National Insurance Contributions (Employer Pensions Contributions) Bill

Dan Tomlinson Excerpts

2nd reading
Wednesday 17th December 2025 Commons Chamber

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

Thank you, Madam Deputy Speaker, for bringing the Front Benchers on both sides to heel at just the right time, before I make the closing remarks. It is a pleasure to close this Second Reading debate, and I thank all Members on both sides of the House for their contributions. I thank my hon. Friend the Member for Dartford (Jim Dickson) for his contribution and his brief foray—and it was brief—into broader points around the Budget, which I did appreciate. I will try to minimise doing so in my remarks.

The shadow Minister, the hon. Member for North Bedfordshire (Richard Fuller), raised a few points. While he is whispering over there, I will confirm to him that the costing provided by the OBR accounts for the dynamic effects of this policy. The costing itself has been certified by the OBR. The reason why the change does not come in for a number of years is because it will give businesses time to plan, which we think is an important thing to do when we are making significant changes to the pension system.

This is an important Bill, if small. This is an important debate to have, although it has felt somewhat rushed given that it has come after the many final-week statements and urgent questions today. But that has given me a bit more time to prepare some remarks, which I have hastily cut down from the 30 minutes I was planning; we will see whether we can make faster progress than that for the sake of all concerned.

In my extra time this afternoon, I thought I would attempt to shoehorn a Christmas theme into my closing remarks, given that this will be the last time the House divides before Christmas. Very briefly, I present “The Twelve Numbers of Christmas: the Salary Sacrifice Edition”. I start with 12 words from Baron Hammond of Runnymede on how some employees are, in his words,

“able to sacrifice salary…and pay much lower tax….That is unfair”.—[Official Report, 23 November 2016; Vol. 617, c. 907.]

The Whips can count, and I can see that they have counted that as 12 words—very good. It is clear that even 10 years ago the Conservative party was aware of issues with salary sacrifice schemes. They knew that we must ensure that significant tax reliefs totalling £75 billion a year are properly targeted. That is why we are capping pension salary sacrifice contributions at £2,000.

Let us be clear: we are not removing pension tax relief, just the ability for unlimited relief via salary sacrifice, which many people cannot access in any case. That brings me to my No. 11. Those earning £11, £12 or £13 an hour at the national minimum wage or the national living wage cannot make use of salary sacrifice schemes because if they sacrificed their salary, they would be paid less than the minimum. It is the richest who benefit the most from these schemes.

[Chris Vince (Harlow) (Lab/Co-op)]

rose—

[Dan Tomlinson]

I happily give way to my hon. Friend.

[Chris Vince]

It’s Christmas! I have been here the whole time, by the way, Madam Deputy Speaker.

The Minister talks about the impact on different earners. The Parliamentary Secretary to the Treasury mentioned that only one in five self-employed people actually gets a pension, and there was another statistic about low earners. Can the Minister reflect on that? We need to get more people signing up for a pension.

[Dan Tomlinson]

Some 4.4 million of the self-employed are also not able to save into salary sacrifice schemes; it is right that we make the scheme fairer for all.

Let me continue to run through my numbers. Some 10 million people have signed up to a pension since auto-enrolment, which has limited the need for salary sacrifice. There are more than 900 tax reliefs; this is one of a number that we are reducing to raise revenue fairly at this Budget. Without intervention, salary sacrifice would have cost £8 billion a year by the end of the decade. Instead, we will now raise £7 billion from this change over the course of the scorecard.

The change will affect those on higher earnings more: 60% of the contributions come from the top fifth of employees and just 5% of those earning less than £30,000 will be affected. We will give businesses time to plan—this is not coming in for a bit less than four calendar years.

[Richard Fuller]

Will the Minister give way?

--- Later in debate ---

[Dan Tomlinson]

We should make progress.

I step back for my final three numbers. Let me briefly set out how some of the long-term decisions the Government are taking are paying off. Figures today show that inflation has fallen to nearly 3%, with wages up more under this Government than in the first decade under the Conservatives. In the past two Budgets, the Government have made the right decisions for the good of the British people. We have focused on improving public services because we know that we were elected to put them right. We have focused on getting living standards up because we were elected to end decline. We have focused on making the right decisions for the long term because we were elected to put to bed the short-term chaos of years gone by.

To conclude, my final number is not a partridge in a pear tree but this fantastic country—my No. 1. We are all here to represent and improve this one great country of ours. It is a land full of hope and wonder, particularly at this time of year, with families and friends looking forward to seeing each other over the coming weeks, neighbours who look out for one another, communities who come together at Christmas—which we all want to get to in good time—and people who work hard and who want the state and the economy to work for them in return.

Although we disagree on much, I know that right hon. and hon. Members from across the House care deeply about this country of ours, and it deserves our best. Although the Bill is short and has only a few clauses, it is part of a bigger story about a Government who love this country and its people and want the best for it, a Government who are making the right decisions for the national interest, and a Government who are working every day to help everyday Brits get a fairer deal, in every way that we can. With that, I commend the Bill to the House.

Question put, That the Bill be now read a Second time.

Social Security Benefits

Dan Tomlinson Excerpts

Tuesday 4th February 2025 Commons Chamber

[Dr Evans]

I believe that under the Budget, the Government are not looking to review the position until 2028, so those on the state pension have to submit a tax return, because the state pension is being taxed.

[Dan Tomlinson (Chipping Barnet) (Lab)]

It was what you did.

[Dr Evans]

Agreed. That was brought in by a previous Government, and we in the Conservative party campaigned to remove it. Can the Minister confirm that the situation will remain in place until 2028?

--- Later in debate ---

[Danny Kruger (East Wiltshire) (Con)]

Let me state at the outset that the Opposition support the measures to uprate pensions in line with earnings and benefits in line with inflation. I am honoured, personally, to take part in this important annual ritual, which is never well attended but is always a high-quality debate. The traditional star of this debate is, of course, the right hon. Member for East Ham (Sir Stephen Timms), who this year has descended from the clouds of the Work and Pensions Committee to the sweaty arena of ministerial office. No one is more qualified than he to take the office that he now has. No one has more genuine expertise and compassion for the people that we all want to support than he, so I am very pleased that he is in this role. I just note in passing how much the House misses the expertise of departed Members. Paul Maynard, David Linden and Nigel Mills all used to take part in this debate to great value. I welcome my hon. Friend the Member for Hinckley and Bosworth (Dr Evans), who is taking up his position as a new star of this annual debate.

Despite the formality, it is an important debate, because it is an opportunity for us to take stock of the welfare and pensions system as a whole. As pensions and the triple lock were mentioned, I am happy to provide some clarification for the right hon. Gentleman. I think he has misunderstood, or our leader’s position has been misquoted, because we are not looking at cancelling the triple lock. It is his colleague, the new Pensions Minister, who has been very clearly quoted saying that the triple lock is a silly system and indefensible. I look forward to further clarification from Government Members.

[Dan Tomlinson]

As I understand it, the shadow Chancellor said that the triple lock is unsustainable. Do you agree with him on that point?

[Danny Kruger]

Clearly, there are questions about the long-term sustainability of our pensions system and our national insurance fund, but I think the shadow Chancellor was talking about the very long term, rather than the immediate situation that we are in. There is no intention, on the Conservative Benches anyway, to review the triple lock at this stage.

--- Later in debate ---

[Danny Kruger]

My hon. Friend is absolutely right. That was a key part of the reforms brought in towards the last part of the last decade, enabled by universal credit—a much simpler system. I am glad to say that we managed to reduce that taper significantly and to incentivise work.

[Dan Tomlinson]

Madam Deputy Speaker, I will try not to say “you” this time—I am sorry.

I would be genuinely interested to know what the Opposition’s position is on reform of the incapacity benefit system. It is a knotty problem. I know that when Opposition Members were in government, it was considered, but I am not clear what their position is at the moment. I know the Government are coming forward with proposals soon, so I would be genuinely interested to hear.

[Danny Kruger]

I am grateful for the opportunity. We had a whole series of plans that were sadly interrupted by the general election result, and I will come on in a moment to some of the suggestions I have for where the Government might go.

--- Later in debate ---

[Dan Tomlinson (Chipping Barnet) (Lab)]

First, I echo the comments of others in praising the Minister for his work on this issue over decades in this place. I saw it before becoming a Member of Parliament during my time working in the charity sector at the Resolution Foundation and most recently at the Joseph Rowntree Foundation. I was working on these issues, and I always knew then that we had a friend in Parliament who cared deeply about the welfare system and about the needs of people receiving benefits and support from the state, and who also, like me, wants to see more people being supported to move into employment. Even though I am not going to focus on that topic today as I want to talk about pensions, I do want to put on record my thanks for his service, and I am glad to see him as a Minister.

I want to start by talking about an institution that is not often discussed in this place but that is crucial to all of our lives and shapes a lot of politics even though we do not remark on it too much: the family. That is the institution that almost all of us are closest to and that shapes so much of the way we see the world. It is important that we as policymakers—as people sitting here in the House of Commons—do not just think of individuals as people on their own who are separate from one another and that we instead remember that we all exist in families. If we look at someone’s biography online, it might say they are a father and a husband, because our families are a big part of our identities. We would do well to remember that.

Sometimes our politics and our media might want to push us into discussing pensions in a way that promotes the salience of a war between the generations, but nothing could be further from the truth.

[Mr Dillon]

The hon. Gentleman talks about the importance of family and I could not agree more, but does he also agree that a family is a unit designed by that family and an arbitrary limit of a two-child benefit cap does nothing to protect that family unit if they have more than two children?

[Dan Tomlinson]

I grew up in poverty. We had no money and lived in social housing. I had free school meals throughout my childhood, and the three of us were in emergency and temporary accommodation as well. And I know the benefit system was there for my mum and for us, and I have confidence that this Government will make the decisions that we need to make to ensure that our welfare system is there for families like the one I grew up in. I know a review is looking at universal credit and the welfare system, and I look forward to it reporting in the months ahead. This is a really important issue, and I thank the hon. Gentleman for raising it.

On families and the state pension, often people want to pit the young and the old against one another, but the evidence shows that young people are one of the most supportive groups for the increase in state pension. That is in part because we—I still call myself young now, in my early 30s—know and have seen throughout our lives how much people who are retired, such as our grandparents or older people we know in the community, have contributed to our lives and our families and also the lives of our communities. Also, to put on my economist’s hat, increases in the state pension and support for the triple lock, which we on this side of the House steadfastly support, will benefit young people the most because an extra few pence on the state pension today means an extra few pounds—or tens of pounds or, depending on which generation we are talking about, hundreds of pounds—in the future because of the way these things compound over time. It is really important we continue to support the state pension and the triple lock.

[Bobby Dean (Carshalton and Wallington) (LD)]

The hon. Gentleman makes an excellent point about the long-term benefits to the economy from treating the benefits system seriously. Does he agree that that applies to the two-child cap as well because if we were to remove that not only would we lift hundreds of thousands of children out of poverty, which is inherently a good thing, but we would also improve health and education outcomes and ultimately make a more productive population over the long run?

[Dan Tomlinson]

I thank the hon. Gentleman for his intervention on the same important topic raised by the hon. Member for Newbury (Mr Dillon). I know that the Government are looking at this issue and at how we can reform the welfare system to support people to get the money they need and have the incentives and the right approach to welfare to help more people get into employment. That is the long-term sustainable route to reducing poverty and I hope we can do more to achieve it.

[Dr Luke Evans]

rose—

[Dan Tomlinson]

I am happy to give way, although I perhaps should make some progress.

[Dr Luke Evans]

The hon. Member makes a fantastic point about the family unit. The last Government were looking at introducing a measure on household income, particularly with child benefit, to try to make sure that we see people not as individuals, but as a group. That could stop such things as the child benefit cliff edge. However, the new Government took that measure away in the Budget. Would he make the argument to his Front Benchers that looking at household units—the family unit—is a positive way of seeing how we can support people?

[Dan Tomlinson]

That is important in some respects. One of the challenges with the policy that the hon. Member identifies is that we tax people on an individual basis and the benefits he refers to are often linked to the tax system. He raises an important point, and I am sure it is being considered.

I will make some progress and conclude my remarks. I am supportive of the increase in the state pension and of the triple lock. I know we have already had a little ding-dong about it, but it is the case that the shadow Chancellor, the right hon. Member for Central Devon (Mel Stride) said that the triple lock was unsustainable. Perhaps he was referring to the long term, but that still concerns me, not least given what I have said about young people benefiting most from increases in the state pension over time.

I am glad that in April the 20,000 pensioners in my constituency will receive either a £470 uplift if they are on the new state pension or, I believe, a £360 uplift if they are on the basic rate of state pension. That is incredibly important for living standards. I spent many years living with my grandparents part-time. They taught me a lot, and many of my values have come from them. We know how much care older people can provide to family and to their communities, and I see that in Chipping Barnet. At almost every community event, whether that is a local church, an institution or a charity doing good in the community, there are so many retired people giving their time and care, making Barnet—my corner of north London that I have the pleasure of representing—a better place to live. Providing that security in retirement is so very important.

Welfare Cap

Dan Tomlinson Excerpts

Wednesday 29th January 2025 Commons Chamber

[Dan Tomlinson (Chipping Barnet) (Lab)]

I thank the Secretary of State for all the work on these important issues. I am aware that we are close to the end of the debate, so I will raise just one issue.

A small business owner in my constituency of Chipping Barnet in north London told me about the way the jobcentre failed to support people into work when the previous Government were in charge. It is encouraging to see what is coming forward in the White Paper, but the small business owner, whose name is Simon, told me how he had advertised some jobs in his company. He and his team spent seven hours going through lots of issues with 80 applicants, all of whom were referred by the jobcentre but none of whom had any desire to take up the job. They were applying because they were being forced to do so by the work coaches in the jobcentres in those 10-minute appointments.

I am happy that the Government have set out proposals in the White Paper—there will be more to come soon in the Green Paper—to help people who want to work to find jobs that are right for them, and to help employers to get good matches to improve productivity and growth in this country.