National Insurance Contributions (Employer Pensions Contributions) Bill

Baroness Stedman-Scott Excerpts

Consideration of Commons amendments and / or reasons
Wednesday 25th March 2026 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I, too, support these four amendments and, had it been permitted at ping-pong, I would have added my name.

I am going to be very brief. We are all aware, through freedom of information applications, that the OBR forecasts of the impact of this Bill present us with a high degree of uncertainty. In that circumstance, one would think that an impact assessment was the logical response, particularly since there is a time delay to the introduction of this measure.

Sometimes you come across a Bill and you just know that the Government have misunderstood what its impacts are going to be, and that when it is in force there will either have to be very dramatic changes or the whole Bill will need to be reversed. Frankly, this Bill is one of them.

I am not going to take up any more of the time of this House, but I hope that the Government understand and realise that this is not a Bill that will work in its present form and that an impact assessment would have been an assistance, not a burden.

[Baroness Stedman-Scott (Con)]

My Lords, I was speaking to a young man just yesterday who has done everything he has been encouraged to do. He has studied well and he has worked and saved in order to put a deposit down on a house. He has been helped by people who have been fortunate enough to make some money to be able to help him. He had just moved into his first flat in London, and he could not be happier. Yesterday, he was called into his boss to be told there would be a period of consultation because of the Government’s introduction of various taxes and penalties on employers trying to employ people. He is now in a very difficult and despondent position.

We talk about impact assessments for pension contributions. Has the Minister any idea of the impact on people’s lives when they have done everything right and now find themselves in the most vulnerable position? This may not be completely focused on the amendments that have been laid today, but the principle is the same. The Government are creating anxiety. The whole thing is making people wonder what the point of trying to better their lives is. I ask the Minister to think again. If we want a country that is robust, where people feel that everything is to gain, this is not the way to go about it.

[Lord de Clifford (CB)]

I will be extremely brief. I support all these amendments in the name of the noble Baroness, Lady Neville-Rolfe. My main concern is that some basic rate taxpayers will be disincentivised from making pension contributions because of that extra 8% that they are going to pay. That will take away the real advantage that we have seen in auto-enrolment and they will opt out of those schemes because they need to fund their houses. The Government should please look at it again.

Autumn Budget 2025

Baroness Stedman-Scott Excerpts

Thursday 4th December 2025 Lords Chamber

[Baroness Stedman-Scott (Con)]

My Lords, to be frank, I am not entirely sure where to begin. There is much to consider and even more to be concerned about. This Budget, at its core—in a deliberate political choice—is about welfare over work. We are asked to believe that this Budget strengthens the economy and supports working families, but, once you look past the presentation, a very different picture appears: rising inactivity, weakening incentives—a point made by my noble friend Lord Hintze—and a welfare system growing far faster than our economy can sustain. I hope noble Lords will forgive me if I focus my limited time on that core issue.

Politics is about choices, and the choices in this Budget are unmistakable. At every turn, the Government have chosen welfare over work. We on these Benches and, I am sure, all other Benches in the House are absolutely clear that help should be given to those who really need it, and should be given at the time that they need it. We see this most clearly in the decision to abolish the two-child limit. We are told this is an act of compassion. But compassion first requires honesty, and the evidence is clear: workless households are the strongest predictor of poverty. Removing the cap, which I have no doubt is well intentioned, will mean more children growing up in a family where no one works, at a time when the economy has already shed 180,000 payroll jobs in the past year and when labour supply growth is falling.

What makes the choice all the more striking is that Labour once knew this. As my noble friend Lady Coffey already said, the Chancellor herself argued that keeping the cap was the right thing to do. She did it so strongly that colleagues were suspended for disagreeing with her. People respond to incentives, and the incentives in this Budget are in danger of pointing people firmly away from work. Many on welfare now receive around £2,500 a month, which is more than someone earning the minimum wage takes home. Meanwhile, the Chancellor’s inflammatory policies and tax rises are stifling take-home pay for those in work.

Additionally, new analysis shows that a jobless family on combined benefits will now take home £18,000 more each year than a working family with the same number of children. Why would you go to work? We are in danger of creating lifestyles that are unsustainable through paid work. When the system pays more not to work than to work, people are not being irresponsible but responding to the incentives that the Government have created. Their choices are rational; the Government’s choices are wrong.

This is not a strategy for growth or a route to higher living standards. It is the story of a country slowly drifting into deeper dependency and a Government content to let that drift continue. We want resilience, not reliance. We want independence, not dependence.

Economic and Taxation Policies: Jobs, Growth and Prosperity

Baroness Stedman-Scott Excerpts

Thursday 13th November 2025 Lords Chamber

[Baroness Stedman-Scott (Con)]

My Lords, the forthcoming Budget due on 26 November is perhaps the most anticipated that I can remember. We have had a summer of speculation, an autumn of uncertainty, and now, as winter approaches, we know what is coming—tax rises—and we know this is not an inevitability; it is a political choice. It is the choice of a Chancellor who has deliberately decided not to tackle the soaring welfare bill and in doing so has failed to confront the deeper question of how we restore the value of work in our society. Once again, rather than make the structural reforms our economy so desperately needs, this Government reach for the taxpayer’s wallet, but we cannot tax our way to prosperity. We cannot grow an economy by burdening those who work, create and invest, while allowing the welfare budget to expand unchecked. The cost of economic activity through ill health is now estimated at £212 billion a year, and around 235,000 people aged 25 and under are claiming long-term sickness benefits, many citing mental health. Some 5,000 people a day are moving on to sickness benefits, and this represents not only a fiscal challenge but a moral one—the loss of potential, of dignity, of contribution. If we are serious about jobs, growth and prosperity, this is where our focus must lie.

A welfare system that traps people rather than supports them is not compassionate; it is corrosive. Yet, too often, welfare policy has become morally untouchable. Just because a policy is founded on noble intentions, compassion, equity and justice does not mean it should be immune from scrutiny. In fact, the more morally appealing a policy appears, the more resistant it becomes to critique, creating a dangerous blind spot.

The welfare bill is now one of the greatest barriers to economic renewal, not simply because of its size but because of what it represents: a failure to match compassion with accountability and support with expectation. Until we confront that reality, we will continue to balance the books not through reform but through ever higher taxes on those already doing their bit. The Government should be clear why value for money considerations and reducing inefficiency are not explicit objectives.

My noble friend Lord Young of Cookham has already referred to the Timms review’s terms of reference, but it is important PIP is fair and fit for the future, and something that we as a country can afford. It is a deliberate exclusion that raises serious questions about priorities. The Government should also confirm that improving outcomes and securing better value for the taxpayer remain central to the design and delivery of disability benefits, and commit to publishing an implementation plan with clear, measurable efficiency gains.

This debate matters. I congratulate my noble friend Lord Elliott of Mickle Fell on securing it. His book is a good one and I can recommend it—in fact, because I am feeling a little bit generous, I am very happy to buy a copy for the noble Lord, Lord Livermore. I am sure he will enjoy every page.

Can the Minister explain why value for money considerations and reducing inefficiency are not explicit objectives, and will the Government confirm that improving outcomes and securing better value for the taxpayer remain central to the design and administration of disability benefits, and commit to publish an implementation plan with measurable efficiency gains?

I spent 34 years helping unemployed people with every problem in the book get back to work. It can be done, but it needs to be against a backdrop of the country’s good economic performance. I leave you with this: you cannot make a poor man rich by making a rich man poor, and you cannot help the wage-earner by punishing the wage-payer.

Winter Fuel Payment

Baroness Stedman-Scott Excerpts

Tuesday 10th June 2025 Lords Chamber

[Baroness Stedman-Scott (Con)]

My Lords, I rise with a sense of relief, although not without regret: relief that the Government have chosen to reverse a policy that has caused distress and fear among our oldest and most vulnerable citizens, and regret that such a policy was every pursued in the first place. This reversal gives us cause to reflect on the true value of the winter fuel payment. For pensioners on modest incomes it has never been a luxury, and it has supported the most vulnerable through the darkest and coldest months of the year.

Although we welcome the Government’s decision to U-turn, we must not lose sight of how we came to this point. In December last year, I stood at this Dispatch Box and warned the Minister about the very consequences we are now discussing. At the time, I made it clear, and I reiterate today, that withdrawing the winter fuel payment from all but a limited group of recipients dealt a serious and unjust blow to millions of older people across the country. We made our position clear from the outset: the Government were wrong to scrap the winter fuel payments for millions of vulnerable pensioners.

These Benches opposed that policy on three key principles. First, it would have left millions of older people worse off during the coldest months of the year. Secondly, it reflected a misplaced set of priorities, favouring above-inflation pay rises for public sector workers over the needs of those in later life. Thirdly, it was introduced without transparency, with no reference to such a significant change during the general election campaign. We urged the Government to listen to the concerns raised across the House and consider alternative approaches to fiscal responsibility that did not come at the expense of those who can least afford it. This House raised those concerns. We reminded the Minister of the Conservative’s record on support for pensioners, with the triple lock, the warm home discount and the winter fuel payment itself.

As Churchill once remarked, a man who does not change his mind cannot change anything. As we rightly warned last year, removing the winter fuel payment was an appalling blow for pensioners. Today, the Government have done the honourable thing: they have listened, reflected and acted. Admitting a mistake is never easy, but correcting one is a mark of leadership. On this occasion, the Government have finally listened to your Lordships’ House. Is this a taste of things to come—that they will listen to the serious concerns we are raising on the most damaging elements of their policy platform? Will they row back on those parts of the Employment Rights Bill which will devastate small and medium-sized businesses? Will they finally act to protect our farmers from the punitive family farm tax? Will they halt their assault on the best schools in our country in the schools Bill?

This reversal is not only welcome but essential. It reaffirms our commitment to the millions of pensioners who depend on this support and upholds the integrity of our social contract with those who have worked hard and paid taxes all their life. Let this moment serve as a precedent that the voices of the vulnerable must be heard, that fairness must not be sacrificed for short-term savings and that the dignity of older citizens is not negotiable. That said, it is deeply regrettable that this reversal was ever necessary. The original decision was ill-conceived and caused needless anxiety and hardship for some of the most vulnerable in our society.

Although we welcome the change of heart, we are entitled to ask how it is being paid for. The Government have said that this U-turn will cost around £1.25 billion; if the economic outlook has not materially improved, as the Chancellor’s own figures suggest, then where is this money coming from? Are tax rises now on the table? If so, which taxes and on whom? Will the Minister confirm whether His Majesty’s Treasury intends to raise revenue through stealth taxes or whether further departmental budgets will be cut elsewhere to fund this reversal?

What of the administrative burden? Will pensioners with incomes above £35,000, in particular those with non-taxable income, now be required to complete tax returns? What guidance will be issued to those who may find themselves unexpectedly caught in a new reporting requirement? Further, will the Minister explain what happens to a pensioner who is widowed, inherits a pension and then finds themselves with an income over £35,000?

This House has a duty to speak out when the vulnerable are at risk. Today, we have fulfilled that duty. The Government have listened, but we must remain vigilant. I say to the millions of pensioners left in uncertainty this past winter: you were heard. I say to the Government: let this be a reminder that the strength of a society is measured not by how it treats the powerful but by how it cares for the vulnerable.

Although we welcome this change of heart, we need to understand how the Government have suddenly found the money to pay for it. In the end, the savings achieved by this policy may be as little as £50 million. Will the Minister tell the House whether it has been worth all the pain and aggravation? Will he apologise now to the millions of pensioners who struggled to get by this past winter?

[Lord Palmer of Childs Hill (LD)]

My Lords, this surely must be the Government of unintended consequences. When this policy was first mooted, I asked the Minister whether there would be any financial gain from it because, with the further uptake in pension credits, the actual money saved is miniscule. It is nothing like what the Government said they would get, so we have gone through all this pain and people have suffered, all for a strange bit of ideology.

Following on from what the noble Baroness on the Conservative Front Bench said, reports in the media suggest that winter fuel payments will be made automatically as a universal benefit this winter. Money will then be reclaimed when higher-income pensioners fill in their tax returns. Can the Minister say how the Government will ensure that the new system does not mean that the bereaved families of tens of thousands of dead pensioners—not only widows and widowers but dead pensioners—will be pursued by tax officials to recoup the payments? The Government of unintended consequences strike yet again.

Although the Chancellor has finally acknowledged the failure of this policy—thanks to sustained efforts by the Liberal Democrats and others—the scale of the distress created must not be forgotten. Do the Government intend to uprate the £35,000 threshold in line with inflation in future years?

This has been a disastrous policy. It has not raised the money we were told it was intended to raise. There will be further distress down the line while they try to sort out this mess.

[The Financial Secretary to the Treasury (Lord Livermore) (Lab)]

My Lords, I am very grateful to the noble Baroness, Lady Stedman-Scott, and the noble Lord, Lord Palmer of Childs Hill, for their questions and comments. I am grateful to the noble Baroness for welcoming this change of policy, and I thank both speakers for the consensus that now exists across the House on the current policy position.

The noble Baroness began by asking how we got here. We got here, of course, because when we came into office, we had to make a number of very urgent decisions to put the public finances back on a firm footing. That involved us taking some very difficult decisions on welfare, tax and spending, including means testing the winter fuel payment. I am very grateful to her for noting that we have now listened to the concerns raised, inside and outside this House, about the level of the means test.

The noble Baroness asked about the savings that will be generated from this policy. As she rightly said, we expect the policy to cost around £1.5 billion a year in total, including £1.25 billion in England and Wales, by the end of this forecast period. She asked about the savings that this would generate. It is estimated to save around £450 million a year, compared to universal winter payments.

The noble Baroness asked when and how this would be paid for. We are setting out these changes now to ensure that more pensioners can receive support this winter—that is the right thing to do. There is now just one fiscal event a year, so, as is normal, these changes will be fully funded at the next fiscal event, which is the Autumn Budget. This will ensure that final costings and funding decisions come alongside a full forecast from the OBR, and we will ensure that the fiscal rules are met at all times.

The noble Baroness also asked about the other policies we are pursuing. It was appropriate that, ahead of tomorrow’s spending review, she reminded us that the party opposite has not supported a single policy that we have put in place to stabilise the public finances or to raise money for public services. When we have tomorrow’s spending review, it will be very interesting to hear from the party opposite that it now supports all the spending we are doing, even though it did not support a single one of the difficult measures we took to raise money for public services. It is very interesting that she opposed the Employment Rights Bill, because we again see that her party does not support a single measure to improve the lives of working people.

[Baroness Stedman-Scott (Con)]

That is not true.

[Lord Livermore (Lab)]

Well, I think it is true.

The noble Baroness asked specifically about the tax system. No additional pensioner will be brought into the tax system because of this change; we can give that assurance to the House today.

The noble Lord, Lord Palmer of Childs Hill, asked about recouping payments from deceased people. HMRC has established processes in place to recoup payments and finalise the tax affairs of deceased people, so nothing will change because of this policy. This is not a taxable payment. We assure the House that, if this is the only outstanding tax charge remaining from a deceased person, HMRC will not pursue anyone just for this specific amount of money. The noble Lord also asked whether we will uprate the threshold of £35,000. We will set that out in the Budget.