Getting Britain Working Again
Caroline Nokes Excerpts(3 weeks, 6 days ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Caroline Voaden
I thank the hon. Member for his intervention. We do not have a mayor in Devon, so we miss out on a lot of that legislation’s benefits. I have loads of villages that do not even have a bus, so talk of bus fares is completely irrelevant when there is literally no service. How are young people supposed to get to college or work or seek opportunities if they cannot get out of their village?
There was no legislation to require banks to offer a minimum service guarantee to their customers. Lloyds bank made nearly £7 billion in profit in 2025, yet it closed branches with impunity, and the Government’s promises to address the lack of banking services have led to nothing so far.
There are some things in the King’s Speech that I would like to welcome. I am pleased to see the Government pledge finally to break the link between gas and electricity prices, which is vital in a country that depends more heavily on gas than many of our neighbours. Investment in home-grown renewable power is also welcome, but we want to see the focus of solar on warehouses and car parks, not on prime farmland. We also want to see stronger community benefits from new renewable infrastructure, empowering communities with the right to buy and sell community energy locally.
Talk of farmland leads me to a devastating omission from the King’s Speech: not once was the word “nature” mentioned. As my hon. Friend the Member for South Cotswolds (Dr Savage) so beautifully laid out in her speech last night, that was probably something that the King himself was disappointed to see. Where is the desire to protect our green spaces, to prompt a revival in nature, to restore our ancient forests and our peatlands, and to clean up our dirty rivers and waterways once and for all? We live in one of the most nature depleted countries in the world, yet nature is not a priority for the Government, despite all the benefits that it brings to people’s health and wellbeing. If we truly want to cut the NHS bill, that would be a really good place to start.
The new water Bill is welcome. The Liberal Democrats have long called for Ofwat to be replaced by a regulator that actually has some teeth, but until the Government address the elephant in the room and look at the ownership of the water industry, nothing will really change. No one should be making a profit from water: something that is so vital not only to us as humans, but to the health of all our planet’s ecosystems. The Liberal Democrats have long led the campaign in Parliament against the sewage scandal, tabling 44 amendments to the Water (Special Measures) Bill, none of which the Government or the Conservatives accepted. They must do more.
Lastly, I will mention the education for all Bill. We all know that support for children with special educational needs is broken, so I welcome the Government’s commitment to tackling it; we urgently need this reform. As my party’s schools spokesperson, I will scrutinise every line of the legislation when it comes before the House, so I will no doubt have time to say far more about it, but let me say this. We must build a system designed around the potential that every child has and that works to their strengths, noticing their gifts and talents and what they can achieve given the right support. We must stop judging them by their limitations, ostracising them, separating them from their peers and causing lifelong damage to their mental health and confidence.
Reform to SEND must be done with children and parents at its heart, with open, honest consultation with families, and with a serious commitment to invest the money needed in our educators and our schools so that they can rise to the challenge and truly build a more inclusive system that works for every child, from those facing the hardest of challenges to the lucky and blessed high achievers among them.
It is a strange thing to deliver this speech opposite Government Benches that are so clearly riven by intrigue, and not knowing who will be leading this legislation through Parliament. It is my hope that whatever path our Government colleagues decide to go down today—or over the next few days and weeks—they will commit to going further in the areas that I have set out, remember the challenges and higher costs faced by rural areas in service delivery and communications, and prioritise nature in every single major decision they make about infrastructure and new building programmes. Think bigger, think bolder, think greener for the benefit of everyone.
Madam Deputy Speaker (Caroline Nokes)
Order. Before I call the next speaker, may I please gently remind Members that we must not make reference to the monarch having particular views?
Apsana Begum (Poplar and Limehouse) (Lab)
In 2024, the British people, including so many of my constituents, voted for change. After a decade of brutal austerity, they desperately needed a drastic and material improvement in their living standards. The last King’s Speech championed measures that have the potential to radically change the situation for people, from renters’ rights to employment rights and more. I am pleased that this King’s Speech brings forward the Government’s commitments to end conversion practices and to give the vote to 16 and 17-year-olds.
Yet we are not seeing the transformative agenda that the country has been crying out for and that people who have always supported Labour want. We have seen policy U-turns, from winter fuel allowance to the lifting of the two-child limit, following significant political and public pressure. We have seen policies that the British public rejected just last week, such as the changes to indefinite leave to remain and, of course, the continued failure to take meaningful action against the genocide in Gaza. We have also seen the targeting of refugees and migrants, and the provisions of the immigration and asylum Bill are incredibly alarming. The direction of travel in policy means that the Government are now left facing existential questions about what the Labour party stands for, who it stands for and why.
The Government said in response to their losses last week that there needs to be a faster and quicker shift, but in the same direction. I want to be clear that this is not what my constituents want. My constituents and I refuse to accept that poverty and inequality have to be a normal part of our society and that nothing can be done about it. That is not why I came into politics.
It is true that the stark disregard for human suffering displayed by the Conservative Government will never, ever be forgotten. They drove people into poverty then punished them for being poor. They pursued the vulnerable and persecuted the disabled. That is why people have been desperate for real change. It is also true, however, that the United Kingdom is the sixth largest economy in the world and London is the fifth wealthiest city in the world. The richest 1% of Britons hold more wealth than 70% of the population, and the UK’s 50 richest families now hold more wealth than 50% of our population. In that context, people simply do not believe that they must continue to endure more hardship for any longer.
I have said before that everything has to be costed and nothing is free in the purest sense, but the fact is that we are a relatively wealthy country and the resources are there in some form. They could be raised, for example, by ensuring that big business and the wealthy pay their fair share. If the wealthiest 1% in this country were taxed just a modest 1% more, it would raise £25 billion and leave more after. It is a question of priorities, political choices and in whose interests decisions are made.
I find myself asking again and again, “If there is not enough money, what is the plan to make sure that there is?” Why does austerity still have to be the political choice? That is why I call for the overall benefit cap to be lifted in full; the lifting of the two-child limit alone still leaves thousands of families excluded and trapped in poverty.
I appeal to the Government to ensure that there are no further attacks on the rights of disabled people in the UK. The Timms review is due to report in autumn, and I am obliged to make it clear for my constituents, many of whom are already impacted by cuts to the health component of universal credit, that any further attempts to restrict or cut personal independence payments would be disastrous and have to be dropped. If they are not dropped, at bare minimum there must be a full parliamentary vote.
Surely the greatest duty of any Government must be to protect and empower the most vulnerable people in our society and deliver social good, not social harm. I am clear about what my role must be, who elected me, and who I am here to represent, and I cannot in my conscience allow the poor, the sick, the elderly and the disabled to be exposed to any further brutality. If there is no money for disabled people not to be further punished through the welfare system, then the money must be found. If the way our economy is run means that large scale human suffering and wasted potential is unavoidable, it is up to the Government to change the way the economy is run.
The King’s Speech proposed a step forward towards the nationalisation of British Steel. I welcome that intention, just as I welcomed the first steps towards the nationalisation of railways in the last Session. However, it presents nationalisation almost as a move of last resort, after private interests have extracted all the profits they can from privatised industries. Why can we not have a conversation about nationalisation in the public good? When we are seeing the dire, shameful way that the private water industry is being mismanaged, a new water ombudsman in the clean water Bill is not enough to meet the scale of the problem. If they have the political will, the Government can meet the public support and demand for public ownership for mail, rail, water and gas, and end the disastrous experiments with privatisation.
I reaffirm my commitment to a publicly owned and run NHS that provides free and funded healthcare for all. That principle was an ironclad manifesto commitment, yet we have seen a return to private finance initiatives in the NHS—the same initiatives that have had disastrous consequences in constituencies such as mine in east London. Doctors themselves are resisting controversial Government decisions to sign partnerships with Palantir, and along with that, the agreement last year to appease Donald Trump will strip away National Institute for Health and Care Excellence medicine price controls, and lock in higher drug prices, doubling NHS spend on new medicines, and diverting funds from other vital NHS functions. That will only serve to benefit American big pharma. Private interests should never line their pockets at the expense of our society’s health, not least under a Labour Government.
The economy must also work to resolve the housing crisis. I have been looking closely at the social housing Bill, and I welcome its provisions and measures to protect tenants who are victims and survivors of domestic abuse—something the sector has long been campaigning for. However, we will be looking at such measures closely because they need to work in practice, and I remain concerned about the Bill more widely. Can it truly provide the solutions needed to solve the housing crisis without ensuring a commitment to a mass social housing building programme and rent controls?
My east London constituency has one of the highest rates of child poverty in the entire country. We have people living in uninhabitable and overcrowded homes that are also not affordable. That is set against a backdrop of rising wealth in the financial sector and the encroaching City of London in the west, and the ever-expanding Canary Wharf real estate. It is why many of my constituents are concerned about what the legacy and future of the Billingsgate market site in my constituency could be. Could it provide genuinely affordable homes, or could it lead to more luxury flats being built that will drive local people, including families, out of our area? Likewise, many of my constituents who are struggling in the cost of living crisis are interested to know what the Government’s discussions with the financial giant J.P. Morgan will end up meaning for our area and whether decisions are being driven in the interests of local people and for the longevity of our area.
The Prime Minister claimed yesterday that the King’s Speech
“will tear down the status quo”.—[Official Report, 13 May 2026; Vol. 786, c. 22.]
The risk here is that disillusionment has begun to settle in. I believe there needs to be less talk of delivery and missions and more talk about how the Government will truly rebalance power and address inequality in the interests of workers and working-class people in this country. The Government must be louder and bolder, but in a vastly different political direction. That must mean showing up as a Government who take people’s material concerns seriously and addressing those concerns in line with the Labour values that they were founded on. More incrementalism sends a message to the British people that the Government do not understand what has gone wrong, because this country and its economy are not working for millions of people, and that demands transformative action.
Pension Schemes Bill
Caroline Nokes ExcerptsMonday 27th April 2026
(1 month, 2 weeks ago)
Commons ChamberRead Full debate Pension Schemes Act 2026 View all Pension Schemes Act 2026 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Commons Consideration of Lords Message as at 27 April 2026 - large print - (27 Apr 2026)
Andrew Western
The hon. Gentleman will be aware that conversations are always ongoing to ensure that any legislation that comes from this place can be adopted by all the nations of this great country. I hope that some of the concerns that have continued to be raised by his colleagues, and by peers in the Lords as well, will be addressed by some of the detail that I am about to set out.
As I have said, that power can be used only once, and, if unused, lapses entirely in 2032. Even if it is used, however, the entire asset allocation regime falls out of effect and the statute book at the end of 2035. These provisions rule out any of the more lurid uses we have heard it claimed that the power would be used for, restricting it narrowly to underpinning the Mansion House accord.
As well as insisting on that package, the Government are today introducing further amendments to the savers’ interest test in the proposed new section 28G of the Bill. I remind the House that the reserve power exists because providers have said that they struggle to do something that is in savers’ interests, namely invest in a wider range of assets. However, the savers’ interest test exists for circumstances in which schemes can show that even investing as little as 10% in private assets—far below the levels that we see internationally, or in open defined benefit schemes here in the UK—might not be in their particular savers’ interest. In those circumstances, it allows them a route to seek an exemption from any requirements imposed by the reserve power. Arguments have been made, here and in the other place, about whether the test as drafted included sufficiently clear and strong protections. The Government have reflected on those arguments, and the further amendments before the House today respond to them. There are four changes.
First, we are lowering the threshold for an exemption. The Bill as drafted would have allowed regulations to require a scheme to show that compliance “would cause” material financial detriment. We are changing that to
“would be likely to cause”.
A scheme will need to show that detriment is the probable consequence, not a certain one.
Secondly, the Bill now makes it explicit that when a scheme meets the threshold, the regulator must grant the exemption. That has always been the Government’s intention, and the amendment ensures that there is no room for doubt.
Thirdly—here I want to respond directly to arguments raised by noble Lords about the weight that should be given to the judgment of trustees and scheme managers—we are proposing a change to put their assessment of savers’ interests centre stage. The new text makes clear that the responsible regulator must not only receive the scheme’s own assessment of why compliance would be likely to cause material financial detriment, but be required to have due regard to it. Schemes must set out their reasoning, and the regulator must engage with it properly and thoroughly. “Due regard” is established statutory language with legal weight: it means that the regulator cannot simply pay little or no attention to the scheme’s analysis.
Fourthly, the regulator must give reasons when it refuses an application. That matters because schemes have a right of appeal to the upper tribunal, a right that is strengthened if applicants know why they were turned down.
Let me draw this together. The savers’ interest test now provides a lower threshold, an explicit guarantee that exemptions will be granted when the test is met, a requirement for the regulator to give proper weight to the scheme’s own analysis, and transparency and accountability if an application should fail. Taken alongside the constraints on the power itself—the percentage caps, the single-use restriction, the 2032 sunset and the 2035 full repeal—this is a framework of strong and explicit protections.
There are those, here and in the other place, who would prefer the reserve power not to exist at all. As Members of this House know, we respect that position, but it is not a position that we share and it is not the position of the Government. There is a well-evidenced collective action problem in the defined contribution market, and the consequences of leaving it unresolved would fall on pension savers. That is not a risk that the Government are prepared to take.
This House has made its view clear on two occasions, and the Government have responded by baking in a raft of additional safeguards to primary legislation. This is now a third round of material changes, which I suspect this House may again endorse with a decisive majority. At some point, the question before the House is no longer the detail of the amendments, but whether the other place should continue to reject the clearly expressed view of the elected House and delay the passage of a Bill that delivers for savers in a whole host of ways. I urge the House to send these amendments back to the other place, and to bring these exchanges to a close.
Helen Whately (Faversham and Mid Kent) (Con)
First, may I thank the hon. Gentleman for opening this evening’s debate, and for setting out the latest Government amendments, in place of the Pensions Minister? These ping-pong sessions with the hon. Member for Swansea West (Torsten Bell) have become a regular in my diary, and I will miss him this evening.
When this Bill was introduced last summer, we said that much of it was a sensible step forward that built on the work of the previous Conservative Government. We stand by that view, but supporting the broad direction of a Bill does not mean unqualified support for its every provision. Throughout its passage, we have challenged the Government on the local government pension scheme, on member communications and on the scale requirements in the Bill, but you will be pleased to know that those debates are behind us, Madam Deputy Speaker.
Today, there is just one issue left: mandation, or, as the Government prefer to call it, the reserve power—a power that sat in clause 40 until the noble Lords once again removed it from the Bill last Wednesday. The Government’s case for this power is straightforward: they want more pension investment in private markets and, by extension, more pension investment in the UK. That was the ambition behind the Mansion House accord, and it is an ambition that we share. We want to see the accord succeed, we want more productive investment, and we want pension capital to work harder for savers, but although the ambition is right, this policy is not. Mandation is the wrong lever to achieve those aims.
As the House has heard from me and my hon. Friend the Member for Wyre Forest (Mark Garnier) at each stage of this Bill, mandation is flawed both in principle and in practice. The Government may call it a reserve power, but everyone knows what it is: a threat hanging over pension schemes if they do not fall into line. The Mansion House accord was a voluntary agreement built on trust, with mutual commitments between industry and the Government. Mandation replaces trust with a threat in law. Why would the pension sector, or in fact any sector, ever try to come together and agree a voluntary pact with the Government again if it is hammered into law a few months later?
Mandation puts in statute a power that, though more limited in its current manifestation, could be put to all manner of uses. It cuts across the fundamental duty of trustees to act in the best interests of savers; instead, that duty is trumped by Government requirements in law. It means that pension savings, or a share of them, will be put to work to serve the interests of the Government, not the interests of the saver who wants their pension to provide them with a decent income in later life. Perhaps most seriously of all, mandation risks undermining public trust in the pension system. That is why the power is not just unnecessary; it is dangerous and has no place in this Bill.
I will now turn to the Government’s latest amendments on mandation that are before us today, which apply to the so-called savers’ interest test. At the moment, if a pension scheme believes that complying with the Government’s mandation power would not be in the members’ interests, it may apply for an exemption, but to secure one, it must show that compliance would cause “material financial detriment” for members. That is an extraordinarily high bar. The Government have heard the concerns raised in this House and the other place, particularly by Lady Bowles, and have now brought forward further amendments.
The Minister told us that the amendments will strengthen the exemption process. Well, they do make it slightly easier for schemes to argue that a mandated investment allocation may damage returns. Instead of having to prove that mandation “would” cause material financial detriment, schemes will now need to show that such detriment is just “likely”—we have gone from “would” to “likely”. Frankly, if the Minister thinks that this one-word change offers a truly robust safeguard, I urge him to think again.
The need for these amendments tells its own story: the Government accept that mandation risks conflicting with the duties that trustees and pension providers owe to savers. If no such conflict existed, there would be no need at all for an exemption process. The right to appeal, enhanced through today’s amendments, demonstrates that Ministers accept that mandation may force schemes away from doing what is in their members’ best interests. Under the amended Bill, schemes must still prove likely financial harm before they are allowed to do what is best for savers. That misunderstands the principle at the heart of fiduciary duty. Trustees should not need state approval to act in the best interests of their members. These amendments just tinker at the margins; they do not fix the flaw in the policy.
I have been talking in somewhat technical terms, but I want to remind the House of the consequences of what we are talking about. If the Government push pension schemes into the wrong investments, those investments underperform and savers end up with weaker returns, who carries the can? Not the Minister, who has stepped in valiantly today, and not the Government, who legislated for this power. It will be pensioners, who will retire with less. Let us remember whose pensions we are talking about here. Who is most likely to suffer if the Government turn out to be a poor asset manager? The millions of workers who contribute via auto-enrolment—people who have never chosen an investment strategy, but who trust pension providers to do the right thing on their behalf.
Those people are not poring over fund fact sheets; they are getting on with work and supporting themselves and their families, hoping that one day they will be able to retire with financial security. This policy asks those savers to place their trust not in pension managers, but in Government Ministers. In doing so, it risks undermining the very trust on which auto-enrolment depends. We can debate whether the level of auto-enrolment is right, but no one challenges whether it is a good thing overall. Yet the Government are putting at risk this success story, around which there has been great political consensus, and the consequences do not stop with pension savers.
What signal does this send to the wider investment community? We hear that major City reforms are to come in the King’s Speech, but will the market really greet those reforms with confidence if this Bill becomes law with mandation in it? Confidence would be created if investors could see that the Government are committed to making the UK a good place to invest in. Mandation sends the opposite message. It tells people that we have a Government who are prepared to go where the UK state does not usually go: to get involved in the allocation of private capital. It tells people that the Government will take a shortcut to getting investment in the UK by forcing pension schemes to do so, rather than fixing the underlying problems. I do not think that the Minister’s colleagues have really thought this through. The easy answer is rarely the right answer.
Where does that leave us? It leaves us at an impasse, with agreement on the diagnosis but profound disagreement on the prescription. We all want more pension investment in the UK, and the Conservatives support moving from a focus on cost to a focus on value. We support removing barriers to the Mansion House accord, but there is no consensus for state compulsion. Pensions belong to the people who earn them, not Ministers. I have yet to find anyone who wants to trust a politician with their hard-earned pension savings, but that is exactly what the Government are trying to force on the country’s savers through this Bill.
Today the Minister finds himself tasked with defending the indefensible, and one provision is preventing an otherwise good Bill from passing. The Government amendments make mandation less bad, but if something is wrong in principle, it does not become right in smaller doses. I leave the Government with one simple message: remove mandation, and the job is done—this Bill will pass.
Steve Darling (Torbay) (LD)
As the shadow Secretary of State has said, there is a lot to be welcomed in the Bill. In considering the Bill, we have looked to Australia and Canada, and at best practice throughout the world, and there is much we have drawn from. For the Liberal Democrats, the pensions world that we are looking to enter with this Bill is greatly to be welcomed. Up and down the United Kingdom—from Tobermory in Mull to Torbay in Devon—we desperately need greater investment in our economy. We must make sure that we have a productive economy, but mandation is not the way to achieve that.
National Savings & Investments
Caroline Nokes Excerpts(2 months, 2 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Parliamentary Secretary to the Treasury (Torsten Bell)
I would like to make a statement regarding National Savings & Investments. On 18 December 2025, NS&I notified the Treasury of an operational failure to comprehensively trace accounts for some customers who had passed away. The result of that failure is that not all savings were identified by NS&I and paid to the beneficiaries of their estates as they should have been. Specifically, processes failed to comprehensively trace some customer holdings where they were spread across multiple profiles or systems.
Hon. Members will be aware of historical challenges in financial services in this regard. For example, the Financial Conduct Authority took enforcement action in 2018 against Santander relating to the tracing of accounts following notification that a customer had passed on. That received significant attention at the time. However, what is now clear is that NS&I and its suppliers did not respond to those warning signs as fully as I and, more importantly, their customers, would expect, and nor did the last Government act.
Bereaved families, whose loved ones held accounts with NS&I, will rightly be anxious about this news, so let me turn to the action that we have taken and the further steps that we are putting in place today. Since being notified, the Treasury has ensured that external advisers, including EY and legal experts, have been engaged to identify the scale of the errors. Through this work, NS&I has reviewed over 34 million customer records. That work is ongoing, but it points to up to a maximum of around 37,500 customers, with up to £476 million in deposits, being affected. Three quarters of cases relate to the period between 2008 and 2025. The number is likely to fall in future, but although it represents less than 0.2% of NS&I’s customers, that is still far too many.
NS&I is not regulated by the FCA, but the Government expect it to live up to the same standards as regulated deposit-taking banks. It is therefore right that NS&I is apologising today. The Government’s priorities now are threefold. First—and immediately, to ensure that the problem is no longer taking place—NS&I has received written assurances from its customer-facing supplier Sopra Steria that the causes of the tracing issue have been addressed and will not affect customers going forward. Its previous supplier, Atos, has also committed to full co-operation, given that it was responsible for handling bereavement cases until 2025.
Our second priority is to ensure that we reunite beneficiaries of those customers who have passed away with any funds that NS&I holds. Those deposits belong to customers. Returning them in no way represents an additional liability to the taxpayer, and for the avoidance of doubt, let me spell out that those savings are 100% safe. The issue is about tracing and not the security of any funds, but it is important, none the less. NS&I has put in place a dedicated programme team and hired an additional 100 staff. I have asked it to publish a delivery plan in May detailing how they will take forward the work to reunite funds with their owners. This will cover: the number of cases affected; how NS&I will proactively contact representatives of estates to ensure they receive the funds that they are due, including interest on savings; and the compensation that, where appropriate, will be paid.
There is no need for individuals to waste money on a claims management company or solicitor. I reassure people that the onus is not on them but on NS&I to act—to contact estate representatives and to reconnect beneficiaries with the money they are due. Further information is available on the NS&I website and its contact centre is open seven days a week. I will also ensure that MPs have a dedicated means of contacting NS&I to raise any constituency cases directly.
Dealing with bereavement is always challenging, and I am sure that we all recognise that finding out, as party of that, that such errors have been made could be distressing. We are committed to ensuring that NS&I supports those who have experienced a loss by making the process for reuniting beneficiaries with their money as easy as possible. We also recognise that there may be tax implications for affected estates and want to avoid bereaved families facing disproportionate disruption and administrative costs as a result of the error. We are exploring what support we can provide and will set this out alongside NS&I’s delivery plan in May.
Current NS&I customers can access their accounts as normal. Any wishing to trace old accounts can use the tracing services direct through NS&I or the My Lost Account website. Because in the past some searches have focused too narrowly on searching for specific accounts, I have also instructed NS&I to make it simpler for people to search for all the accounts or products that they might hold.
Our third priority is institutional. NS&I plays an important role, helping the public to save and providing a material contribution towards Government financing. The organisation must continue to play that role while addressing the tracing issues that I have laid out today. It must also complete what has been a challenging business transformation programme. The programme was put in place back in 2020, but with little progress made in the previous Parliament, as the recent Public Accounts Committee report has set out. This Government have appointed David Goldstone, former chief operating officer at the Ministry of Defence, to support NS&I to bring the programme back on track.
With all this in mind, I also want to make sure that NS&I has the very best leadership in place. Effective from today, I have appointed Sir Jim Harra—former first permanent secretary at His Majesty’s Revenue and Customs—to take over as the chief executive of NS&I on an interim basis, to provide a fresh start for NS&I’s next phase of development. I also recognise the 22 years of public service of his predecessor Dax Harkins at NS&I.
As well as providing leadership to the organisation, Sir Jim will undertake a review over the next three months to spell out in detail the background to the tracing problem and to set out what lessons must be learned by NS&I. I have discussed this with Sir Jim and am confident that his extensive experience will help guide NS&I in the months ahead. I will ensure that Sir Jim’s review is shared with the Chairs of the Treasury and Public Accounts Committees upon completion.
NS&I holds over £240 billion of savings belonging to 24 million customers. It is an organisation that is valued by those saving with it and by this Government. I repeat NS&I’s apology to its customers and reiterate that every penny of their savings is safe, and—as always—they are 100% guaranteed by the Treasury. I commend this statement to the House.
Torsten Bell
As always, I thank my hon. Friend for his important question. He is absolutely right—the priority for us is to ensure that people are reunited with their money and that they do not incur costs in trying to get it back. That is why I have been so clear with NS&I over the past few months that it makes sure that it understands the problem it is dealing with and that it needs to set out a delivery plan as soon as May for how it will reunite people with their money. That will involve contacting representatives of estates in the first instance, and that is what people need to rely on. As I said, I want to be clear with the public today that the onus is not on them; the onus is on NS&I to contact the people whose funds deserve to be reunited with them, and that is what we will all be focused on.
Bobby Dean (Carshalton and Wallington) (LD)
I thank the Minister for advance sight of his statement and for the action he has outlined that the Government are already undertaking. He will know that customers often choose National Savings & Investments because it is Government-backed, and because that provides them with extra reassurance that their savings will be safe. The news that the money of tens of thousands of people was essentially lost for a period of time will be a hammer blow to trust in that institution, and the fact that these cases involve bereaved families makes it particularly damaging.
To restore trust in the institution, it will be vital that justice is served comprehensively and swiftly. Will the Minister confirm the estimated timeline for identifying and contacting every family affected? Have the Government committed not only to reimbursing or returning the money that the families are due, but compensating them fully to reflect the distress that has been caused? He has already mentioned interest; will he confirm that all that interest will be returned? Will legal costs also be reimbursed? Some of the bereaved families resorted to legal action to get what they believed they were owed, and I am sure that they will feel that they are entitled to be reimbursed on that as well. Will the Government now carry out a full independent investigation to fully learn the lessons of what happened and ensure that there will be much stronger oversight of the system going forward?
Torsten Bell
My hon. Friend is absolutely right that administering the affairs of deceased family members or friends is always challenging, both emotionally and administratively. That is why it is so important that we get this right, now that we have set out the scale of the problem. On his specific question, I encourage him to support constituents. That is why I have said that I will require NS&I to put in place a direct method of communication for MPs who wish to raise constituency cases, and obviously I will be happy to meet him or anybody else who has constituents affected.
Madam Deputy Speaker (Caroline Nokes)
I thank the Minister for his statement and for his very thorough responses.
National Insurance Contributions (Employer Pensions Contributions) Bill
Caroline Nokes ExcerptsMonday 23rd March 2026
(2 months, 2 weeks ago)
Commons ChamberRead Full debate National Insurance Contributions (Employer Pensions Contributions) Act 2026 View all National Insurance Contributions (Employer Pensions Contributions) Act 2026 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Notices of CCLA Amendments as at 23 March 2026 - (23 Mar 2026)
Madam Deputy Speaker (Caroline Nokes)
Division off.
Question agreed to.
Lords amendment 4 disagreed to.
Motion made, and Question put, That this House disagrees with Lords amendment 5.—(Christian Wakeford.)
Fuel Duty
Caroline Nokes Excerpts(2 months, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Graham Leadbitter
And the taxation being paid gives people back more services and better services. Things such as the removal of peak rail fares and the freeze on bus fares—the cap on bus fares has been put in place and is being tested in the north of Scotland—all really benefit people. Beyond that, however, more than half of taxpayers in Scotland do not pay more income tax than people do south of the border. That is a fact.
I urge the UK Government to consider many of these proposals. They could consider measures on bus fares and peak rail fares, but they also have the power over key taxation levers, including fuel duty. They need to make decisions quickly to give people more certainty and a little bit less risk about where things are going. Some things are not controllable, and I wish the Government did not have to consider them, because they are difficult, but the Government have levers that can make it a bit easier for people, and they should use those levers.
Madam Deputy Speaker (Caroline Nokes)
I will now announce the results of today’s deferred Divisions.
On the draft Employment Rights Act 2025 (Investigatory Powers) (Consequential Amendments) Regulations 2026, the Ayes were 368 and the Noes were 107, so the Ayes have it.
On the draft Higher Education (Fee Limits and Fee Limit Condition) (England) (Amendment) Regulations 2026, the Ayes were 277 and the Noes were 98, so the Ayes have it.
[The Division lists are published at the end of today’s debates.]
Youth Unemployment
Caroline Nokes Excerpts(2 months, 3 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Pat McFadden
In fact, we can hear them claiming it right now. But the truth is that the number of young people not in education, employment or training rose by 250,000 in the three years running up to the last election, and the Conservatives did precisely nothing about it. Youth unemployment has been rising since 2022, and youth employment never reached pre financial crash levels in any single year of the Conservatives’ 14 years in power. On top of that, the Conservatives kicked away the ladder of opportunity from young people when they presided over a shocking 40% fall in youth apprenticeship starts over the past decade.
The problem is long term and deep rooted. We will back young people with more youth apprenticeships, more chance of getting a job, and more help in overcoming the challenges they face. We have already announced a youth guarantee to help the young unemployed. It involves intensive work coaching, 300,000 work experience and training places, and subsidised work for long-term unemployed people aged 18 to 21. However, we will now go much further, with an explicitly pro young people package, aimed at helping them to learn and earn. From this summer, we will introduce hiring bonuses for businesses that hire a young person who has been out of work for six months. The bonus will be worth £3,000 per young person. There will also be bonuses of £2,000 for small and medium-sized businesses that hire young apprentices. Both bonuses can be combined if the young person hired has been out of work for six months or more. What a contrast with the Conservatives’ record on apprenticeships, which was to take opportunity away from young people—[Interruption.] They don’t like to hear it, but I am going to continue!
We are introducing new foundation apprenticeships in retail and hospitality, and new short courses in AI, electric vehicle charging point installation, electrical fitting and assembly, mechanical fitting and assembly, modular building, solar photovoltaic installation, and welding—the skills that young people need for the future. On top of that, the jobs guarantee, which we previously announced for the long-term unemployed, will be extended to those aged 22 to 24. Those young people will get six months of paid work, at 25 hours per week paid on minimum wage rates. Altogether, this will create 200,000 job and apprenticeship opportunities over the next three years.
This is our new deal for new times, offering new hope to the young people who are so often disparaged by the Conservatives as shirkers and scroungers. Our message is different: “We back you, we believe in you and we want you to succeed.” The package that I have announced is new investment of about £1 billion, and it comes on top of the funding that we announced at the Budget. Taken together, it is a package of support for young people worth about £2.5 billion. The existing exemption from employer national insurance contributions for workers under 21 will stay in place. This package is not just pro young people; it is pro business. I welcome the comments by the Federation of Small Businesses, which said that the provision is a “game-changer” and “a decisive step forward”, and rightly describes the package as “pro-jobs, pro-opportunities”. The package has also been welcomed by large employers such as Amazon, Kier Group and PwC, and the welcome goes beyond business. We know that a lot of young people face challenges in the labour market, and the chief executive of Mental Health UK, Brian Dow, said that the package
“will support young people to be ready for work and help organisations large and small to capitalise on the skills, talents and enthusiasm that young people have to offer.”
As well as the package, there is an urgent need to offer help to young people, given technological and demographic change. They need our help, and we cannot afford to lose their talent and energy. This is about not just young people, but their parents and grandparents. This is a generational challenge, because who does not want their child or grandchild to have a better chance in life? That is why investment in the young is a bond between the generations. It is an act of solidarity that is in the interests of the whole country, because if a young person has prolonged periods out of work, the scarring effects can stay with them for the rest of their life. A young person under the age of 25 on the health element of universal credit is now less likely to get a job than someone over 55 on the same benefit. We have to act to change that.
I am often asked, “So when will you do welfare reform?” Well, I tell the House that this is welfare reform. Putting work and opportunity at the heart of our system is the best reform we can make. Asking not just, “What are you entitled to?” but “How can we help you change your life?” is the change that the system needs. That view lies behind the changes that I am announcing in this package. I commend the statement to the House.
Pat McFadden
My hon. Friend says that young people deserve support; I believe that with the right support, young people want to work and to make the most of their life. He asked how people in his constituency would be helped. They could be helped through the hiring incentives that I have announced, and through the hiring bonuses that will allow small and medium-sized businesses to hire a young apprentice. The young unemployed in his constituency will be helped, because we are offering hope, ensuring that they get a chance, and offering the sense of pride, purpose and dignity that comes with having a job.
Steve Darling (Torbay) (LD)
The Secretary of State is correct to suggest that the Government inherited a crisis around youth unemployment. However, by introducing the hikes in national insurance contributions, the Government made that crisis into a catastrophe for young people, and supercharged the pressure on our youth across the United Kingdom. Rather than tackling what is now the root of the problem—the NIC hikes—these proposals are just papering over the cracks.
Young people’s childhoods are massively different from those that many of us experienced, especially hon. Members who grew up some years ago, so I pay tribute to the organisations that get young people to the right place, including Eat That Frog, Doorstep Arts, Sound Communities and South Devon college, who do incredible work. They help young people who have come through the pandemic, those who feel as though they are in a pressure cooker because of social media, which is gnawing away at their life, and who face a cost of living crisis.
The Liberal Democrats are concerned about an element of the Government’s policy: we do not understand why the Government are removing funding for apprenticeships for management. Surely managers are the people who support young people in their hour of need, as they go into work. Young people aspire to move into those positions eventually, so will the Secretary of State think again about the impact of the national insurance contributions hike on hospitality, retail and tourism industries in areas like Torbay?
I was interested to hear the Secretary of State speaking on the “Today” programme on Monday. The presenter challenged him by suggesting that the NIC hike had jacked up youth unemployment, and the Secretary of State appeared to agree with that. Finally, an article in The Times suggested that the Government are thinking about making young people second-class citizens through their changes to disability benefits; I would welcome comments from the Secretary of State about that.
Universal Credit (Removal of Two Child Limit) Bill
Caroline Nokes ExcerptsMonday 23rd February 2026
(3 months, 2 weeks ago)
Commons ChamberRead Full debate Universal Credit (Removal of Two Child Limit) Act 2026 View all Universal Credit (Removal of Two Child Limit) Act 2026 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 23 February 2026 - large print - (23 Feb 2026)
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
With this it will be convenient to discuss the following:
Clauses 2 and 3 stand part.
New clause 1—Removal of two child limit: report on effects on children in households subject to the benefit cap—
“(1) The Secretary of State must, within six months of the passing of this Act, lay before Parliament an impact assessment of the effects of this Act on households and children.
(2) The assessment under subsection (1) must include an estimate of the total number of households, and the number of households in poverty, which will not receive—
(a) an overall increase in benefit support from the abolition of the two child limit from April 2026 due to being subject to the overall benefit cap, and
(b) the full potential increase in benefit support they would have been entitled to from the abolition of the two child limit from April 2026, but for the fact that they became subject to the overall benefit cap following any increase provided through the abolition of the two child limit, and the assessment must include the total number of children in such households, and the impact on the number of such households in poverty.
(3) The estimates made under subsection (2) must include analysis at the following levels—
(a) country,
(b) county,
(c) local authority, and
(d) parliamentary constituency.”
This new clause would require the Secretary of State to undertake an assessment of the effects of the Act on households and children, including the number who will either not receive an increase in benefit support, or the full potential increase, because they are subject to the benefit cap.
New clause 2—Report on the effects on households with a disabled family member—
“(1) The Secretary of State must, within 12 months of the passing of this Act, lay before Parliament an impact assessment of the effects of this Act on the number of households in poverty with more than two children that have at least one disabled family member.
(2) The assessment under subsection (1) must also consider—
(a) the cumulative impact of changes to universal credit since July 2024 on households in poverty that have at least one disabled family member, and who are affected by this Act, and
(b) any changes in the standard of living for households with—
(i) three or more children, and
(ii) at least one person in receipt of the Universal Credit health element, arising from implementation of this Act.”
This new clause would require the Secretary of State to publish an impact assessment of the effects of the Act on households in poverty that have at least one disabled family member.
New clause 3—Review of the impact of the Act on child poverty, destitution, and wider social and economic outcomes—
“(1) The Secretary of State must, within 12 months of this Act coming into force, review the effect of this Act on—
(a) overall levels of child poverty in the UK;
(b) levels of destitution and deep poverty among households with children;
(c) households in receipt of Universal Credit which include children;
(d) educational outcomes for children in households affected by poverty;
(e) physical and mental health outcomes for children in households affected by poverty; and
(f) longer-term impacts on economic participation, workforce skills, and demand on health and welfare services arising from child poverty and destitution.
(2) The Secretary of State must lay before Parliament a report setting out the conclusions of the review.”
This new clause would require the Secretary of State to undertake a review of the effects of the Act on child poverty, destitution, and wider social and economic outcomes.
New clause 4—Assessment of the impact of the Act on child poverty—
“(1) The Secretary of State must, within 6 months of the passing of this Act, undertake an assessment of the effects of this Act on children and child poverty.
(2) The assessment under subsection (1) must consider households with three or more children which are subject to, or as a result of this Act become subject to, the benefit cap.
(3) The assessment must estimate the annual cost to the Exchequer of—
(a) implementation of this Act, and
(b) implementation of this Act if households were not subject to the benefits cap.
(4) The Secretary of State must consult the following organisations in undertaking the assessment—
(a) Child Poverty Action Group,
(b) End Child Poverty Coalition,
(c) Save the Children UK,
(d) The Children’s Society,
(e) Barnado’s UK,
(f) Action for Children,
(g) Joseph Rowntree Foundation, and
(h) any other organisation that he deems appropriate.
(5) The Secretary of State must lay before both Houses of Parliament a copy of the assessment.”
This new clause would require the Secretary of State to undertake an assessment of the effects of this Act on children and child poverty in consultation with a number of relevant specialist organisations and also assess the cost of removing the cap.
Sir Stephen Timms
I am sure that we will turn to the points that my hon. Friend makes in a few moments, but I reassure her that we will undertake a thorough evaluation of the impacts of the strategy. We will publish regular updates, and I think she will find there the information that she is interested in.
We cannot leave millions of children to succumb to the damaging impacts of poverty. The Government want instead to invest in children and in Britain’s future.
Rebecca Smith (South West Devon) (Con)
I will speak in part to amendments 1 and 2, although we will not vote on them this evening. Essentially, I am speaking because we do not believe that scrapping the two-child limit and lifting it in this way is the way to tackle child poverty.
When the Conservatives introduced the two-child limit in 2017, we did so for one simple reason: fairness. We believed then, as we do now, that people on benefits should face the same financial choices about having children as those supporting themselves solely through work. Nine years later, we stand by that principle.
The welfare state should be a safety net for people in genuine need, yet too many people feel that the welfare system has drifted from its original purpose. They see a system that rewards dependency while working families and individuals shoulder the tax burden. The two-child limit is a way of saying that work should pay, that taking responsibility should matter and that the system should stand with those who pull their weight.
Rebecca Long Bailey (Salford) (Lab)
I speak in support of new clause 4, tabled by my right hon. Friend the Member for Hayes and Harlington (John McDonnell), me and others, and I will try to be as brief as I can. Scrapping the two-child limit in full remains the single most impactful step we can take to reduce child poverty, and will lift 450,000 children out of poverty by 2030. When combined with other measures in the child poverty strategy, more than 550,000 children will be lifted out of poverty by the end of the decade.
Some Members of this House have said, “How can the country justify this multibillion-pound spend?” It is around £3 billion a year, but child poverty costs the UK economy £39 billion annually—more than 10 times as much. That £39 billion reflects poorer health, lower educational attainment, increased pressure on public services and lost economic potential. Investing £3 billion to reduce a £39 billion problem is not reckless spending; it is a highly targeted, cost-effective investment with long-term returns. It is preventive policy at its very best.
Other Members have asked why taxpayers should support larger families. Well, the honest truth is that only a very small number of families have more than four children, and almost all are working hard to provide for them. The two-child limit has had no measurable impact on family planning and has not influenced fertility rates; it simply punishes children who are already here. Every child, regardless of birth order, deserves enough food, a safe home and a fair start in life. When children are supported to thrive, they do better in school, stay healthier and contribute more fully as adults, and that benefits all of us.
Those who argue that support should not go to families out of work should remember that six in 10 children affected by the two-child limit live in households where at least one parent works, and those families are taxpayers too. As my mum says, there but for the grace of God go I. A crisis can happen in an instant at any moment, and bereavement, illness, redundancy or family breakdown can push any household into temporary reliance on universal credit. A humane and flexible social security system exists to provide stability in those moments of crisis.
I urge all Members to support the passage of the Bill today, but it must be just the start and we must go further. Alongside scrapping the two-child limit, we have to address the wider benefit cap, which was introduced in 2013. It has bored down on the backs of many families like a rucksack full of lead. Organisations including the Child Poverty Action Group, the End Child Poverty Coalition, Save the Children UK, the Children’s Society, Barnardo’s, Action for Children and the Joseph Rowntree Foundation have all highlighted the damaging impact of the overall cap. It places arbitrary ceilings on support, regardless of rent levels, local costs or family size. It disproportionately affects single parents—overwhelmingly women—and families in high-cost areas. It drives rent arrears, temporary accommodation and homelessness, and the evidence is clear that it does not meaningfully increase employment; it increases hardship.
If we are serious about tackling structural poverty, we cannot remove one barrier while leaving another firmly in place. Lifting the overall benefit cap would complement the removal of the two-child limit, ensuring that the gains we make today are not clawed back through arbitrary ceilings that fail to reflect real living costs. I applaud the Government for scrapping the two-child cap, which is the right thing to do, but I hope that the Minister can give us some assurances that his next step will be to look at lifting the benefit cap.
Several hon. Members rose—
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
Order. I remind Members to speak specifically to the amendments.
Siân Berry (Brighton Pavilion) (Green)
The Government should have brought this Bill forward as soon as they were elected 19 months ago, but they failed to do so. They could have listened to the families and children—with more than 200,000 children affected—enduring the overall benefit cap before making their final plans, but they failed to do so. Ministers still could have listened to the many hon. Members, including myself, who said on Second Reading that the policy was too narrow. They could have widened the scope of the Bill, but they failed to do so. The Bill is not wrong, but it fails to do right by far too many children.
I speak in support of new clause 1, which has wide cross-party support. It would mandate a full assessment within six months of the families left in poverty by the failure of the Government to tackle the overall benefit cap, showing its impact on each of our constituencies and the families we represent. We need to know who is left out from the help provided in this Bill, including those who are left in poverty.
We also need to know the wider impacts as the change takes hold. That includes the removal of exemptions, because this Government are seeking at the same time to remove people from the few qualifying benefits that exempt people from the cap, including disability benefits. This wider attack on benefit claimants threatens to make the gap in the Bill even worse.
John McDonnell
The claim that there was no money left was disproved time and again. The argument that the Tories put forward was that we were spending too much on tackling poverty, on paying teachers and on our health service, but the crisis was a result of speculation, due to deregulation under the Tories for over 30 years—
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
Order. The right hon. Gentleman is experienced enough to know that he has strayed some distance from the Bill.
John McDonnell
True, true, so I will bring this section of my remarks to a fairly rapid conclusion. What happened was that the Chancellor at that time—
The Second Deputy Chairman of Ways and Means
No, we are going to return to the amendments to the Bill.
John McDonnell
My amendment to the Bill would tackle the inequity that was introduced as a result of George Osborne’s policies, which targeted children and disabled people. That is what they did; that is what that was about. What the Conservatives have done today is what they did in 2013 when they introduced the policy. They thought, “How can we construct a moral argument for this?”, so they reverted to the 19th-century Poor Law and the argument of less eligibility. The idea behind the 19th-century Poor Law was that someone in need of support should never be raised to the level of decency of an ordinary labourer. This policy echoed the argument from the 19th century that we cannot allow people to be raised out of poverty; they must remain in poverty. That is what the Poor Law did, and that is what this policy did. It thrust hundreds of thousands of children into poverty and deep poverty.
Kirsty Blackman
That is absolutely true. I accept the rebuke, which is completely reasonable. It is not the parents’ fault—I should have been far clearer about that. I tend to think that poverty and a lack of privilege are caused by a lack of choices. Poverty means that people cannot make mistakes, while privilege means that they can. I can make mistakes because I have enough of a financial cushion and family support. For people who live in poverty, without family support or with poor mental health, one mistake can mean very quickly spiralling into an un-rescuable situation. That is how I think about privilege: those situations are not anybody’s fault. Just because I am lucky enough to be in a more privileged position, I am allowed to make far more mistakes than someone who is struggling on the breadline. How is that fair?
Conservative Members made comments about people working hard. A lot of the people who are on universal credit while working are in the jobs that we really need people to do. They work as carers, shopworkers and all sorts of other jobs that not one of us would say are easy. I do not know if any Members have worked as care workers. The hon. Member for Bournemouth East (Tom Hayes) has been a carer and knows how physically and emotionally demanding that is. Someone working in care and being paid the minimum wage is doing a physically demanding, very necessary and hard job, yet they might still be in receipt of universal credit because they earn so little. I hate the distinction made between people who work hard and people who do not, when that is based simply on salary—not the fact that lots and lots of people work hard for very little money, because the minimum wage is not a real living wage but just a minimum wage.
I think I have been clear about some of the issues raised in the debate, including the benefit cap, issues faced by disabled family members and disabled children, and the effect of these measures on child poverty, destitution and wider social outcomes. On that last point, all of us, and particularly Governments, could probably do more about the impacts of poverty and ensuring that those are also measured.
Some of the monitoring and evaluation suggestions for the child poverty strategy look at the cold, hard measure of how many children are in poverty, and at how those numbers are reduced or increased as things go on, but they look less at some of the impacts. To be fair to the hon. Member for South West Devon, how do such measures impact on school readiness? Can we see more information on whether the Government’s plans have had an impact on school readiness? Has there been an improvement in the mental health of young people as a result of these measures on child poverty?
I still think that the Government are deeply unambitious and they could do more on the benefit cap. They could also do more, for example, to match the Scottish child payment; child poverty has been reducing in Scotland because that is the key mission of our SNP Government. It is worth looking at what works anywhere in these islands, and seeing whether it could or should be replicated to ensure that we reduce poverty and protect children, and that everybody has those opportunities—no matter how much their parents earn, how many children are in the family and whether there is a disabled family member. It is important that every one of us champions every child in our constituencies, and tries to ensure that they get the best possible start in life.
Sir Stephen Timms
I thank all Members who have contributed to the debate. Interventions in the child poverty strategy will lead to the biggest expected reduction in child poverty over a Parliament since comparable records began. I well understand the concerns of those saying we should go further, and it is certainly right to urge the Government to do that, but let us recognise how big a change this will be. Removing the two-child limit is the key step. It will help children to live better lives, fulfil their potential, have better mental health, do better at school, and thrive in the future. That change is in the national interest.
The amendments propose a number of reports on different topics, and I am grateful that everybody who has spoken to them has indicated that they support the Bill. New clauses 1 and 4 ask the Secretary of State to report on the effect on children in households subject to the benefit cap. Indeed, new clause 4, tabled by my right hon. Friend the Member for Hayes and Harlington (John McDonnell), fulfils a commitment that he made on Second Reading to devise an amendment that would have that effect. It is an important point, and something we need to monitor carefully, but it is in the best interests of children to be in working households—and keeping the benefit cap in place protects the incentive to work. Work incentives are important. Under the policies of the last Government, far too many people gave up on work and concluded that it was not worth their while. We want it to be clear to everyone that it is worthwhile to be in work, and the Universal Credit Act 2025, enacted last summer, made an important step in that direction.
Removing the two-child limit does not undermine work incentives. From time to time, the Conservatives suggest that it does, but actually it does not. Removing the two-child limit increases the income of many families in work and increases the reward for work, and it does not undermine work incentives.
Sir Stephen Timms
I beg to move, That the Bill be now read the Third time.
Scrapping the two-child limit is an investment in the future of children and of the country. Two million children will benefit from this Bill. We will be held to account on progress through the monitoring and evaluation arrangements we have put in place to ensure that the change we are making is genuinely lasting. I want to thank every Member who has contributed to these debates. Removing the two-child limit from universal credit will help more children to fulfil their potential, to grow up make a positive contribution and to be part of a fairer, stronger country. I hope that the whole House will now support this vital measure.
Pensions and Social Security
Caroline Nokes Excerpts(4 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Minister for Social Security and Disability (Sir Stephen Timms)
I beg to move,
That the draft Guaranteed Minimum Pensions Increase Order 2026, which was laid before this House on 12 January, be approved.
Madam Deputy Speaker (Caroline Nokes)
With this it will be convenient to discuss the following motion:
That the draft Social Security Benefits Up-rating Order 2026, which was laid before this House on 12 January, be approved.
Sir Stephen Timms
In my view, the provisions in the instruments are compatible with the European convention on human rights. The draft Social Security Benefits Up-rating Order will increase relevant state pension rates by 4.8%, in line with the growth in average earnings in the year to May to July 2025. It will increase most other benefit rates by 3.8%, in line with the rise in the consumer prices index in the year to September 2025, so the regular formula has been used.
The order commits the Government to increased expenditure of £9 billion in 2026-27, of which £6 billion will be from state pensions and pensioner benefits, £2 billion from disability and carers benefits, and £1 billion from other working-age benefits. A further £2 billion of expenditure on working-age benefits will be incurred in 2026 as a result of uprating decisions made under separate legal powers in the Universal Credit Act 2025, which will set new rates for universal credit and income-related employment and support allowance.
Let me say a little more about each of the benefits being uprated in turn. First, on pensions, the Government’s commitment to the triple lock means that the basic and full rate of the new state pension will be uprated by the highest of the growth in earnings or prices or 2.5%. That means that the uprating will be by 4.8% for 2026-27. As a result, from April the basic state pension will increase from £176.45 per week to £184.90, and the full rate of the new state pension will increase from £230.25 at the moment to £241.30 per week.
Sir Stephen Timms
I think perhaps the point that the hon. Gentleman is making is that it does not fulfil the aspirations of the essentials guarantee campaign, with which he and I are familiar, and that is true. However, April’s above-inflation uprating will be the first of four such upratings, so there will be a similar over-inflation uprating in each of the following three Aprils. It will not end up at the level on which the essentials guarantee campaign has focused, but let us see what happens beyond the period for which we have made these announcements. As he said, it is an historic change of direction for public policy.
Benefits for people in England and Wales who have additional costs as a result of disability or ill health will also increase by 3.8%. These include disability living allowance, attendance allowance and personal independence payment. The increase will also apply to carer’s allowance.
The draft Guaranteed Minimum Pensions Increase Order 2026 sets out the yearly amount by which the guaranteed minimum pension part of an individual’s contracted-out occupational pension, earned between 1988 and April 1997, must be increased when it is being paid. The increase is paid by occupational pension schemes, and helps to provide a measure of inflation protection for people in receipt of contracted-out occupational pensions earned between 1988 and 1997. The law requires that GMPs earned between those two dates must be increased by the percentage increase in the general level of prices measured the previous September, capped at 3%. The September 2025 inflation figure— or CPI—was 3.8%, so the increase for the financial year 2026-27 will be 3%.
The 3% cap provides pension schemes with more certainty, allowing them to forecast their future liabilities more reliably. That is important when they are considering their funding commitments. The measure strikes a balance between, on one hand, protecting members against the effects of inflation, and on the other, not increasing scheme costs beyond what schemes and sponsoring employers can reasonably afford.
The draft Social Security Benefits Uprating Order 2026 will, if Parliament approves it, commit the Government to increased expenditure of £9 billion in the next financial year. Changes will mainly come into effect from 6 April this year and apply for the tax year 2026-27. The order maintains the triple lock—which benefits pensioners in receipt of both the basic and new state pensions—raises the level of the safety net in pension credit beyond the increase in prices, increases the rates of benefit for those in the labour market, and increases the rates of carers benefits and benefits to help with additional costs arising from disability or health impairment.
The draft Guaranteed Minimum Pensions Increase Order requires formally contracted-out occupational pension schemes to pay an increase of 3% on GMPs in pensions earned between April 1988 and April 1997, giving a measure of protection against inflation, paid for by the scheme. I commend the orders to the House.
Rebecca Smith (South West Devon) (Con)
I wish to reassure the Minister about something that I said in last week’s debate on the two-child benefit cap. I shared something of my story, and said that we had lost child benefit as a result of the Labour Government coming into office in 1997. I was convinced I had said “family credit”, which was what I was supposed to say. When I read back over Hansard, I realised that, in my haste to get my point across, I had said the wrong thing, which explains why I caught sight of the Minister’s perplexed face from across the Dispatch Box. I have also corrected the record through Hansard.
I can confirm that the Opposition support the usual increase in the guaranteed minimum pension, and the uprating of social security benefits. However, given that this debate is largely a formality and there will be no vote on the motions, it is a good opportunity to take a step back and reflect on the pensions and benefits system more broadly—in the context of the motions before us, of course.
First, let me highlight what I call the “benefits barbell”. At one end is the working-age welfare bill, which keeps getting heavier; at the other is the eye-watering cost of public sector defined-benefit pensions. In the middle of those two heavy weights is the hard-working taxpayer, straining under the load. Welfare and pensions both matter—they are pillars of a decent society—but it is Britain’s taxpayers who do the heavy lifting. They are the ones who get up before dawn, commute in all weathers and keep the economy moving. Without their efforts or even more Government borrowing, there would be no welfare state at all, and we cannot pile more weight on to their shoulders indefinitely.
The Secretary of State for Work and Pensions has already admitted that the long-awaited Timms review will not involve making welfare savings and is not likely to be published before 2027. It seems that this Government are shunning any attempts at reform over the coming year, and yet again, it is taxpayers who bear the cost of this delay. Right now, the UK is on the verge of becoming a welfare state with an economy attached. Over 40,000 people were signed off work every day by GPs over the last year, according to the Centre for Social Justice. Over 5 million people are claiming benefits with no work requirements, which is equivalent to over half of London’s population.
Concerningly, that number includes more than 300,000 people aged 16 to 24—young people with promising lives ahead of them whose ambitions are being stifled by a benefits system that would rather write them off. Labour is presiding over a youth unemployment crisis and seems unable to offer long-term solutions. There are already nearly 1 million young people in the UK who are not in education, employment or training. Over 700,000 university graduates are out of work and on benefits. One and a half years after taking office, this Government are still failing to tame the runaway benefits bill and rising unemployment rates. By contrast, the Conservative plan to get Britain working again will tackle youth unemployment by offering young people a first jobs bonus, which they can use to save for their first home.
Living within our means is one of those sensible, mundane things that gives the Conservative party its reputation as a safe pair of hands for the economy. Of course, making welfare savings is far less likely to grab headlines—scrapping the two-child benefit cap or rolling out more free school meals is a far easier win—but getting the deficit under control is crucial to a healthy economy. When the Conservatives took office in 2010, the Government were running a deficit of 9%. By the time covid struck, we had brought it down to under 1%. That, in turn, enabled us to provide generous support to individuals and businesses during lockdowns.
As I said in the debate on the two-child benefit cap last week, keeping the limit would have saved the taxpayer £2.4 billion in 2026-27, rising to £3.2 billion in 2030-31, yet our current Prime Minister would rather throw some red meat to his Back Benchers than exercise fiscal discipline. He has caved in to their demands, even though scrapping the two-child benefit limit was previously ruled out by the Chancellor and was conspicuously absent from Labour’s manifesto.
Conservatives believe in fairness for the working parents who make difficult choices about whether they can afford another child. Many working families do not have incomes much higher than the threshold for universal credit but are paying for others through their taxes. Why should we make those parents bear the double burden of supporting their own children and subsidising other people’s? A fair system should not simply exempt families on benefits from making tough choices.
Speaking of fairness, the issue of passported benefits desperately needs investigating. Last week, I highlighted the shocking statistic that one in four full-time UK workers would be better off on benefits than in work, but something that often gets overlooked is that people on universal credit also gain access to a raft of discounts and additional benefits such as free prescriptions, discounted broadband, healthy food cards and special savings accounts. There are over 20 of these schemes sprinkled across multiple Government Departments. Taken together, passported benefits give some families who are already on universal credit over £10,000 a year in extra support, costing the taxpayer over £10 billion, according to a new report from the think-tank Onward. These benefits need rationalising and streamlining within universal credit. Otherwise, we will continue to face three serious problems.
First, passported benefits disincentivise people from entering employment. Any sensible person would think twice about starting a job if they faced a cliff-edge denial of additional benefits worth thousands of pounds once their universal credit tapers away. Secondly, we have a two-tier system. As a result of these linked benefits, individuals just outside the universal credit threshold often face greater financial hardship than benefit claimants. Thirdly, for those who really do need these extra schemes, there is a labyrinth of bureaucracy that slows down the process of getting help. These piecemeal entitlements distort the system. From a quantitative perspective, it is harder to see which poverty interventions are actually having a positive effect. It is also incredibly difficult for everyone to see whether this Government are succeeding at reducing poverty.
I welcome the Government’s new emphasis on deep material poverty as a headline poverty metric, which is a far more holistic measure that captures how poverty impacts people’s daily lives and whether they can afford necessities. Last week, we heard endlessly that the Government’s child poverty strategy and the scrapping of the two-child benefit cap will bring half a million children out of poverty, but it is worth noting that we are talking about relative poverty. That can never be eradicated, because it refers to a household income below 60% of the median household income. The only way to reduce relative poverty is to raise the incomes of the poorest faster than the middle or compress the income distribution. An overemphasis on relative poverty has underpinned a misleading left-wing argument that exaggerates the need for income redistribution. I worry that we will end up paying people to be so-called middle-class if we continue as we are.
At the heart of Conservative philosophy is a belief in personal responsibility—taking control of our future through hard work and aspiration. If we are serious about tackling child poverty in the long term, it is vital to deal with the effects of intergenerational worklessness and not just rely on social security. Children in long-term workless households are four times more likely to be materially deprived and 10% more likely to end up workless themselves. For every parent who does not go out to work, there is a child who misses seeing a positive example of work modelled to them—the early alarm clock, the daily routine, the reward for an honest day’s work and the ability to save up to buy important things. That is not to say that there are not those in dire circumstances for a vast number of reasons, but ultimately, when we are looking at people in general, that is the reality we need to deal with. Under our watch, the number of children in workless households fell consistently. Under Labour, the number has reached a nine-year high, with 1.2 million children now living in homes where no parent has worked for over a year.
Turning to the topic of personal independence payments, I would like to ask the Minister about a disabled constituent I caught up with at the weekend. She is a veteran who served in the Royal Navy for 19 years and is now an unpaid carer for her elderly father. She works full time, mainly from home, and commutes to London a few times a month. She had a Motability scooter, which enabled her to get to the office and around London when required, but after her last PIP review, which took place over the phone, she lost her higher rate of PIP and thus her scooter. She then received a puzzling letter from the Department for Work and Pensions, which wrongly claimed that full-time work indicated she had reasonable mobility, despite the fact that her entire home is adapted for her accessibility requirements.
My constituent is a highly capable woman who is skilled at advocating for herself as well as her father and, indeed, her fellow veterans, but she admitted that she felt too stressed to open the letter for a few weeks, meaning that the reconsideration window had timed out by the time she fully processed the DWP’s decision. For context, she has also been diagnosed with complex post-traumatic stress disorder following a traumatic experience in the military and is currently on a long waiting list for treatment. Statistically, she is unusual; fewer than one in six PIP claimants are in employment.
It seems bizarre that the DWP assessors are happy to downgrade someone in this situation, who is in work and genuinely needs the higher rate of PIP to help her carry out that work, yet the Department seems reluctant to stem the tide of benefits claims from people with less severe mental health issues. That is why a Conservative Government will end sickness benefits for low-level mental health problems, to ensure that support is targeted at people who need it most. I welcome the Government’s commitment to increase the number of face-to-face PIP assessments to 30%, up from the very low rate of 5% in 2024, but I urge them to be even more ambitious with their target, to ensure that constituents like mine are accurately assessed and receive the help they need.
In conclusion, as I return to the image I began with, the barbell is getting heavier by the year, with welfare on one side and pensions on the other, and still the hard-working taxpayer stands in the middle doing all the heavy lifting. The Government are doing far too little to ease that pressure. Working families are paying the price for a system that grows ever more expensive, while true reform moves at a crawl. It is time for a welfare system that is fair to those who need support and fair to those who pay for it.
Madam Deputy Speaker (Caroline Nokes)
I call the Chair of the Work and Pensions Committee.
Debbie Abrahams
I am familiar with the child payment, but I need to understand it in the context of what else is happening in Scotland. I am aware of it, and I think it is an interesting way for Scotland to try to address the issue. We had a meeting with the Children and Young People’s Commissioner Scotland and were impressed with what she was doing, but I will reserve judgment until I understand it a little more in the round.
Only last week, the Joseph Rowntree Foundation published new analysis:
“In 2021-24, the average person in poverty had an income 29% below the poverty line, with the gap up from 23% in 1994-97”.
If we use equivalised figures, that means that couples without children are living on less than £12,500 a year, and couples with two children under 14 get about £17,500 a year. Social security is complex, but looking at deep poverty, as my right hon. Friend the Minister is doing, is important. If we are to avoid the appalling situation with NEETs that we have inherited, that is what we need to do.
Of the 14.2 million people living in poverty identified in JRF’s most recent poverty analysis, 6 million are in severe and persistent poverty, and more than half are disabled or live in a disabled household. Although I recognise the significant moves that this Government have made to address the inadequacy of working-age social security support to tackle the poverty and cost of living crisis that people are experiencing, I personally think we need to be a bit bolder.
As I said last week, I want to see us be clearer about our vision and values, which define what our social security system is for. It is 80 years since the National Insurance Act 1946, which was introduced in response to the Beveridge report and the outcomes and appalling circumstances after the second world war. I believe we need a new social contract that the British people can buy into and that spells out how all the elements of a comprehensive 21st century welfare state work together to deliver for them.
Our social security system, like our NHS, should be there for all of us in our time of need. It should protect us from poverty if we lose our jobs, are born with or acquire health conditions or disabilities, and when we grow old. It should also be there for us if and when we need extra support, become carers and, sadly, lose a loved one, but it cannot work in isolation; it needs to be considered in conjunction with our health and social care, education and skills, and business and employment systems in particular, but there are more.
Without a fit and healthy working-age population, a skilled workforce and a fair employment system providing quality, well-remunerated jobs, our economic productivity is known to fall, and our welfare system as a whole then comes under threat. As an example, Health Equity North’s “Health for Wealth” report shows that improving the health of the north to the same level as the rest of the country would add an extra £18.4 billion to the economy through enhanced productivity while reducing demand on the NHS.
Last year, the Work and Pensions Committee commissioned Health Equity North to report on what income could be generated through increasing returns to work for people in receipt of universal credit by just 5%. Its estimates show that that would yield an extra £20 billion over the life of this Parliament, with a return on investment of between £5.21 and £6.63 for every £1 of employment support invested. That is the way that we will reduce DWP spending and increase growth.
I look forward to seeing how the “Get Britain Working” and “Keep Britain Working” programmes, such as Connect to Work and the vanguards, are expanded. They are fantastic examples of how we can proceed. I was so impressed when I met organisations delivering Connect to Work. The Work and Pensions Committee had a session last week with Sir Charlie Mayfield and small businesses to see how they could be involved in that, and I hope that we can expand and build on this work.
Universal Credit (Removal of Two Child Limit) Bill
Caroline Nokes ExcerptsTuesday 3rd February 2026
(4 months, 1 week ago)
Commons ChamberRead Full debate Universal Credit (Removal of Two Child Limit) Act 2026 View all Universal Credit (Removal of Two Child Limit) Act 2026 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Clive Lewis
I am listening to the hon. Gentleman. Conservative Members always seem to portray this as an individual moral failing. That is how they see welfare, when actually it is about a collective insurance against economic risk. That is how we see it. You see it as a moral issue; we see it as an economic one.
Madam Deputy Speaker (Caroline Nokes)
Order. It is not me who is being referred to; it is the hon. Gentleman.
Dr Evans
That is far from the truth. I am simply arguing that we need to be fair to those who need the system to support them and those who contribute to it. I worry that we are pulling at the fabric here.
It is interesting that the debate in the House is slanted towards the Labour view, because they have the numbers. If we look at the public polling, however, we know that, consistently, 60% of the public support the cap and only 30% want it to be taken away. Why is that? Fundamentally, they understand that there has to be give and take. The worry here is that someone will suddenly get £3,650 with no contractual change within society to better themselves.
The money could be better spent. To take an example from the last Government, in 2021 they changed the UC slider from 63% to 55% to encourage work. That cost about £2.5 billion; we are talking about £3 billion today. We have heard from the Government how this will be paid for. It is not hypothecated. The pharmacist I was talking about and the sister of the hon. Member for Bishop Auckland (Sam Rushworth) will pay for this, as will the publican who goes out to work. They will see their taxes rise. That is the contract that I am worried about.
Susan Murray (Mid Dunbartonshire) (LD)
It seems that with increasing frequency I stand in this place welcoming Labour U-turns, and today I welcome yet another. The decision to lift the two-child cap is clearly the right moral choice, and it will lift hundreds of thousands of children out of poverty.
For those in Scotland, this is a particularly welcome change. There will no longer be any need for the Scottish Government to divert funds from social care and council services to the Scottish child payment. With that in mind, I urge the hon. Member for Aberdeen North (Kirsty Blackman), who is on the Bench behind me, to discuss with her colleagues in Holyrood the merits of using some of the projected £155 million savings to help fund a new health and care hub for the people of Bearsden and Milngavie in my constituency.
I am aware that some people do not support lifting the cap. The change is set to cost UK taxpayers over £3 billion annually by 2030—clearly an enormous sum. Over the past year, we have seen that this Labour Government are set on making working people pay for their changes through tax band freezing, national insurance rises and pension changes. With that in mind, I urge the Government to look seriously at the Liberal Democrat proposals that aim to raise tax revenue. First, banks have made record profits—an estimated £50 billion in a single year—off the backs of hard-working people. We Liberal Democrats believe that it is only fair that the banks pay back some of that money. A windfall tax on these enormous profits could raise £7 billion per year, without placing any more strain on people who are already struggling.
On top of that—I know that Conservative Members will not be happy to hear this again—we need a customs union with Europe. Trade deals with China and India are not unwelcome, but the biggest opportunity is right on our doorstep: an extra £90 billion a year in tax revenue that does not require going cap in hand to those who stand against our values or who facilitate our enemies.
Lifting children out of poverty does not have to put a further strain on working people. We can create a fair tax system in which companies pay their fair share to help those from whom they profit.
Madam Deputy Speaker (Caroline Nokes)
Order. May I gently remind the hon. Lady that this is a very specific debate about the removal of the two-child limit and not a wider debate on tax policy?
Susan Murray
I apologise.
Removing the two-child cap is a vital step, and I hope that the Government choose to listen to more Liberal Democrat proposals.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. For the assistance of Back Benchers who still wish to speak, I am about to remove the time limit. [Interruption.]
Andrew Pakes
I think that my community is full of wonderful British people—people who stand up for British values, and who go out every single day and work to do the best for their children and community. If you want to have a fight based on British values, bring it on, because every day Labour Members will defend—
Madam Deputy Speaker (Caroline Nokes)
Order. I respectfully remind the hon. Gentleman not to use the word “you”. He was suggesting that he might like to have a fight with me, and that would not end well.
Andrew Pakes
I apologise, Madam Deputy Speaker. I am wearing a deep heat patch for my bad back, so there would be no fight from me today. I apologise to the House for the passion I have for British values and the hard work of people in my community, who I will stand up for every day against the plastic patriots and others who seek to attack them.
Antonia Bance
I say to the people in my constituency and elsewhere who have raised questions with me about this policy that in order to will the ends, you have to will the means. Save the Children published this morning some polling showing that 78% of the country want to see child poverty cut. The fastest and most effective way to cut child poverty is to get rid of this punitive, gross policy that artificially inflates the number of children in poverty and creates an escalator to get more into poverty every day, with every child born.
To the Opposition parties, I would say this. I hear you say to these families, “Go out and get a job.” Most of them are already in work. Are you telling those five and six-year-olds—
Madam Deputy Speaker (Caroline Nokes)
Order. Not “you”—I have not spoken in this debate!
Antonia Bance
Thank you very much, Madam Deputy Speaker.
I say to those on the Opposition Benches who are telling people already in work to go out and get a job: what are those people supposed to do? Are they supposed to send their five-year-olds out on a paper round to make the money add up when it does not? Do not talk to me about how families should plan better—you will never meet a better planner than a single mum in Princes End making the money stretch. Do not cry crocodile tears for kids whose dad died but when his widow needed help, we said, “Nah. You shouldn’t have had so many kids.” Do not tell me that a dad who lost his job does not deserve help for his kids because he did not predict years in advance, when planning his family, that his factory would close and he would be dumped out of work. Be honest about what supporting the two-child limit means. If you support it, you think that some kids should be hungry tonight—well, we don’t.
I have no words for the idea of the charlatans of the Reform party, who would reimpose the two-child limit, plunge thousands of children into poverty and take hundreds of pounds from families each month in order to make it cheaper to have a pint. The hon. Member for Runcorn and Helsby (Sarah Pochin) was too frit to give way to me, so I will say this to her this now. Her policy would affect Sikh children living in my constituency who have a mum or dad born in the Punjab, or children in my constituency with a mum or dad who was born in Bangladesh, Poland or Pakistan. These are British people. They are our neighbours and our friends—people who work and play by the rules. They are British citizens, but they are second-class citizens for Reform.
I was glad to see that the right hon. Member for North West Hampshire (Kit Malthouse) called out Reform. I would like to see more calling out of that frankly disgusting point of view: the differentiation between different types of British citizen based on nationality and the colour of their skin that we see going on in our national political dialogue and in the Reform party. I hope that people across the country, in Scotland, in Wales and in my borough of Sandwell, will reject that division when the time comes in May—and that those in Gorton and Denton will do so as well.
I say this to my constituents who are working hard to make ends meet: I will not apologise for prioritising our kids. Every child deserves a fair start in life. As one of our greatest Prime Ministers said when launching his own child poverty mission:
“Poverty should not be a birthright. Being poor should not be a life sentence”.
We want every child to have the freedom to learn, to play sport, to sing, to dance and to get on in life, free from want and fear—the freedom to be kids. This is what a Labour Government will deliver: half a million of children out of poverty. I will be voting for the Bill tonight, and I hope other Members will too.
Sir Stephen Timms
No, I will not be giving way.
It was very interesting to hear the arguments of the hon. Member for Runcorn and Helsby (Sarah Pochin). Her party is looking more and more like a cut-price Boris Johnson reunion party, with all the old faces turning up on the Reform Benches. Now they are even starting to sing some of the old songs. The leader of their party has been talking for years about opposing the two-child limit, and just a few weeks ago, the right hon. and learned Member for Fareham and Waterlooville (Suella Braverman) wrote an article in which she said that she opposed it. Today they are voting with the Tories in favour of the cap. Those old policies would cause the same damage if they were brought in again in the future.
I remember a time when there seemed to be at least some degree of consensus in the House on the importance of tackling child poverty. Well, there was not much sign of that among Conservative Members this afternoon, and I am sorry that we have lost it. Scrapping the two-child limit on universal credit is the single most effective lever that we can pull to reduce the number of children growing up poor, and in pulling that lever we are helping hundreds of thousands of children to live better lives now, and to have real grounds for hope for their futures. We are supporting their families, the majority of whom are working families, and by enabling the next generation to fulfil its potential we are investing in our country’s success in the years to come.
The Bill is the key to delivering the biggest fall in child poverty in any Parliament on record, and in doing so it will make a very big contribution to the missions of this Government. Our manifesto was summed up in one word—“change”—and this is what change looks like: ambition for families, and for the country.
Question put, That the Bill be now read a Second time.
The House proceeded to a Division.
Madam Deputy Speaker (Caroline Nokes)
Will the Serjeant at Arms investigate the delay in the Aye Lobby?
Youth Unemployment
Caroline Nokes Excerpts(4 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Caroline Nokes)
I inform the House that Mr Speaker has selected the amendment tabled in the name of the Prime Minister.
Dame Diana Johnson
Those are very wise words from my hon. Friend.
I want to say something about employers, because they have a vital role to play in all this. On keeping people in work when they develop an illness or a disability, we are really pleased that we are working with over 100 Vanguard employers to take forward the recommendations in Sir Charlie Mayfield’s “Keep Britain Working” review, and helping to create a picture of what best practice looks like when it comes to building healthy and inclusive workplaces. We have had an outstanding response from businesses, because they know that when their workers win, they win too. Contrary to what some people say and believe, the interests of employees and employers are not diametrically opposed. Everybody wins when workers are secure, happy and healthy.
That leads me on to the Employment Rights Act 2025, which includes reforms such as the extension of statutory sick pay, so that more people can take the time they need to recover, instead of risking longer-term absences. That is not just good for workers; it is good for businesses, too.
I want to address the issue of national insurance contributions and business rates. Let us be clear: employers generally do not have to pay any employer national insurance contributions for employees under the age of 21 or for apprentices under 25. Yesterday we announced that every pub and live music venue will get 15% off its new business rates bill. That is on top of the support announced at the Budget. Bills will then be frozen, in real terms, for a further two years. This Government will always support businesses, giving them the stability that they need to grow, and to create good jobs.
Before I finish, there is one other thing I want to talk about. What happens at the start of people’s working lives can have many consequences for their future, and the same is true of what happens in our childhood. When a young person ends up out of work or training, it is no use pretending that that has suddenly come about in a bubble. Someone who grows up poor is less likely to do well at school and more likely to be a NEET. Poverty, low attainment and low aspiration can not only waste the potential of a young life, but cascade on to the next generation. Shockingly, the number of children in poverty increased by over 900,000 under the Conservatives, which is shameful, and they now come to this House to ask why a generation is struggling.
We are very proud to be lifting the two-child limit. That will have benefits for hundreds of thousands of children, who will be less likely to experience mental health issues, less likely to be unemployed, and more likely to be in work and earning more, yet the Conservatives oppose it. As ever, they seem determined to pull the rug out from under the next generation, and does that not sum them up? They blame; we support. They complain; we fix. They cut; we build.
We will never forget the neglect that left our young people without the hope and opportunity that every generation deserves, but this Government are doing things differently. We are laying the foundations for young people to succeed, and giving them the opportunities that they need and the skills and support to seize them. These opportunities are of course accompanied by obligations to take them up, but that is so much better than a life that is just written off. We are breaking down barriers to opportunity, so that every young person, in every part of our United Kingdom, can fulfil their potential.