National Insurance Contributions (Employer Pensions Contributions) Bill

Debate between Lord Livermore and Lord Mackinlay of Richborough

Report stage
Thursday 5th March 2026 Lords Chamber

[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.

[Lord Mackinlay of Richborough (Con)]

This is an important point in many ways. The Minister will be aware that within an owner-managed director business, the director has absolute discretion about how he or she may take their overall package, whether that is dividends, usual PAYE employment or, quite normally, the company making a pension contribution. Would such a situation fall within these rules because the director is effectively the be-all and end-all making that option and discretion themselves? No other party is deciding whether thou shalt have this or that. Can the Minister give his early impressions about how that situation may be dealt with?

[Lord Livermore (Lab)]

It sounds to me, although I realise it is an odd phrase to use because you are negotiating with yourself, that that is established as a negotiated contract and, therefore, that is not an option that arises for you after that contract is negotiated. I think that in the example the noble Lord gives it would not be, but obviously that will be set out very clearly in guidance going forward.

The Government’s view is that the Bill already draws the appropriate and proportionate boundary. It addresses arrangements involving a choice between cash and pension provision, while leaving ordinary, non-optional employer pension contributions wholly outside scope.

National Insurance Contributions (Employer Pensions Contributions) Bill

Debate between Lord Livermore and Lord Mackinlay of Richborough

Committee stage
Tuesday 24th February 2026 Grand Committee

[Lord Livermore (Lab)]

I suppose I would ask the noble Baroness: who does she mean when she asks, “How would one know”? Who is “one” in that instance? HMRC? That would be reported to HMRC, would it not?

[Lord Mackinlay of Richborough (Con)]

HMRC.

--- Later in debate ---

[Lord Livermore (Lab)]

I have set out very clearly which will be approached with the negative procedure and the affirmative procedure, and I do not think it is our intention to deviate from that very clear precedent.

Amendment 33, tabled by the noble Lord, Lord Leigh of Hurley, and the noble Baroness, Lady Altmann, relates to the operability of the contributions limit for those with multiple concurrent jobs. Amendments 4A, 4B, 17A, 17B and 29A, tabled by the noble Lord, Lord Fuller, also relate to operability of the contributions limit, with a focus on those with fluctuating earnings and their employers.

I fully understand the concerns that noble Lords have raised about how this measure will operate in practice, particularly for those with more complex employment arrangements and irregular patterns of remuneration. While the Bill provides the necessary powers, the full operational detail of the £2,000 cap will be set out in regulations that are yet to be published. The purpose of this two-stage process is to ensure that when the cap is introduced, it operates effectively across a wide range of real-world circumstances, including for individuals with multiple jobs, complex payroll arrangements, changing employment or fluctuating remuneration patterns over the course of a year.

[Lord Mackinlay of Richborough (Con)]

Is the Minister’s understanding of the Bill that the £2,000 threshold will be in the entirety of a single employee or across each employment? At the moment, with NI regulations the employee benefits from different thresholds in each employment that is held. That means that with less than £12,570 in each multiple employment no employee national insurance is paid at all. Is the intention for it to be £2,000 in total across any number of employments, or £2,000 per employment?

[Lord Livermore (Lab)]

That intention will be set out in the regulations once we have fully consulted relevant employers.

Covid Counter-Fraud Commissioner

Debate between Lord Livermore and Lord Mackinlay of Richborough

Wednesday 5th February 2025 Lords Chamber

[Lord Mackinlay of Richborough (Con)]

My Lords, I wish the Government well in their counter-fraud investigations into Covid, because public money is of course of the utmost importance, but there is a clear and present daily problem with government procurement. Some years ago, I did a piece of work with the TaxPayers’ Alliance, looking at the price of photocopy paper across public institutions. It was vastly different: from £1.99 to £5.33 for a ream, within a health trust on the south coast. Can the Minister assure me that work is being done to maximise procurement gains throughout the system?

[Lord Livermore (Lab)]

Yes, I can, and I agree with the noble Lord. At the Budget, the Chancellor launched the Office for Value for Money, which will assess where and how to root out waste and inefficiency and to unlock value-for-money studies in specific high-risk areas of cross-departmental spending, and scrutinise investment proposals to ensure that they offer value for money.

UK–China Economic and Financial Strategy Dialogue

Debate between Lord Livermore and Lord Mackinlay of Richborough

Tuesday 4th February 2025 Lords Chamber

[Lord Mackinlay of Richborough (Con)]

My Lords, does the Minister have any discomfiture at all about his Government going to China and begging for investment and trade while many parliamentarians in this Palace remain sanctioned by the Chinese regime?

[Lord Livermore (Lab)]

I completely disagree with the noble Lord’s characterisation of the Chancellor’s visit to China. As I said, we must and will continue to engage with our international partners in trade and investment, and that includes engaging with China. We cannot ignore the fact that China is the second-largest economy worldwide and our fourth-largest trading partner, with exports supporting close to half a million jobs in the UK. We need to help British businesses export around the world, and that includes to China. On human rights and the parliamentary sanctions that the noble Lord talks about, the Chancellor did raise those—absolutely—but she believes that, unless we open that dialogue, we will be unable to raise the concerns that we have.