5,000. These are both arbitrary numbers. There is no specific justification in the modelling of what pension contributions are in salary sacrifice schemes. My Amendment 13 was trying to raise the limit to £10,000, which would mean catching even fewer people but more higher earners. I accept that there is not enough support in the House for going as far as £10,000, which is the minimum contribution that the highest earners can make under the annual limit, but I would certainly support a change to £5,000.

On Amendment 27, which has just been spoken to by the noble Lord, Lord de Clifford, I understand the logic of trying to tie this to the national insurance upper earnings limit. I would support it, but I can see that the support is not widespread. In any case, adding this would make the whole administration system much more difficult to understand and complex. At least a round number of £5,000 is something that people can aim at and see whether they are over it.

The noble Lord, Lord Leigh, mentioned employers taking evasive action to avoid this before 2029. Will the Minister say what is the rush? Why, just a few weeks after announcing this, do we have this primary legislation which raises huge numbers of questions and poses such significant risks to the pension system? What evasive action can employers take? The most likely is that they will significantly reduce their pension contributions if they are not already at the minimum, or just stop salary sacrifice altogether because the costs of changing this system from the current salary sacrifice payroll provision and introducing new provisions will be significant.

This policy goes against everything the Government have rightly said they would like to achieve with their pension reforms. It makes the position of lower earners worse, it makes the pensions of lower earners worse, and it is likely to make overall pension provision worse throughout the economy. I hope that the Government might think again on some of these issues.

[Lord Fuller (Con)]

My Lords, I support Amendments 5 and 21 tabled by my noble friend Lord Leigh of Hurley, which rightly shine a light on the way in which this policy particularly benights graduates who are starting out in their careers. The Government have perpetrated the lie that the restrictions on salary sacrifice will affect only the fat cats, those with the broadest shoulders, whatever that means, the higher earners, another nebulous term, and certainly not hard-working families or those who are paid hourly. It is just not true. It is an example of Labour’s mis-selling, which is why I support Amendment 1 in the name of my noble friend Lady Neville-Rolfe. The Daily Telegraph reports that 3.3 million employees will be affected. The Times accuses the Government of wilfully obscuring the effects of their proposals on employees who are left behind after the real fat cats have run for the border.

By far the most affected group are youngsters at the start of their careers—graduates, people making a start on their working lives. They are already burdened by the Renters’ Rights Act 2025, which has driven up their rents, and the Employment Rights Act 2025, which has made it harder for businesses to take a chance on someone starting out. Graduate programmes have been bombed out by the jobs tax and dynamited by the rise in the minimum wage which reduces the incentive for employees to train up the newbies. Now we have a further insult and assault on Generation Z with the proposals of this slim Bill with fat consequences in an unthinking aggravation of intergenerational unfairness. Let nobody say that Labour is on the side of youngsters who want to get on. Even the OBR has twigged what we on these Benches have been saying for months: that the cumulative effect of all these issues is damaging incentives to work and harming those trying to climb the ladder to success.

At Second Reading, I gave the example of my daughter’s boyfriend who has a good job in the West End. He is no fat cat. He lives in a flatshare in Brixton with people he does not know, but his employer has recognised his hard work and, importantly, the value he brings to the business, so he was given a bonus of £17,000. Of that, he kept less than £6,000—a marginal rate of 71%—not just because of the tax, but on account of his student loan repayments. I do not know how it has taken so long for the OBR to realise that it does not pay to work. How much can these people be expected to bear? At least he had salary sacrifice to save for a pension for his future to reduce his reliance on the state in later life because, let us face it, employers are still shovelling cash into defined benefit schemes that are not even available to students who have to make do and mend with the less generous defined contribution arrangements instead, but even that has been snatched away by this Bill, as the noble Baroness, Lady Altmann, has so forensically exposed.

Taken together, these proposals risk salary sacrifice being taken away as a thing, which will damage employers and damage their opportunities to attract and retain the best talent because it will become just too complicated. As the Spectator’s leader last week asked, is it still worth going to university? When the world’s oldest magazine starts questioning the value of higher education, you have to wonder for our economy, our society, the future prosperity of our nation and what it says about aspiration in these islands. As somebody said last week, you used to get something from hard work, a reward for initiative, doing the right thing, but instead everyone is being beaten with a stick.

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[Lord Davies of Brixton (Lab)]

I want to contribute, by supporting the Government, a bit of sense to this debate. We have heard so much doom and gloom, but what is the reality? What impact are these measures going to have? I am sure my noble friend the Minister will be able to tell us.

The first point to understand is that salary sacrifice for pension contributions really makes no sense. It is a form of regulatory arbitrage. It has never made any sense and it is notable that previous Governments have taken away almost all forms of salary sacrifice on other in-work benefits, without forecasting the end of incentives for working. I have always been against it in principle—I would be happy to see it removed entirely, but possibly that might be politically suicidal—but a £2,000 limit seems an entirely reasonable approach to providing some fair incentive without the opportunity for, in truth, gross inequality. We are told that this measure hits the lower paid and not so much the higher paid, but of course the people who make most use of this are people with enormous bonuses. That is where the money is going and these measures will stop that.

Secondly, it is not an essential element in our current pension system. The key question that none of the previous speakers has addressed is: what is the right level of tax incentive for pension saving? That is a proper debate, and it cannot be answered by saying that more is always better. We have to draw up a fair judgment on where, and how far, tax incentives to encourage people to save for retirement should go. It is obvious that, if you reduce tax incentives, there will be an impact on people’s decisions. One impact that it might have is to encourage them to save more, because, if they have a target pension in mind, they will need to save more money than they did previously.

Thirdly, figures are quoted for the impact on individuals, particularly those under the higher-rate threshold. Well, I have a spreadsheet and I have calculated those figures, and, as I said at Second Reading and in Committee, the effect on basic-rate taxpayers on incomes around and above the median level is marginal. What sorts of figures do you think we are being told are going to have such a shattering effect on the pension system? For someone on median earnings, paying the median contribution rate, it is nothing. Maybe, if you earn a bit more towards the tax threshold, it will be something like £40 a year.

Now, nobody likes paying more tax. I could explain that the reason why there is this demand for more taxes is 14 years of mismanagement by the previous Government, but I will leave that to my noble friend. But it does annoy me that so much emphasis is placed on what is essentially a sideshow to the important questions of pension provision that we are going to have to address.

[Baroness Altmann (Non-Afl)]

As I think the noble Lord knows, I have enormous sympathy with everything he says, and there is a strong case for reforming and improving the incentives for low earners. However, does he not accept that, if you change for the worse the incentives on the people who earn least, for whom it is most difficult to contribute, there is bound to be an effect at the margin, however large or small the difference is? If your pension is giving you lower take-home pay because something you have is being taken away, that can have only negative consequences. Therefore, there are risks in this proposal as it stands.

[Lord Davies of Brixton (Lab)]

I thought I said in my earlier remarks that there will be a marginal effect: I accept that, although we do not actually know what that marginal effect will be. It is all hypothetical at the moment. One thing we do not know from the OBR figures is quite what the reaction will be and how people will adjust their behaviour between now and when this comes in.

I accept the noble Baroness’s point but, as I say, nobody likes paying tax and nobody wants to pay more tax. If you ask people whether they want to pay more tax they say no, but it has to fit in with the Government’s overall financial strategy.

Of course, only some people gain an advantage from salary sacrifice. Many private employers just do not offer it. The number is increasing all the time, which is part of the problem because it is increasing the cost. Nobody in the public sector benefits from salary sacrifice. We can, and will, have an interesting debate about public service pensions, but noble Lords should understand that it is unequal that people in the private sector can take advantage of salary sacrifice but people in the public sector cannot.

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[Lord Livermore (Lab)]

I am afraid I do not know what led the noble Baroness to believe that. That is not in any way my intention at this point.

As I was saying, 76% of those in their 20s who use salary sacrifice are protected by the cap, compared to half of those aged 30 and above. The Government do not believe that this Bill is the appropriate vehicle through which to amend the basis of student loan repayments—

[Baroness Altmann (Non-Afl)]

Can the noble Lord explain to the House why it is okay for those whose contributions are lower than £2,000 to get this special advantage of salary sacrifice, while those not lucky enough to have an employer with salary sacrifice should be denied it? The issue seems to be the salary sacrifice itself. The noble Lord is saying it is an anomaly, but the fact that people are getting it because their employer is using salary sacrifice and then you are taking it away does not make things fairer, as far as I can see.

[Lord Livermore (Lab)]

I think it does make the system fairer. We discussed this extensively at Second Reading and in Committee. The Government intend to make the system both fiscally sustainable and fairer, and I think that is exactly what we are doing with this legislation.

As I have said, the Government do not believe this Bill is the appropriate vehicle through which to amend the basis of student loan repayments. As the Prime Minister said last week, the Government inherited from the previous Government a broken student loan system, and we will look at ways to make that fairer.

I turn, finally, to Amendments 12, 13, 14, 15—

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[Baroness Altmann (Non-Afl)]

Can the noble Lord clarify a connected point: if somebody changes jobs within the year, does that mean they will start a new £2,000 accrual of the exemption?

[Lord Livermore (Lab)]

Yes, I believe it will, because it is per job.

I will make three main points in response to the amendments from the noble Lord, Lord Fuller. First, the changes proposed would impact only a minority of those in receipt of salary sacrifice. The vast majority of people using salary sacrifice undertake traditional employment on stable contracts: 85% have been in their job for over a year, 88% work full-time and 97% have a permanent contract.

Secondly, although the cap we are introducing will be based on each employment, the Government are committed to continuing to engage with stakeholders as we design the detailed operation of the cap and provide for it in secondary legislation. That engagement will enable us to test how different approaches affect those with uneven salary patterns and ensure that the policy is introduced in the least burdensome way.

Thirdly, on the point made in Amendments 2 and 18 on the pensions annual allowance, that allowance limits the amount of pension savings that can benefit from tax relief in any given year. It is set at £60,000 for the vast majority of individuals. The purpose of the allowance is to deal with exceptional or uneven patterns of pension saving, including one-off spikes or fluctuations in defined benefit accrual. It is specifically not designed to deal with day-to-day saving. The allowance also relies on individuals holding accurate records across multiple years in order to track eligibility and usage. That may be manageable in a pensions tax context, but it would be wholly unsuitable for a national insurance cap that must operate through real-time payroll systems. This also applies to other mechanisms proposed by these amendments that look to roll an allowance over multiple tax years.

For these reasons, the Government believe that introducing a carryover in this Bill would create significant complexity, and consequently administrative burdens, for individuals, employers and payroll providers.

I turn now to Amendments 4 and 20, tabled by the noble Lord, Lord Leigh of Hurley, and noble Baroness, Lady Altmann. I begin by setting out clearly that these provisions operate squarely within the existing framework of the optional remuneration arrangements, or OpRA rules, introduced in 2017. The Bill relies on that existing statutory concept rather than creating a new or expanded test. As a result, its reach is already constrained by well-understood boundaries that are routinely applied in both tax and national insurance contexts. Under that framework, the legislation is engaged only where remuneration is structured in a way that offers the employee a genuine alternative, typically between receiving cash earnings and receiving a pension contribution. It is that element of choice which brings an arrangement within scope. Where no such alternative is presented, for example, where pension contributions are made as a fixed and non-negotiable part of the remuneration package, those arrangements simply do not meet the statutory definition.

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[Baroness Kramer (LD)]

My Lords, this group has just two amendments: Amendments 8 and 11. While the former is just a paver for the latter, it is apparently required for Amendment 11 to go into the Bill. I make it clear that I am speaking in order to get the contents of my speech on the record; I do not intend to press either amendment, even though I think they are important.

It has been clear from the debate so far that the Bill fails to provide Parliament with the information it needs to assess the legislation. I am very glad that we have now passed the language on affirmative resolution. I also thank the Minister for giving us clarity now on how the cap operates: it is per employment rather than per employee. That is hugely important clarification.

Throughout the debates on the Bill, there has been confusion over the numbers and consequences. To get greater clarification, my former colleague and pensions expert, Sir Steve Webb, submitted an FoI request to obtain the numbers that can explain the conclusions of the Budget Red Book of November 2025 and the OBR’s supplementary analysis of 2026 as it refers to the impact of the Bill. Sir Steve’s request was answered in part, but key requests were refused. Therefore, I am trying to capture those requests in Amendment 11.

The amendment seeks the estimates used by HMRC of the number of basic rate taxpayers using salary sacrifice arrangements above £2,000; a similar disclosure for higher and additional rate taxpayers; the expected number of employers expected to reduce their pension contributions in each group; and the contribution to the revenue numbers in the Red Book from increases in employers’ NICs—and, separately, employees’ NICs—as a consequence of the Bill. With that information, we can make a reasonable judgment of the impact of the Bill on workers, employers and pensions, and get a grip on the likelihood of the revenue outcomes forecast in the Red Book, which at present look exceedingly doubtful, as others have said.

Sir Steve was not denied the disclosures he requested because they do not exist—quite the opposite. HMRC said in its letter to him, “We can confirm that HMRC holds the information you have requested. The reason for the denial is to protect the integrity of the policy-making process and to prevent disclosures that would undermine this process”. Apparently, transparency

“needs to be weighed against the public interest in avoiding the disclosure of information which may inhibit the decision-making process”.

The information—noble Lords have heard me list it—is not commercially sensitive; it does not deal with state secrets. We are not looking for transcripts on advice but simply for basic numbers that any person would require to assess the Bill. I begin to think that, if the numbers were shown the light of day, the policy might collapse. I greatly fear that we really should be aware of them, and I want to be sure that no regulation can be put in place until Parliament has seen and scrutinised this information. I very much hope that the affirmative action resolution we passed a few moments ago will help us do that.

This is simply a statement to the Government: they need to give Parliament the information and numbers it needs to assess a piece of legislation properly. Scrutiny is meant to be our job, and we cannot scrutinise if the appropriate numbers are not provided. I beg to move.

[Baroness Altmann (Non-Afl)]

My Lords, I have added my name to the amendment tabled by the noble Baroness, Lady Kramer. It would be helpful if the Minister could explain a little more about what the Government believe the intention and the outcome of this policy will be. He did not answer my question earlier on why there is a rush to get this measure through Parliament so fast. Have the Government quantified the extra employer costs of the higher 15% national insurance contributions from the employer, and the 8% or 2% extra national insurance contribution per member, and quantified it in money terms and in what it will mean for pension provision and future pensioner poverty?

[Lord Altrincham (Con)]

My Lords, I thank the Minister for listening so carefully, as ever, and considering the comments made by our Benches. The amendments in the name of the noble Baroness, Lady Kramer, are well written and would ensure that, before regulations are made to implement the cap, the Government must publish the relevant information on how many basic rate taxpayers are affected. The policy rests on a concept of excess savings—or at least tax advantaged excess savings—and it may catch a whole range of taxpayers who have insufficient savings.

It is very useful for us to tease out the difference between these two outcomes. That is possible only if we have much more information on the distribution impacts of the policy, which the Government should be comfortable sharing with us. As we debate this, we have heard a range of observations on who is affected. The noble Lord, Lord Davies, gave a colourful description of it affecting people with enormous bonuses. That is one perspective. The noble Baroness, Lady Altmann, reminds us that it goes against policy for very large numbers of people to have insufficient pension savings. In other areas of government policy, we are trying to rebalance that, so the policy is dissonant on pension savings. The Government should be open and happy to share this information with us.

As the noble Baroness, Lady Kramer, pointed out, the Government already have this information. That may well be sufficient evidence for us to appreciate that the incentives are rather marginal and that the gains could be rather small. Based on the numbers that we have had in the debate, the number of basic rate taxpayers who are supporting this policy would be quite small and the contribution would be extremely small to the tax take. It might be useful for us to reflect on whether it is worth destabilising pension savings for that purpose.

The noble Baroness has done a good job of setting out the rationale for her amendment. I do not want to intrude further on your Lordships’ House by repeating her arguments. These amendments are sensible and chime well with the amendments that we have tabled from these Benches, which would require the affirmative resolution procedure for most regulations. A debate on those questions will be greatly aided by the information that the noble Baroness has set out. We will be listening carefully to the Minister’s response.

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[Baroness Neville-Rolfe (Con)]

My Lords, Amendment 31 is in my name and that of my noble friend Lord Altrincham. I thank the noble Baroness, Lady Altmann, and the noble Lord, Lord Londesborough, for putting their names to it. I will also speak to Amendment 33 in the name of the noble Baroness, Lady Sater, a charity professional in the best meaning of the word. She is very sorry not to be here today. Her amendment is in the same spirit as ours, and she is right that the impact on charities is very important and should be kept under review.

His Majesty’s Official Opposition will continue to be a voice for small and medium-sized enterprises. We have heard, time and time again, from small businesses about the weight of burden that this Government continue to pile upon them—tax after tax, regulation after regulation. The Minister did not even answer my question at Question Time this morning about whether he would consider options for exempting SMEs from the burden of regulation. This amendment presents such an opportunity for the Government and would demonstrate that they listen; to show that they take seriously the mountains of complexity heaped upon small businesses and small social enterprises; and to provide some measure of relief and some acknowledgement publicly that these cumulative pressures cannot be ignored indefinitely.

The Minister suggested in Committee that only some 10% of employees in small and medium-sized enterprises have pension contributions through salary sacrifice that exceed the proposed cap. That may well be the case today, but with public awareness, more SMEs may introduce it. We on these Benches would like to see that figure grow, as saving for a pension is one of the most desirable and cost-effective methods of saving, as I am always explaining to the next generation. Salary sacrifice is also one of the few tools available to a small employer competing against a large corporation for talent and productive workers.

An independent review over a year would allow us all to consider the impact of the changes on SMEs and charities. I beg to move.

[Baroness Altmann (Non-Afl)]

My Lords, I have added my name to Amendment 31, and I support Amendments 32 and 33. All these amendments seek to help the Government to recognise that there is a serious impact if this Bill goes through as currently proposed, particularly on employers in smaller and medium-sized companies. I believe that the Minister confirmed that some 99% of employers in auto-enrolment are SMEs. The costs of complying with pension auto-enrolment have already been significant. Some of those employers have been advised that it is a “no-brainer” for them to use salary sacrifice as a way of mitigating some of the extra costs involved in having to provide pensions for their staff who want to stay in them.

We have imposed these extra costs on employers already; some employers have been good enough to put in more than the auto-enrolment minimum. What this Bill would do is to pile extra costs on to them, because if they are using salary sacrifice, they will have to renegotiate employment contracts, change payroll software systems, change the information that they give to their workforce about their pension arrangements and answer lots of questions that are bound to arise as a result of any of the changes that are proposed.

It should therefore be incumbent on the Government—indeed, it is quite astonishing that this was not already done before we got the legislation—that there is a proper, independent review of the costs imposed on smaller and medium-sized employers as a direct result of this legislation. That should inform the way in which the legislation is implemented, so that we try to do whatever we can to avoid the kind of problems that we have seen, where there are implications for employment levels, salary levels and indeed for pension investment and provision as an unintended consequence of perhaps well-meaning legislation, or legislation designed to hit an entirely different target, that is potentially going to fall on both employers and their workforces. We have seen that the extra national insurance costs have had an impact on employment levels already. I ask the Minister again: what is the rush in getting this legislation on to the statute books before we know its implications and what it will mean in practice for the corporate sector? First, can the noble Lord explain the rush and, secondly, consider putting this on hold until the full implications are better understood?

[Lord Freyberg (CB)]

My Lords, I rise to support Amendment 31. It is of particular relevance to the creative industries and would require an independent review of the Act’s impact on small and medium-sized enterprises within 12 months of its passing. It would specifically require that review to examine the impact on those with “irregular remuneration”, “seasonal working patterns”, or “multiple employments”.

That language almost exactly describes the working pattern of a freelance editor, a set designer or an editor moving between short-term contracts across a year. Many of the production companies, commercial houses and independent studios that engage those workers are themselves SMEs. Amendment 31 would ensure that Parliament receives evidence of how the Act operates in practice for both the workers and the businesses that depend on them. I therefore urge the House to support it.

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[Lord Londesborough (CB)]

My Lords, I have added my name to Amendment 34 from the noble Lord, Lord Ashcombe, and I offer my support. It is entirely pragmatic. I would also throw into this documentation reservoir the OBR’s forecasts, which I found quite confusing in relation to the impact of the Bill. What is being suggested in this amendment does not apply only to the National Insurance Contributions Bill, and many of us as parliamentarians—certainly I as one—find the paperwork around Bills often baffling and confusing, and to bring this together in a far more coherent way would make us better legislators. But let us spare a thought for the CEOs, the finance directors and the CFOs, two of whom have come to me and asked me to explain how the Bill is going to impact their businesses, and I struggle to do so.

As many noble Lords know, I am a bit of a productivity disciple and our productivity in this area is really poor. Part of the reason for that is that the publication of relevant documents is so scattergun. If you do not have a legal training, as most of us do not, it is a challenge not just in terms of legal language but often in numeracy. In Committee, we often found that we did not know whether the Bill applied per person or per job. We now have a clarification, for which I thank the Minister. But that is pretty damning in itself, is it not?

So I wholeheartedly support this. There is no controversy. I think Governments of all colours need to do a far better job of explaining the thrust of their legislation.

[Baroness Altmann (Non-Afl)]

My Lords, I rise briefly to speak to my Amendments 35 and 40 in this group, which seek to do similar things in different ways from the other amendments in this group, all of which I support. I certainly think that the suggestion from the noble Lord, Lord Ashcombe, on the publication of relevant documents and reports makes significant sense, and having a repository of information would certainly be helpful.

This group of amendments is yet again trying to help the Government see that they are premature in laying the legislation and there is not enough understanding of what the impacts in practice will be for employers and workers. In Amendment 35, each area on which I ask for an independent report to be produced is itself a complex area of pensions administration that needs to be understood before we make the kind of change that sounds simple but in practice will be anything but.

It sounds as if it will not make much difference, but in practice, it could cost significant sums to employers, as well as having this significant potential impact on making pension provision worse across the country. At the very time when we are talking about perhaps making state pensions a bit less generous or delaying the age at which they will start, it makes private pensions even more important for anyone in poor health who cannot wait until the ever-rising state pension age. The idea is for them to have something to fall back on to bridge the gap, at least.

I hope the Minister, for whom I have enormous respect and who I know is very well intentioned and understands these issues, will take back to his department the deep unease across this House at the lack of preparedness and information that we have been given. Once again, could he help explain—and if not today, perhaps he will write to me—the seemingly inordinate rush, within just a few weeks, to bring in this legislation, which is not due to start until 2029, so that we have a better understanding of what the Bill’s impacts would be?

[Lord Freyberg (CB)]

My Lords, I support Amendment 35 in the name of the noble Baroness, Lady Altmann, which would require the Government to commission an independent review within 12 months of passing the Act, covering a comprehensive range of impacts. Among the items it would have to consider are, explicitly, “workers with multiple jobs”, and

“workers who change jobs during any tax year and have made pension salary sacrificed contributions”.

Those two categories define the working life of a freelance creative. The Government’s answer throughout the Bill has been that these questions will be resolved in regulations. Amendment 35 would at a minimum ensure that Parliament sees independent evidence of whether that resolution has worked in practice.

Amendment 40, also in the name of the noble Baroness, Lady Altmann, would go further and make commencement conditional on a review of the Act’s practical feasibility. Given the complexity we have heard about and that I have described for workers with mixed employment statuses, including those engaged by the BBC under off-payroll rules while simultaneously working for other employers, that is not an excessive precaution. Therefore, I support both these amendments.

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[Lord Livermore (Lab)]

My Lords, I am grateful to noble Lords for their contributions to this debate.

Amendments 35, 37 and 40, tabled by the noble Baronesses, Lady Neville-Rolfe and Lady Altmann, and the noble Lord, Lord Altrincham, cover the impact of the future Act on pensions adequacy and on pension-saving behaviour and participation. As I have already set out, the Government agree on the importance of transparency, and a number of documents have already been published that set out the impacts of this measure.

I turn to the principled point raised about the impact of this policy on pensions adequacy and savings behaviour more specifically. As we discussed in Committee, salary sacrifice existed in the 2000s and early 2010s, yet there were falls in private sector pension saving during that period. The key factor that has led to an increase in saving in recent years is automatic enrolment. As a result of that, over 22 million workers across the UK are now saving each month.

Although we all share a commitment to improving pensions adequacy, many groups at highest risk of undersaving, including the self-employed, lower earners and women, are not the most likely to benefit from salary sacrifice. Only one in five self-employed people saves into a pension but they are entirely excluded from salary sacrifice. Low earners are most likely not to be saving, but higher earners are more likely to be using salary sacrifice. Many women are undersaving for retirement, but many more men use pensions salary sacrifice. The pensions tax relief system remains hugely generous and there remain significant incentives to save into a pension. The £70 billion of income tax and national insurance contribution relief that the Government currently provide on pensions each year will be entirely unaffected by these changes.

Amendment 38, tabled by the noble Baroness, Lady Kramer, would require the Government to lay before Parliament a formal review of the Office for Budget Responsibility’s supplementary forecast information release of 5 February 2026, and specifically its analysis of behavioural responses by organisations to the provisions in the Bill. The OBR’s economic and fiscal outlook and its supplementary forecast publication set out how behavioural responses have been considered in certifying the costings. A summary of these behavioural assumptions was also published in the policy costing note accompanying the Budget. The supplementary forecast information was drawn from analysis and data—

[Baroness Altmann (Non-Afl)]

It would be helpful to have on record some idea of who is responsible, when talking about behavioural response, for reporting to HMRC and for compliance, and who will face penalties for any national insurance contributions that are due which were wrongly deducted. Is it payroll providers? Is it employers? Is it the members? If any of those groups are on the line for paying penalties, would not the limit itself perhaps put paid to salary sacrifice? Is that something that the Government have considered?

Palestine Statehood (Recognition) Bill [HL]

Baroness Altmann Excerpts

2nd reading
Friday 14th March 2025 Lords Chamber

[Baroness Altmann (Non-Afl)]

My Lords, I share the desire for peace of the noble Baroness, Lady Northover, and so many other noble Lords who have spoken today, and have always hoped for a two-state solution. The only party which has never accepted the idea of a Palestinian state alongside Israel is the Palestinians themselves. Israel was attacked by its neighbours right from the word go, and has been attacked again and again ever since, with the intent to wipe the Jewish state off the map. Israel has offered peace. It has given up land for peace. It still seeks peace—but with whom?

As the noble Lord, Lord Katz, said, timing is everything. At this moment, a Palestinian state within the pre-1967 borders is a fantasy, especially given the realities of the last few decades. Doing this now would be a reward for the jihadis, Islamists and extremist leaders of the Palestinians in Gaza, and their masters in Iran. They do not accept any borders; they want Israel from the river to the sea.

Those who chant the slogan on our streets every week are effectively calling for no two-state solution; they are calling for Israel to be eradicated. Also, in practice, the pre-1967 borders—originally accepted by Israel, of course—proved an unsustainable geographical dividing line, leaving Israel completely vulnerable to invasion and annihilation. Has the Minister been to the Golan Heights, for example, to see the complete overlooking of Israeli towns, leaving them wide open to murderous attack?

If the intention is to satisfy Palestinian demands for statehood, which I truly wish were possible, can the Minister—or other noble Lords—point to any evidence of their willingness to live in peace next to a Jewish state? If none is given today, perhaps the Minister would write to me: I would be grateful.

Hamas wants to wipe Israel off the map; nothing less would suffice. Both the Palestinian authority and Hamas reward their citizens for murdering and attacking Jews. They teach their children to want to kill them and that Israel has no right to exist. A Palestinian state will turn out the same as the post-2006 unoccupied Gaza. Israel withdrew unilaterally, dismantled the Jewish settlements established there, and what happened? The Palestinian leadership spent billions on building tunnels from which to attack and kill Israelis. Intifadas and suicide bombers killed Israelis.

They spent years preparing for 7 October: to torture, rape, kill and kidnap Israelis. They particularly targeted Israelis like me, who most wanted to live in peace with their Palestinian neighbours and who had spent their lives helping Palestinians, ferrying them to Israeli hospitals for treatment, employing them in their homes and engaging with them as friends and neighbours. The very people who wanted a two-state solution have now started to lose faith in it. The right reverend Prelate mentioned the absence of a peace process, but peace is not a solo. If one side does not seek peace, we would just be repeating past failures.

This Bill, if passed, would be a licence for further terrorism, I am afraid. It would be a signal that deliberately torturing and murdering Jews, promising to do it again and again, then hiding safely in tunnels under or behind your own civilians and knowingly, cynically, inviting retaliation from those you have attacked, will bring rewards from civilised countries whose emotions you have deliberately manipulated.

I know the noble Baroness wants to see peace—so do I—but I fear that this Bill will take us further away from that goal.

Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Altmann Excerpts

Committee stage
Tuesday 14th May 2024 Lords Chamber

[Lord Palmer of Childs Hill (LD)]

My Lords, I support Amendment 27. The Bill has effects that were not thought of in advance. Local government pension schemes and their administrators have one thought in mind, which is to protect the financial interests of the pensioners and of the funds, and this amendment just clarifies the financial aspects of that. The administrators should not be involved in any international political situation, but be there to look after the funds of the pensioners. Amendment 27 does exactly that in clarifying, which is all it is doing, what this aspect of the Bill does. Therefore, I support it from these Benches.

[Baroness Altmann (Con)]

My Lords, I rise briefly to congratulate the noble Baroness, Lady Drake, on her amendment and the others in the group. I understand where they are coming from, but it seems to me that the Government’s argument that this issue is already encompassed in “financial impact” holds some sway. There are concerns that I understand, but I am not sure they are necessary. Indeed, sight should not be lost of the fact that all local government pension schemes are ultimately underwritten by the Government and taxpayers. If the stewardship of these assets were swayed by issues which the Government themselves might not be comfortable with, there are powerful reasons why that stewardship should not be swayed by the kind of considerations that the Bill seeks to ensure does not happen.

Political or moral disapproval is not the same as environmental, social and governance issues. If a board of trustees decided to boycott an investment because of the country in which it is located, based on judgments of that country which do not accord with the views of the elected Government, the duties incumbent on the Government in accordance with this Bill would be at risk. That someone might take legal action against trustees who decide that they do not wish to make certain investments because they make a political or moral judgment that is not in accordance with that of the elected Government could equally be argued the other way. Trustees, certainly local government trustees, should not be taking these decisions.

I believe that was the manifesto commitment. Private pension schemes are not part of government and therefore that is a different decision, but local authority pension assets are ultimately underwritten by government so, should there be concerns about material financial risk and impact, they ultimately rest on the Government’s underpinning them anyway. Given that, as my noble friend said, “financial value” already encompasses these issues, I am relaxed about the current wording of the Bill. I hope that noble Lords across the Committee, especially those who have worked so hard on pension issues and with whom I normally fully agree, will not be too uncomfortable with the explanations that I am trying to put forward for not using pension assets as a disguised tool for political or moral judgments in the way that could happen and which this Bill seeks to deter.

[Baroness Janke (LD)]

My Lords, I support the amendments in this group and will speak to Amendment 45, which I have signed. This amendment would remove “management” from the definition of a fund investment decision, allowing investors to carry out stewardship activities, including engagement and voting, without falling foul of the prohibition and enabling vexatious legal challenges.

Clause 12, on application of prohibitions, applies Clause 1 prohibitions to the LGPS. It includes acquisition, retention, management or disposal of assets in its definition of fund investment decision. However, advice from the LGPS identifies “management” as pension scheme stewardship—engagement with or seeking to influence the companies and sometimes Governments in which it invests and voting at annual general meetings. Without this amendment, local authorities would be open to legal challenge for statements made during engagement with the companies in which they invest or to votes against them at AGMs, should interested parties wish to argue that these were influenced by political or moral disapproval of a foreign state.

I hear the arguments put forward by the noble Baroness, Lady Altmann, but the breadth of the Bill means that there is an opportunity for interested parties to use the moral and political disapproval of a foreign state as a way of challenging decisions that they do not agree with. The concern is that many will choose to take that view—and the Bill allows them so to do—on risks, for example, connected with a company’s purchases from a certain market, such as the use of forced labour in China, or investment in fossil fuels, which are becoming more financially risky. These could all be interpreted as disapproval of a foreign state or moral or political disapproval and thereby attract interested parties to challenge via judicial review and the quasi-judicial review process introduced in Clause 5.

Furthermore, foreign Governments have large stakes in listed companies, so concerns about any aspects of those companies could be litigated on the basis that they were influenced by disapproval of a significant fellow investor. With such a threat of litigation, it is easy to see how advice and full and frank discussion of decisions could be severely restricted. Having been a member of a local government pension scheme, I understand the need for advisers to be able to give frank advice without fearing that their words may be used later in legal action.

--- Later in debate ---

[Lord Davies of Brixton (Lab)]

I have made no secret that this is a bad Bill that is badly drafted, and I spoke against it at Second Reading. In this debate, my suggestion that we should not agree Clause 12 is narrowly focused.

Local government pension schemes should be treated in exactly the same way as every other funded occupational pension scheme—the point made by my noble friend Lady Blackstone. I agree totally with the amendments tabled by my noble friends, and I certainly support their proposals, but my question is: do we need separate legislation to cover the local government pension schemes? My strong view is that we do not; the schemes should all be treated the same. They should come under the same rules as the fiduciary duties on trustees or committees —whoever is responsible for taking the decisions—and they should be the same across the board.

I tabled my clause stand part notice just to ask what the effect would be of not having this provision. Would it mean that I achieve my objective and that, should the provision be removed from the Bill, the local government pension schemes would be treated like other pension schemes? I suspect not. I suspect that I would need a more detailed amendment that would place local government pension schemes under the same responsibilities and law as occupational pension schemes more generally. That is my objective, and I hope that we can have this debate again on Report so that all pension schemes are treated the same.

I listened carefully to the remarks from the noble Baroness, Lady Altmann, but I think her argument fails. First, there are private employers whose employees are within the local government pension scheme. Equally, there are public bodies whose pension schemes are not covered by this legislation, most obviously the universities superannuation scheme. So the division between the sheep and the goats in this respect is arbitrary. There is no consistency about—

[Baroness Altmann (Con)]

The noble Lord and I usually agree on so many pension issues—in fact, almost all of them. However, would he not agree that the fundamental difference between the local authority pension schemes and private schemes, or indeed the universities super- annuation scheme, is that the local authority pension schemes do not belong to the Pension Protection Fund and do not pay levies to it, and are therefore effectively underwritten by central government, not by local government? If a council goes bust, it is rather difficult to imagine that the burden of paying the pensions promised to local authority workers would not fall on government itself. That is indeed the reason why these schemes are not part of the Pension Protection Fund, and indeed do not pay any kind of levy. For me, that is a powerful reason—I would be grateful to hear the noble Lord’s view—why there should be a differentiation between those schemes and all other schemes. Typically, there is not, but that misses an important part of this debate.

[Lord Davies of Brixton (Lab)]

I am afraid to say that it is not that simple. Technically, the history is that the funds established by local authorities to pay the pensions of their employees were there to protect the ratepayer rather than the members. That is the history of it, but I think we have moved on from that. Certainly, the members of these schemes believe that the money they have paid is there for their benefit. What would happen if a local government pension fund were unable to pay the benefits that were due is actually an open question. There is no explicit government guarantee for the local government pension scheme.

In addition, under the present provisions of the cost-sharing enforced by the Government on the Local Government Pension Scheme, it is the members who are the residual fund source of any shortfall in money. If there is a shortfall in the Local Government Pension Scheme, the contribution from the local authority is capped; it is the members who will lose out by having to pay higher contributions or seeing their benefits reduced. It is not a simple matter of “The Government will always make things good”. Initially, the members have to make things good. If the members cannot afford it, I suspect that it is right that the Government will step in—but that is not in the rules, so there is a contingent possibility there. So the situation is far less clear-cut than the sheep and goats I identified earlier.

Of course, this all comes about because technically, I think, under present law, the administration of the Local Government Pension Scheme comes under the aegis of a public body or public authority. I am not really sure what the difference is between the different terms under the Bill. But that is not how it is perceived by scheme members. They do not see their pension scheme as being a public authority, and we should respect that. As I say, my central thought is that local government pension schemes should be treated like all other occupational pension schemes.

--- Later in debate ---

[Baroness Altmann (Con)]

What is the noble Lord’s view, given this fundamental difference between local authority pension schemes and all other pension schemes except unfunded ones? They do not belong to the Pension Protection Fund, have no protection in that regard whatever and do not pay a levy to the Pension Protection Fund. Therefore, ultimately does he believe that these would not be and are not in any way underwritten by Government and Parliament? Why would they be excluded?

[Lord Collins of Highbury (Lab)]

My noble friend Lord Davies responded to that point. The reality is that there is nothing explicitly guaranteeing them. The Pension Protection Fund is not that old. I remember companies going bust and shareholders and other people getting the money and workers losing their pensions. You have only to look at Mirror Group Newspapers to see what can happen there. We want a common duty and responsibility. This Bill undermines that. That is the point that my noble friend Lord Davies was making. It is also the point that my noble friend Lady Drake is making. There are common principles. We do not want the creation of uncertainty when trying to implement a manifesto decision. I have repeated my plea to the Minister to sit down with us and work out a better way of implementing this manifesto commitment. This Bill is not doing that job and I have yet to meet a member of the Conservative Party who believes that it does. We need to sort this out.

Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Altmann Excerpts

Committee stage
Tuesday 7th May 2024 Lords Chamber

[Lord Etherton (CB)]

I support Amendments 18 and 29, tabled by the noble Lord, Lord Verdirame, to which I have added my name. In view of what has been said in detail by the noble Lord, Lord Verdirame, and the noble Baroness, Lady Noakes, I can be very short.

Put very simply, the international law exception in the Schedule, as currently worded, leaves entirely to the relevant public body the right to reach its own conclusion as to whether a failure to boycott or a positive decision to make a procurement in relation to the foreign state would place the UK in breach of its obligations under international law. This is contrary to the Government’s own policy in paragraph 6 of the Explanatory Notes that the obligations under international law relevant to a BDS decision must be determined by the Government and not by individual relevant bodies. As we all know, many aspects of international law derived from numerous sources can be highly contentious. One has only to think of disagreements expressed in this House over the past few years on the proper meaning and effect of the refugee convention and the European Convention on Human Rights to see that that is so.

Paragraph 6 of the Explanatory Notes states that decisions of public policy about procurement and investment based on political or moral disapproval of a foreign state are permitted only if the decision is,

“positively consistent with the UK’s foreign policy”—

I emphasise—

“as determined by the Government”.

The Minister, in response to me on Second Reading, was not entirely consistent in relation to this matter. She said:

“This exception is necessary to ensure that public authorities are not forced to make a decision which could put the UK in breach of its obligations under international law. Public authorities cannot have their own subjective views on what constitutes a breach of international law”—


which is fair enough. She continued:

“They must reasonably consider the decision relevant to the UK’s obligations under international law”.—[Official Report, 20/2/24; col. 595.]


Therefore, there is an insertion there of “reasonable consideration” but no reference at all to the Government’s policy stated in the Explanatory Notes that foreign policy is to be determined by the Government and not by individual public entities.

In short, we simply cannot have disputes before our domestic courts about the proper meaning and effect of international law sources relevant to decisions under the Bill going through the High Court, the Court of Appeal and the Supreme Court at great cost to the public as well as, of course, to the ratepayers and the council tax payers of the relevant body.

[Baroness Altmann (Con)]

My Lords, I will briefly support the two amendments, one from the noble Lord, Lord Verdirame, and the noble and learned Lord, Lord Etherton, and the other from my noble friend Lady Noakes and the noble Lord, Lord Pannick. I urge my noble friend the Minister to consider carefully the purpose of these amendments.

I completely support the Bill and I am grateful to the Government for bringing it forward, although I recognise that not all noble Lords will be of the same mind as myself. However, I stress that using a test such as that proposed in paragraph 6 of the Schedule, as to whether the decision would place the UK in breach of its obligations under international law, is problematic.

Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Altmann Excerpts

Tuesday 7th May 2024 Lords Chamber

[Lord Wolfson of Tredegar (Con)]

I am looking at the time. I am happy to continue this conversation elsewhere, but I will say this: I would be happy if Clause 3(7) encompassed not only Israel and the Occupied Palestinian Territories but the Palestinian Authority, because I do not want anybody using divestment or boycotts as a lever in the Middle East. We should all be working for peace, and we do not work for peace through BDS. I hope that the Opposition will reconsider their position but, in the meantime and with apologies to the House for overstaying my welcome a little, I support the Bill as drafted and therefore oppose the noble Lord’s amendment.

[Baroness Altmann (Con)]

My Lords, I support the remarks of my noble friends Lady Noakes, Lord Leigh and Lord Wolfson. This amendment would be deleterious to the Palestinians themselves. I cite the example of SodaStream, which had to close down its factory in the Occupied Territories at a loss of 600 Palestinian jobs because of the BDS movement; it was a particular factor. I shall quote two people who worked there. Ali Jafar, a shift manager from a West Bank village, said:

“All the people who wanted to close”


it

“are mistaken … They didn’t take into consideration the families”.

Anas Abdul Wadud Ghayth, who had worked there for four years, said, as he wiped tears:

“We were one family. I am sad because I am leaving my friends who have worked here for a long time”.


I am not in favour of settlements. I certainly believe that Israel has offered many times, and would offer again, to get out of territory that is currently occupied in exchange for a genuine peace deal. It has tried and would try again. Currently, there is perhaps a different mindset among those leading the country, but that is not necessarily permanent. At the moment, these territories are part of Israel. They are not necessarily permanently part of Israel, and I believe that they would ultimately be given up or exchanged in return for a genuine peace deal.

Currently, however, it is occupying them and providing jobs for Palestinian people who want them and could not find gainful employment otherwise. That was confirmed when, for example, the SodaStream factory shut down. From a security perspective, if Israel were to give back to the Golan Heights, it would be signing its own death warrant. You will know that if you have been to that area and seen what is there. Equally, with the Occupied Territories on the West Bank, I believe there is potential for a two-state solution that recognises both sides’ right to exist, but Israel needs a partner that is willing to recognise its own right to exist. This Bill is designed to protect, in the meantime, both Israel and the jobs being created in those territories.

However, like my noble friends, I have the most enormous respect for the noble Lord, Lord Collins, who I think genuinely wants to find a way to work through this and a wording that will let us deal with this issue in a way that is acceptable to all sides. I have no problem with that, and I hope we might have some meeting of minds, through which we can move forwards and try to achieve the aims of the Bill without offending noble Lords, on all sides. I have enormous respect for the noble Lord, Lord Warner, as well, who I have worked with in the past. Whether or not we agree on this issue, I hope that noble Lords can see the points I am trying to make about the things I believe the Government are trying to achieve.

[Baroness Blackstone (Lab)]

My Lords, the noble Baroness paints a very rosy picture of the West Bank. From all my experience of being there, it is totally unlike what she is describing. There may be some factories employing Palestinians that have been closed down, but thousands of Palestinians have lost their livelihoods as a result of the settlements and the Israel Defense Forces promoting violence, and certainly allowing violence, by settlers against ordinary Palestinian farmers, who have lost their olive orchards and the land where they were growing grapes. I just do not believe she can have spoken to many representatives of Palestinian people, who are utterly miserable as a result of the Israeli occupation. To say that it is part of Israel—that is simply, legally, not the case.

Lastly, I want to challenge the noble Baroness on the suggestion that the Israeli Government are in favour of a two-state solution—on the contrary. The noble Baroness said just now that she is in favour of a two-state solution, as are many other people, and that she believes it will happen. If it is to happen, there has to be a complete change in tone and views by the Israeli Government. Successive Israeli Governments have done nothing to promote a two-state solution. On the contrary, they have done many things to make it impossible, through the constant building of settlements. It is not that they happened a long time ago; they continue to be built all the time.

[Baroness Altmann (Con)]

May I, with all due respect, clarify a few points for the noble Baroness? First, I understand that the current Israeli Government are not in favour, and I have said myself that I am not in favour of the settlements. I am in favour of a two-state solution, and always have been. Past Israeli Governments have offered a two-state solution and offered an exchange of land for peace time and again. I am not sure why the noble Baroness is shaking her head. Israel withdrew from Gaza itself without even an offer of peace from the other side, and this is where we have ended up.

I have great respect for the noble Baroness, and one can always hear two sides to any argument, but there are a large number of Palestinians who welcome the employment they have in those territories. There are others who may have a different view, but in the end, the only solution, as far as I am concerned, must be a two-state solution. The noble Baroness is ignoring the fact that the other side, whether it is the Palestinian Authority or Hamas, is intent on wiping Israel off the map. It is not interested in a two-state solution. Israel would offer, and has offered, a two-state solution. As I say, I have spoken to people on both sides, and I hope the noble Baroness might be able to meet some of the others I have met, who have a different view, clearly, from the ones she has spoken to.

[Lord Leigh of Hurley (Con)]

Before the noble Baroness sits down, I am sure she will agree with me that violence by settlers or Palestinians has to be condemned without reservation, and the full force of the law used against such perpetrators.

--- Later in debate ---

[Baroness Altmann (Con)]

I completely agree. I do not agree with the settlements, and I do not agree with the actions of the settlers. But that does not in any way change the situation we are dealing with here, which is that until there is a two-state solution, some partnership for peace and some agreement, the idea of boycotting, whether the Occupied Territories or Israel, will do damage both to Israel and to the Palestinians who are gainfully employed there. That is the point I was trying to make, not to defend the settlers or settlements.

[Lord Sentamu (CB)]

My Lords, third time of asking. First, I stand here as somebody who still mourns the death, the assassination, of Yitzhak Rabin, a great statesperson who was on the cusp of finding a solution that has evaded many people. I also mourn the loss of Rabbi Jonathan Sacks. I was a great student of his; he taught me Hebrew and how to read the Hebrew scriptures. Also, before he died, he planted nine trees in Israel for me, so I have a little plot of land where those nine trees are.

What would he say about Clause 3(7)? I agree with the noble Lord, Lord Hannay; I am not sure that it is wisdom that, unfortunately, has included Israel in the clause. I know it is differentiated, as the noble Lord, Lord Wolfson, has told us; we then have in paragraphs (b) and (c) the Occupied Territories and the Occupied Golan Heights. I just wonder what it is that is being asked of us. Legislation, at the heart of it, is a statement of public policy. What public policy are we doing with subsection (7)? What are we saying? I have never believed that you can use statute as a way to give assurance, because when the law is passed, it is already dated, so it may never actually deliver what you want. I am not so sure that these three paragraphs are a wonderful opportunity; is there not a better way of saying what you want?

I totally agree that, as the noble Lord reminded us, this differentiation is made because Israel comes up more than any other country in the world. What is it that drives that? Of course, being a Christian, I cannot say, but given the Second World War and the Holocaust, you have to have a heart that tells you, “Be very careful that you do not tread on holy ground”.

I am reminded of another great name who influenced me greatly on issues such as this: Rabbi Hugo Gryn, who was asked by a child on the radio, “Where was God in the Holocaust? Why wasn’t he there? Why didn’t he defend them?” Like all good rabbis who know the Torah, he gave the most beautiful answer: “In Auschwitz, God was being blasphemed and violated. The real question is, where was humanity, made in God’s image and likeness?” The question is, will our humanity find itself better in this subsection (7)? I am very doubtful, the way it is drafted, because it conflates two pieces of land, and I am not sure that is a very wise thing.

Economic Activity of Public Bodies (Overseas Matters) Bill

Baroness Altmann Excerpts

Wednesday 17th April 2024 Lords Chamber

[Lord Collins of Highbury (Lab)]

Let me start by making it clear, if it is necessary, that the Opposition do not support BDS—we made that clear at Second Reading—so my contribution tonight on this group of amendments is about the environment and the exceptions to it. Of course, currently the Bill does not prevent a decision-maker taking environmental misconduct into account. Environmental misconduct is defined as

“conduct that … amounts to an offence”

that causes

“significant harm to the environment”.

As the noble Baroness, Lady Jones, said in introducing her amendment, this is quite a narrow exemption. It relies on UK decision-makers being able to be confident as to whether an environmental practice constitutes an offence in the UK or another country. There is no mention of climate change or the need to invest and to make procurement decisions proactively to protect the environment. Unfortunately, my noble friend Lord Dubs, who I know was very keen to address this point, cannot be with us.

Amendment 32C would provide that the Bill does not prevent a decision-maker taking into account the climate crisis and the need to achieve the Paris agreement goal or other climate change goals when making decisions. The Paris agreement goal is to hold the increase in the average global temperature to below 2 degrees Celsius above pre-industrial levels, which is a critical threshold. The amendment mirrors the language that is already in statute in the Pensions Schemes Act 2021. The Government included climate change provisions in that Act to require, as the Minister said at the time,

“occupational pension scheme trustees and managers to secure effective governance on the effect of climate change on the scheme”.—[Official Report, 26/2/20; col. GC 156.]

During the debates on those matters, Members of this House spoke of the need for pension schemes not only to consider the financial risks of climate change but to play an active part in combating climate change and achieving the shared international goals, so it is a proactive approach.

One of the fundamental problems we have constantly been addressing in this Bill is whether people will be too cautious: will the Bill have a chilling effect on investment and procurement decisions that we proactively want people to take? We have, on the one hand, legislation that requires pension scheme managers to consider the financial implications of climate change and the transition to a low carbon economy; on the other hand, we have this Bill, which makes no mention of climate change and which, through overly broad drafting, risks limiting what public bodies and local government pension schemes are able to take into account when making decisions.

Sadly, the noble Lord, Lord Willetts, is not in his place. What we have to be clear about is the unintended consequences of this legislation. We have to be careful about where it could lead, because future Governments may not be so proactive in supporting efforts on climate change. We have to be careful because this legislation, which empowers the Secretary of State, could be incredibly dangerous.

The Local Government Association has raised questions about how this Bill sits with local government’s existing procurement practices and its ability to take environmental, social and governance issues into account. I hope the Minister will agree that combating climate change, including considering a country’s environmental policies, conduct and record, should be a crucial part of decision-making on public procurement.

In her introduction, the noble Baroness, Lady Jones, also raised the key issue of the ability of public bodies to be free to avoid investment in fossil fuels. That is a critical area, as extraction of coal and other fossil fuels is often part of government strategy and often controlled by Governments. Could this Bill be interpreted in a way that will stop those sorts of proactive, positive investments that the Government, the Opposition and most people in this country think are right? That is the problem I hope the Minister will be able to address. Fossil fuels are a controversial issue that people have taken very polarised views about; we need to be clear about the consequences of this legislation.

I did not see this group of amendments as being about BDS, but about how we support positive policies on the environment and how the Government intend to ensure that this legislation does not have a chilling effect on the very things they seek public authorities and public bodies to do. I hope the noble Lord will be able to address these specific points.

[Baroness Altmann (Con)]

My Lords, may I make a brief intervention? I did not realise that Back Benchers were not continuing to debate, so please forgive me. I have a brief point on this group of amendments and, in particular, the speech from the noble Lord, Lord Hain, on his Amendment 15. I have enormous respect and admiration for the noble Lord, but I suggest that this debate, in a way, encapsulates why it is important to consider the Bill very carefully. It also suggests the one- sided and sometimes very difficult debate that surrounds Israel and the BDS question.

For example, the noble Lord described the environmental damage involved in taking away olive trees from Palestinian land as some kind of environmental crime, but historically one of the big criticisms of Israel has been that it uses forestation projects to push Palestinians off their land, so the environmental issue can be argued in different ways for different purposes. Israel has planted over 200 million trees since it was founded, so it does take care of the environment.

On some of the arguments that the noble Lord, Lord Hain, was using, one might suggest that one wants to boycott Israel or protect the environment in the opposite way from that which is often argued, and the double standards that have been applied to this debate. I urge my noble friend the Minister carefully to consider the unintended consequences of well-meaning environmental protection. I am, of course, very keen to protect the environment and support the comments made so excellently by my noble friend about the detail of Amendment 15. I thank noble Lords for their indulgence in allowing me to make these points.

[Lord Roborough (Con)]

My Lords, before I address this group of amendments, I reassure noble Lords that the intention of the Bill is not to interfere with the ability of public authorities to campaign on environmental issues. In answer to the noble Lord, Lord Wallace of Saltaire, the Bill is well defined on this issue. It already makes an exception for environmental misconduct, including where this has been facilitated by a foreign state or as a result of the laws or policy of a state failing to prevent it.

In answer to the noble Baroness, Lady Lister of Burtersett, environmental misconduct includes conduct that caused, or had the potential to cause, significant harm to the environment and amounts to an offence under the law of the United Kingdom or any other country or territory. This is in line with the exception in the Procurement Act 2023. The Bill therefore already exempts considerations related to a range of environmental offences.

I begin by addressing Amendment 15, tabled by the noble Lord, Lord Hain. This amendment seeks to ensure that the Secretary of State cannot remove environmental misconduct as an exception to the Schedule by regulations. In response to the first of the noble Lord’s points, the Bill does not stop campaigns on general environmental issues such as fossil fuels or biodiversity. This includes where they lead incidentally to not procuring from or investing in a number of countries. I hope that this also answers the questions asked by the noble Baroness, Lady Blackstone, and the noble Lord, Lord Collins.

Environmental campaigns will be captured by the Bill only if they single out a country in a way that is influenced by disapproval of foreign state conduct. General campaigns that do not single out a specific country or territory would not be captured. However, the Bill must not leave a loophole for public authorities to take a general position on an issue mainly with the intention to target a particular state. For example, a public authority might shape a general position on an issue with the intention that it results in a boycott of Israel. The Bill should rightly stop that. If a case is flagged to enforcement authorities, they will assess the evidence of whether a public authority’s procurement or investment decision was based on a non-country-specific campaign with the intention of targeting a particular state. Enforcement authorities will have the power to ask for a range of information before making a decision.

To repeat some of the comments made by my noble friend the Minister in the previous group, I reassure noble Lords that the power in Clause 3 cannot be used to remove any exception to the ban in the Bill as passed by Parliament. This includes the exception to the ban for environmental misconduct in the Schedule. To go further, in answer to the final question of the noble Lord, Lord Hain, the limitation in Clause 3(7), which refers to

“Israel … the Occupied Palestinian Territories, or … the Occupied Golan Heights”,

does not mean that the exceptions in the Schedule cannot be used in relation to suppliers and companies with connections to Israel or the Occupied Territories. All that limitation does is restrict the power of the Secretary of State to use regulations to add further exceptions to the Bill if those regulations would have the result of removing Israel, the Occupied Palestinian Territories and the occupied Golan Heights from the scope of the Bill. I am also grateful for my noble friend Lord Wolfson of Tredegar’s comments on this, which were helpful in explaining our position.

Amendments 32A and 32B, tabled by the noble Baroness, Lady Jones of Moulsecoomb, would broaden the range of considerations relating to the environment that are exempted from the ban. The Bill already allows public authorities to make territorial considerations that are influenced by moral or political disapproval of foreign state conduct when assessing complicity in conduct that causes, or has the potential to cause, significant harm to the environment. Lowering this threshold would allow public authorities too broad a discretion to engage in the behaviour this ban aims to prohibit. These amendments would allow public authorities to boycott countries that have reduced the level of environmental protection in a country. Governments across the world frequently adjust their environmental targets. It would not be proportionate to allow an entire country to be boycotted for this reason.

An example of where the exception as drafted in the Bill may be relevant is if a prospective supplier has, or may have, engaged in environmental misconduct due to inadequate environmental protection laws in a state. The existing exception has been drafted to accord with offences under UK law, including under the Environment Act 2021. In answer to the noble Baroness’s question, I reiterate that the Bill does not apply to campaigns that do not target countries or territories specifically, including campaigns against fossil fuels or for other environmental causes. The Bill will in no way prevent public authorities setting their own environmental standards as part of their procurement or investment strategies. The Bill defines “environmental misconduct” as conduct that is an offence

“under the law of … the United Kingdom or any other country or territory, and … caused, or had the potential to cause, significant harm to the environment, including the life and health of plants and animals”.

House of Lords (Peerage Nominations) Bill [HL]

Baroness Altmann Excerpts

2nd reading
Friday 18th November 2022 Lords Chamber

[Baroness Altmann (Con)]

My Lords, it is a pleasure to follow the noble Lord, Lord Russell. I commend my noble friend Lord Norton and wholeheartedly support the Bill. I do not have the same background as the noble Lord, Lord Russell. My parents did not know Lloyd George. Neither of them was born in this country. They were both born in Europe during the rise of the Nazi party. I feel extremely privileged and proud to stand here today.

We are often too defensive about our legitimacy as an unelected Chamber. If we were an elected Chamber, our role would be critically, even terminally, diminished. If we feel unable to reject government legislation because of party direction, what is the point of the scrutiny? We do not have ultimate power to stop legislation. We can amend, recommend, and reconsider. Perhaps we must make a stronger public case for the importance of what we do.

However, given my background, I feel that the checks and balances provided by this Chamber, which would be enhanced and protected by this Bill, are really important. Indeed, several pieces of legislation have recently sought to gather unprecedented, untrammelled Henry VIII powers to a Prime Minister and an Executive who are asking Parliament to approve carte blanche for any measure to be enacted, however damaging it could be. It is only this House that has held such legislation up, once it has sailed through the elected Chamber with a massive majority and almost no scrutiny. The House of Lords has been a bulwark against the possible trend to dictatorship and is part of our vital constitutional checks and balances, protecting our parliamentary democracy.

It has become clear that giving unregulated and unlimited prime ministerial patronage power, to put his or her favoured people in the Lords, is proving problematic. Surely very few would disagree, especially when the Prime Minister can put as many people as he likes in this House, and ultimately force through legislation as has happened in the Commons.

The Bill by the noble Lord, Lord Norton, giving the House of Lords Appointments Commission power to prevent this, is important, to protect the reputation of the House of Lords against any future Prime Minister who might, even deliberately, bring this House into disrepute or impose some extreme ideological control on this country’s legislation. With the global trends towards extremism and authoritarianism, we must guard against sliding down the slippery slope. Looking back with regret after the safeguards of our democracy have been dismantled will be too late.

Why would the Government not accept these sensible and modest proposals? For prime ministerial patronage, we already have an honours system, but if patronage of peerages is portrayed as an honour rather than as a public duty or a vital legislative role, the role we fulfil might continue to risk being confusing to the public. Therefore, I do support suggestions that one must think carefully about what resignation honours should entail. The Prime Minister has pledged to restore integrity and professionalism. Government acceptance of this Bill would be a first step to protecting Parliament’s reputation and our democracy. I hope that my noble friend will take the feeling of the House back to her department.

Elections Bill

Baroness Altmann Excerpts

Consideration of Commons amendments
Wednesday 27th April 2022 Lords Chamber

[Lord Rooker (Lab)]

My Lords, I had not intended to speak, but the fact is that, following what we have just heard, the Order Paper for Tuesday and Wednesday next week has Questions down from noble Lords. It is not as though we are slicing off tomorrow: the Order Paper is there, and it is there for a reason. Somebody worked out, in terms of the management of this place, that the House would sit. People put bids in for Questions, and they are sitting there on the Order Paper. The Minister —to whom I pay tribute for the way in which he has dealt with this Bill—did leave a gap open, which is not completely closed.

On what the noble and learned Lord, Lord Judge, said, we are certainly going to find out what the mettle of the electoral commissioners is made of, as a result of this kind of legislation. This is going to test those individuals—both the officers and the commissioners—in a way that they never contemplated when they applied for or were appointed to their posts.

I do not want to delay the House, but the other day I was reading—and I have not finished it—David Runciman’s How Democracy Ends. I came across this page where he quoted an American political scientist Nancy Bermeo, who had identified six different varieties—David Runciman called them “coups”—of ways in which things get manipulated. These are two of them. I would just like the Minister to explain how this Bill differs from these two examples:

“‘Executive aggrandisement’, when those already in power chip away at democratic institutions without ever overturning them. ‘Strategic election manipulation’, when elections fall short of being free and fair but also fall short of being stolen outright.”


Now where does this Bill differ from those two definitions?

[Baroness Altmann (Con)]

My Lords, I was not going to speak in this debate, but, having listened very carefully, I am deeply troubled at the idea that we would not try to see whether we can persuade the Minister and Conservative colleagues in the other place, right-thinking Conservatives, that there is a significant risk here of gerrymandering elections—something one would think was impossible to imagine in this country.

I think the House has been done a great service by the noble and learned Lord, Lord Judge, who has challenged us to stand up for what we can see is a significant risk. Indeed, when we think about what happens in the other place with the amendments that we are trying to point out are really important to insert in the Bills that are coming through in these final days, we see that they are not even being sufficiently debated. With a significant majority there is a risk that a Government can try to gather for themselves permanent or long-lasting powers that are not designed for the kinds of constitutional arrangements that we have in this country.

I therefore am finding myself deeply conflicted and troubled as to—in the words of the noble Lord, Lord Carlile—what we are here for if it is not consider, and ask the other place to consider, these matters.

[Lord Wallace of Saltaire (LD)]

My Lords, briefly, we on these Benches will vote for both amendments on matters of principle, because we believe in constitutional democracy and citizens’ rights. Sadly, throughout our discussions on this Bill, the Minister has resisted attempts to discuss this as a constitutional issue and as a matter of principle. Indeed, as the Bill has gone through the Government have removed this area from the Cabinet Office and put it in with housing and local government under the Department for Levelling Up, so that the Commons committee on constitutional affairs will no longer cover such things as this. I regret that, too; it seems to me entirely improper.

I recall the noble Lord, Lord Hannan, making a very powerful speech some while ago on the importance of process in politics. By “process” I take him to mean the way in which we conduct ourselves in the political world, including the rule of law and institutional checks and balances Those conventions of political life are a fundamental part of democracy. That is what this Bill has failed to reinforce. I think we all recognise that a future Prime Minister or a future Government will have to return to this issue and produce a much better Bill that can command more cross-party support.

The amendment in the name of the noble and learned Lord, Lord Judge, addresses the question of parliamentary sovereignty—not Executive sovereignty. My noble friend Lord Rennard’s amendment addresses the question of the right of every citizen to take part in the political life of the country and not to face unnecessary barriers. One of the many adverse effects of the Bill is that it makes it much easier and without barriers for overseas citizens to vote but more difficult for domestic citizens to vote. That is very odd, not entirely democratic and undesirable.

For those and other reasons, and on matters of constitutional principle, which the revising House should have particular concern for, we will vote for both amendments.

Protocol on Ireland/Northern Ireland: Effect of Renegotiation on Other Trade Negotiations

Baroness Altmann Excerpts

Thursday 21st October 2021 Lords Chamber

[Lord Frost (Con)]

My Lords, no one is speaking of tearing up the Northern Ireland protocol. We have made very clear that our wish is to negotiate a new version of the protocol with a new balance, and to do so consensually. That is not unusual in international relations, and there are plenty of examples that one could give. On the FTA question, look at the facts: we negotiated 60-plus free trade agreements last year before withdrawal; we have a huge programme of negotiations going on; and I am sure that they will come to good and beneficial results.

[Baroness Altmann (Con)]

My Lords, does my noble friend agree that, in any trade negotiation, trust is important and that, having signed agreements, it is important for the UK to maintain that trust? Does he agree that, in almost all cases, the free trade agreements agreed thus far do not require us to remove regulations that we already have? Would it be possible for the UK to commit to a period until, let us say, 2024 or 2025 for maintaining our regulations in order to rebuild trust and work out a solution that can demonstrate the UK’s good faith in trying to identify a new resolution for Northern Ireland?

[Lord Frost (Con)]

My Lords, as I have said on previous occasions, the question of trust is important and it takes two sides to create trust. As I set out in the speech in Lisbon to which the noble Baroness previously referred, there are a number of things that the EU has done that have not necessarily been conducive to building trust either, but we need to move on from that and generate new momentum to try to reach agreement on a revised protocol. On the question of SPS regulations, the difficulty is that free trade agreements are not the only reason why you might wish to evolve your own agri-food regulations, and indeed the EU has evolved its own autonomously since the start of 2021. Where there is divergence it is for that reason, not because of anything that we have done.

Health and Social Care Levy Bill

Baroness Altmann Excerpts

2nd reading & Order of Commitment discharged & 3rd reading
Monday 11th October 2021 Lords Chamber

[Baroness Altmann (Con)]

I regret being unable to support this Bill and will try to articulate some of my reasons. There are so many, and I will not detail them all. I associate myself with every word of my noble friend Lord Forsyth’s remarks.

While we debate this Bill, the care sector is marching ever closer to disaster. The measures we are debating—but of course are unable to amend—are nowhere near what is needed to fulfil the 2019 commitment to sort out the social care crisis. No help is guaranteed at all, near-term. The claims that these reforms demonstrate the courage to tackle the difficult issues that other Governments have ducked simply do not stand up to scrutiny. I wish they did, and I wish I could stand here and support a bold initiative to get to grips with a situation that is, frankly, a monumental national and social failure that has already, and will continue to, cost the lives of many vulnerable British citizens.

The challenges of social care are significant. This Bill simply fails to address them. It merely repeats the Dilnot-style measures already legislated for by the Care Act 2014, with a cap that still does not cover all the care costs and still leaves vital funding elements to cash-poor local authorities, which will keep having to ration, reduce or deny care for those in need.

Even the funding promised in this Bill is not ring-fenced to pay for care. It will first prop up the NHS, which already receives the lion’s share of taxpayer money and has itself worsened pressures on social care through the pandemic and proved, yet again, the second-class treatment—for example, by discharging Covid-positive patients, refusing to admit elderly people to hospital and cutting the previous regular visits by GPs to care homes.

This Bill does little or nothing to address so many of the basic fundamental social care sector failings and will still leave ordinary families facing massive costs to subsidise local authorities, which underpay for council-funded residents. There is nothing to address the artificial distinction between free at the point of need NHS care for, for example, cancer, and the hugely expensive social care for, for example, dementia patients.

It does nothing to help reduce staff shortages, which are real and rising right now. In that context, I ask my noble friend to reconsider the proposal for mandatory vaccination. This measure will make the situation worse. There are currently more than 150,000 vacancies in this sector in England. Care staffing shortages have already been compounded by post-Brexit migration rules, as carers from overseas do not reach the new higher income threshold to be eligible to work in the UK. The Government themselves estimate that at least 40,000 CQC-registered care home staff will refuse the vaccine and risk being forced out on 11 November if mandatory vaccination is introduced.

Without staff, how can homes look after people needing care? Many care homes are on the brink of bankruptcy after pandemic costs, with high staff turnover and competition from the NHS and hospitality sectors, as the noble Lord, Lord Griffiths, just outlined. They do not demand vaccination. Care workers may therefore just move to different or better jobs, but the staff shortages run risks with people’s lives. People have a right to refuse the vaccine. After all, even when vaccinated, they can catch and transmit Covid. I ask my noble friend the Minister to consider the case of a Ms Waite from Preston, who was dismissed from her care home job for gross misconduct for refusing the vaccine, despite having documented medical reasons for doing so.

This Bill will not reduce unmet needs or the financial fragility of care home operators. It will not end the current rationing of care, nor the ongoing reduction of preventive measures. The national economic model of social care relies on councils’ public funding paying below costs of delivery. I am afraid this is simply not a meaningful commitment to social care. It encourages short-term use of this money, supposedly designed to improve social care for the NHS. This obviously needs to be facilitated—reducing the backlog in the NHS is important—but social care underfunding is equally serious for the health and lives of our nation.

I cannot agree that national insurance is an appropriate mechanism for care funding. There will be no contribution from pensioners’ pensions, buy-to-let landlords or capital gains. This hardly spreads the burden widely or fairly across society. It may be rather better than the current costs falling entirely on those who are so frail or unwell that they cannot look after themselves and do not qualify for NHS help until they have used up most of their savings or assets to get public funding, but it will not stop people selling homes to pay for care. Indeed, if domiciliary care takes home value into account, it will increase the numbers of those who need to pay for care by selling their homes, although I do not believe that is an important yardstick in this debate.

This national insurance change is a regressive tax, which breaks a manifesto commitment and penalises the lowest earners and businesses already struggling to recover from the pandemic. Of course, as we emerge from Covid-19 disruptions, additional funding for both NHS and social care is needed, but the care crisis predates this period. Why should businesses pay for this?

I am disappointed to hear some on the Benches opposite turning this into a political issue. This is a social policy issue of the utmost importance, which has been neglected by successive Governments for decades. Worthy words, reviews, royal commissions and more have made recommendations for urgent change, but action on the ground was ducked. Even legislation has lain unimplemented, despite rising need and the financial collapse of major operators. Funding the NHS is still being prioritised over funding social care.

I have a few important questions for my noble friend. How much of the money raised by this levy is guaranteed for social care? Will the Government commit to abandoning their plans for mandatory vaccination for care staff? Can my noble friend give the House the estimated numbers of people requiring care over the coming years, as baby boomers now just starting to enter their 70s reach their 80s and demographic pressures mean a sharp increase in need relative to today’s rather small cohort of more elderly people, with which this country is currently not even coping?

Have the Government considered introducing incentives for families to save for future care needs? I do not mean just insurance but actual savings, a tax incentive for those with pensions, such as tax-free withdrawals to keep money earmarked for their later life, in case they need care, and incentives for people to earmark their ISAs for care—for example, a maximum amount of ISA that could be passed on free of inheritance tax if set aside for care. More than 8 million over-60s hold a total £300 of billion, an average of £35,000 to £40,000 each, in ISAs, and those are 2018 figures which have probably increased since then. These are not necessarily earmarked for any purpose, and before the money is spent on cars, cruises or other goods, introducing an incentive not to spend it could benefit both families and the financial services industry.

As the care cap will start accruing only when needs are substantial, there is nothing to help those with moderate needs, and the cap will cover only local authority-approved rates. Many families will want to have some money to help them before the care cap even starts counting, and as more people have used their pensions or ISAs while relatively young, future taxpayer costs will be higher, because people will have exhausted their savings before they need care and will have no opportunity themselves to help support preventive measures, higher standards of care or care earlier than is otherwise the case.

This is a national policy issue. It is not about politics. I hope that my noble friend responds to cross-party offers of co-operation on this important issue.