National Insurance Contributions (Employer Pensions Contributions) Bill

Edward Morello Excerpts

2nd reading
Wednesday 17th December 2025 Commons Chamber

[Mark Garnier (Wyre Forest) (Con)]

I have to say that it is a joy to yet again be locking horns with the Pensions Minister on a topic that is important to us all: saving for our retirement. And it is important to note that there are many things that we agree on. We all acknowledge there is an impending issue with pension adequacy: when 50% of savers are projected to miss a retirement income target set by the 2005 Pensions Commission, we agree there is a problem that needs dealing with. We also all acknowledge that UK pension funds are not investing into the UK equity market to the extent that we would all want, although I would caveat that with a fundamental disagreement: on this side, we want to understand the problem; the Minister wants to tell fund managers what they should and should not be doing in terms of where their investment goes. But we also agree with the noble aim of delivering growth in the UK economy, even if the Government are making a little bit of a mess of delivering that aim— growth slowing, inflation up, unemployment up—but we hope they get the hang of it in due course.

But that is why the Chancellor’s Budget is disappointing. For pensioners, she has flown kites about the tax-free lump sum, frozen the personal allowance threshold, and forced millions of pensioners to start paying income tax. Those are her choices. For savers, she has reduced the cash ISA limit to £12,000, scrapped the lifetime ISA for new investors, and increased tax on dividends and savings by two percentage points. Those are her choices. For hard-working people, this Government have reduced real household disposable income, pulled millions more people into paying the higher rate of income tax, and created perverse incentives that make some better off on benefits. These are her choices. So it is no wonder that this Budget has been dubbed the smorgasbord of misery.

It has now got to the stage where our economy has never been taxed so much, and it will get worse. When coming into office, the tax take was 36.4% of GDP. By the time Labour leaves office in four years’ time, it will be 38.2%. It is worth looking at examples of how it is levied. For example, a basic rate taxpayer earning £100 will pay 20% tax, but they will also pay 12% national insurance—an actual tax rate of 32%. Add to that their employer’s contribution, and for a headline basic rate taxpayer on up to £50,000, for each £100 they earn, the taxman takes £47. For a higher rate taxpayer, the marginal rate goes to 57%. The taxman takes more than the employee.

Given the hit to payrolls, both at the employee and employer level, it is no wonder that saving into a pension through salary sacrifice has become popular. Even the Government think it is a brilliant idea, using it for 10% of government employees. It is no wonder, therefore, that people use incentives such as salary sacrifice to make the most of their money, to do the right thing, to save a little bit more, to take responsibility for their futures, and to not rely on the state in their retirement. It is no surprise then that 7.7 million people take advantage of that.

Here we are with something that is popular and that incentivises the right behaviour, and the Government say, “No, we don’t like it.” The Government’s proposal, which we are discussing today, is a tax on 3.3 million people and 290,000 employers—those in the highest levels of pay. How much are they being asked to contribute? How much are we going to whack savers? Some £4.48 billion. That is right—if you do the right thing, if you work and save, this Government will come after you. The Office for Budget Responsibility gets it. It realises—unlike, apparently, the Government—that this will change behaviour and so the tax take drops to £2.6 billion in the second year because people will change their behaviour. Even the Government lose out.

The Government’s contradictions are legion. The financial inclusion strategy, published recently, stated very clearly:

“Our aim is to create a culture in which everyone is supported to build a savings habit, building their financial resilience in the long term.”

A brilliant idea. [Interruption.] Thumbs up from the Pensions Minister! But even after that very clear message, the Government reduced the cash ISA limit, scrapped lifetime ISAs for new investors, and introduced a 2% increase to dividend tax and, the icing on the cake, a £4.8 billion tax on pension savers.

[Edward Morello (West Dorset) (LD)]

To the hon. Gentleman’s point about changing behaviour, we have already seen reports that two out of five people are less likely to save if the salary sacrifice scheme goes. We have already seen a reduction in contributions because of the cost of living crisis. Are we not just moving the pain somewhere else? Will we not end up with fewer people able to support themselves in old age and it will be back on the state again?

[Mark Garnier]

Absolutely. The Government are really keen to get people to save for their futures and then they do everything they can to try to stop them doing that. The hon. Gentleman is absolutely right. We are just going to kick another problem down the road. By the way, when the Minister talks about hip replacements and so on, it is savers’ money. It is just that they are taxing them less.

At the same time as the Government look to improve pensions adequacy, they will be taking £4.8 billion from savers and employers. They identify a problem, say they will work to make it better, and then make it worse. Surely, when they were writing the Budget—I know the Pensions Minister has been a significant penholder in that process—they must have seen the extraordinary contradictions in their proposals?

The House would expect me to bang on about this—I am the shadow Minister and that is my job—but let us listen to the verdict from a few experts about the policy we are debating today. Pensions UK stated:

“Any change to salary sacrifice would inject uncertainty into a system that needs long-term trust, not sudden shocks…Introducing a cap would weaken incentives to save when we are facing a generation retiring with inadequate retirement savings.”

The Institute of Chartered Accountants in England and Wales stated:

“This cap will make it more complex for employers to offer a simple and flexible solution for retirement savings.”

The Institute and Faculty of Actuaries stated:

“The decision to impose a £2,000 limit…will undermine current efforts to improve retirement outcomes for individuals. In doing so, the act of saving into a pension will now be more expensive, more complex and less attractive to both employees and employers.”

Evelyn Partners stated:

“Restricting this sensible tax benefit that makes private sector saving more attractive adds insult to injury in a two-tier pension system”.

PwC stated:

“In a bid to bolster the public purse…Budget risks reducing employees’ take-home pay while placing additional pressure on businesses through rising employment costs”.

Hargreaves Lansdown stated:

“Restricting salary sacrifice on pension contribution could cause long-term damage to people’s retirement prospects. We could see employees less likely to increase pension contributions beyond auto-enrolment minimums”.

The Society of Pension Professionals—it goes on and on. Are the Government proud of this rousing endorsement by the industry? It is absurd.

When I was quizzing the Minister about this last week at oral questions—he will remember it well—he proudly held up the report that was commissioned under the previous Government—

Pension Schemes Bill

Edward Morello Excerpts

Report stage
Wednesday 3rd December 2025 Commons Chamber

The amendment would provide a measured, proportionate and financially rational way to divest. It does not force an immediate blanket divestment from all fossil fuels. It allows for staged action following consultation, subject to parliamentary approval and grounded firmly in the fiduciary duty set out in the 2021 Act to secure effective governance of climate-related risks.

[Edward Morello (West Dorset) (LD)]

I thank my hon. Friend for speaking to this important new clause, which relates to the fundamental fact that pensions are about planning for the future, and climate change is about making sure that we have a future for all. Having pension funds supporting anything that undermines the outlook for future generations should be prevented in any which way we can. I just wanted to lend my support to her wonderful amendment.

Level 7 Apprenticeships

Edward Morello Excerpts

Tuesday 25th November 2025 Westminster Hall

[Sarah Gibson]

Absolutely. Right across the built environment, careers take a long time, and therefore we need to be supporting different types of people into those careers at a later age. If we want to meet housing targets, we need planners, architects and surveyors. Otherwise, we will not meet our net zero commitments and we will not be able to unlock the large-scale retrofit of existing homes that is needed and that, as we know from experience, requires technical support to get right. We cannot meet those ambitions while simultaneously shrinking the pipeline of qualified professionals across the built environment.

In addition, the Government’s proposal is prejudicial to those already in the system. Level 6 apprentices cannot access the same undergraduate student finance as their full-time counterparts. Although a full-time part 2 student may receive up to £46,000 in support, a level 7 apprentice progressing to part 2 would receive only £10,000. The very pathway that has enabled young people without family wealth to enter the architecture profession risks becoming a dead end.

The Architects Registration Board has been undertaking major reforms of the initial education and training of architects. It has stated that a key plank of those reforms has been to increase access to the profession for those taking non-traditional routes and, in particular, those from disadvantaged backgrounds or minority ethnic groups. The apprenticeship route in architecture is still in its infancy, but it is a very important part of the wider strategy that the Architects Registration Board is trying to achieve.

Architectural practices are overwhelmingly small and medium-sized enterprises. They rely on the growth and skills levy to train apprentices; without it, they simply cannot take them on. The engagement that the Architects Registration Board has had with trailblazers, employers and the Institute for Apprenticeships and Technical Education has led it to conclude that the removal of funding for level 7 apprenticeships could close off this route entirely. The benefit of being able to learn while you earn, in a profession that takes seven to 10 years to qualify for, cannot be stressed enough. Extending the date until which those over 21 can receive funding would help to reduce the cliff edge and would give universities, learners and employers time to adapt.

I therefore ask the Minister the following questions. What assessment has been made of the impact of restricting level 7 funding on the future diversity of the profession that requires this level as part of its final qualification? What impact will this restriction have on the ability of the profession to deliver the homes and infrastructure that the country desperately needs?

[Edward Morello (West Dorset) (LD)]

Like my hon. Friend’s constituency, West Dorset is rural and has no university, but we have a further education institution in the shape of Coastland college’s Kingston Maurward campus. We know the skills gap that is emerging in rural Britain and the need to give people an opportunity to progress. Level 7 apprenticeships provide the technical capability, but there are broader issues around welding, engineering, agriculture and the other services that are vital to delivering the home-building target. Does my hon. Friend agree that the Government must do more to support the further education institutions that are providing the workers of the future to help us to meet the targets she is talking about?

[Sarah Gibson]

I absolutely agree with my hon. Friend. I am a strong believer that apprenticeships are a way to make further education open to a wider group of people, particularly in rural areas.

Will the Minister consider raising the eligibility age to 25, extending transition arrangements and enabling level 7 apprentices to access full undergraduate student finance for the built environment professionals? Finally, if the Minister is unwilling or unable to do that, would he at least consider extending the current date for the funding withdrawal for those over 21, to minimise the disruption while new apprenticeship models are developed? Extending the date until which those over 21 can receive funding could at least help to reduce that cliff edge that the Government are preparing to shove the apprentices off, giving universities, learners and employers time to adapt to the new model.

These are modest, practical steps with widespread support from across the built environment sector. Without them, we risk losing the first real breakthrough, one that opens the door to the architectural profession for those from disadvantaged backgrounds, in the past 30 years.

Oral Answers to Questions

Edward Morello Excerpts

Monday 1st September 2025 Commons Chamber

[Torsten Bell]

I thank the hon. Member for his question, but would gently say that every time he opposes every single tax rise or any difficult choice in this House, he is saying that the Liberal Democrats are not a party that could deliver on commitments, for example, to the triple lock, which will increase in cost, as my right hon. Friend the Secretary of State mentioned earlier, by £31 billion by the end of this Parliament. There are things called “choices”, which are necessary if we are to provide for our top priorities—and for Labour Members, the top priorities, when it comes to pensioners, are making sure that we can increase the state pension, the bedrock of most pensioners’ living standards, and saving the NHS, and that is exactly what we will continue to do.

[Edward Morello (West Dorset) (LD)]

15. If she will make an assessment of the potential impact of increasing the number of remote personal independence payment assessments on claimants in West Dorset constituency.

[The Minister for Social Security and Disability (Sir Stephen Timms)]

We will increase the number of face-to-face, rather than remote, PIP assessments, and will increase the number of health professionals in assessment centres in order to deliver that. I think the hon. Gentleman will agree, however, that it is important to keep telephone or video alternatives for those who need them.

[Edward Morello]

Many West Dorset constituents have written to me with deep anxiety about the assessment for personal independence payments, and especially the use of remote assessments. One constituent, despite previously being awarded enhanced PIP, has endured months of repeated phone assessments, which have triggered severe panic attacks and high blood pressure, and caused lasting psychological harm. The Secretary of State has given me a commitment to moving away from phone-based assessments, so what additional resources will be made available to support the roll-out of more face-to-face assessments in West Dorset?

[Sir Stephen Timms]

There was a switch to remote assessments in the pandemic, for obvious reasons, but my right hon. Friend the Secretary of State has made the point repeatedly that, as was said in the “Pathways to Work” Green Paper, we want to move sharply back to face-to-face, while keeping alternatives for those who need them. I am sure the hon. Gentleman will have spoken to people for whom the prospect of going to an assessment centre provokes the kind of anxiety that his constituent experienced as a result of a telephone call. We are speaking to the assessment providers, and we have already increased the proportion of face-to-face assessments. That work will continue.

Credit Unions

Edward Morello Excerpts

Wednesday 16th July 2025 Westminster Hall

[Edward Morello (West Dorset) (LD)]

I congratulate the hon. Lady on securing this important debate. She has mentioned financial burdens a couple of times. The average credit union has fewer than seven employees, and is run nearly entirely by volunteers. Smaller credit unions are under the same dual regulatory burden as larger ones, and have to report to both the FCA and the Prudential Regulation Authority. Does she think that there should be proportionality, and that lighter regulation for smaller credit unions would give them the capacity to innovate?

[Katrina Murray]

I thank the hon. Gentleman for his helpful intervention. We need a joined-up approach to our support for the sector’s unique role. We must particularly support small credit unions with few staff members who are predominantly volunteers, because when it gets too much, volunteers may move away and services may close. We need regulatory reform, but we also need practical backing so that credit unions can modernise, merge where appropriate and scale sustainably.

I repeat my call to the Minister: please investigate the regulatory ambiguity that credit unions face, and particularly the application of the CONC by the Financial Ombudsman Service. I ask him to please consider measures to strengthen, not weaken, one of the most community-focused financial tools that we have. Let us not allow credit unions to wither on the vine. Let us invest in their future and, by doing so, in a more inclusive, more resilient economy for all.

Welfare Spending

Edward Morello Excerpts

Tuesday 15th July 2025 Commons Chamber

[Tom Hayes]

I will not be taking an intervention.

Is it any wonder that, as a consequence, we have people who are in significant difficulty, particularly when the social security and public services that they rely on have been chopped back?

As such, I welcome the launch of the child poverty taskforce as an early priority of this Government. I was pleased to meet the Minister just last week to talk about my priorities, which include trying to make sure that play is not squeezed out of childhood and that we have a social security system to meet the needs of children, particularly in the disadvantaged areas of my constituency.

[Edward Morello (West Dorset) (LD)]

I thank my hon. Friend and colleague from Dorset for giving way. He has talked about the issues outside his constituency of Bournemouth East, and he does not have to look far to see some of the inequalities that are in play—only to West Dorset. He will know from our beautiful part of the countryside that delivering services, including access to affordable healthcare, is even more difficult in rural Britain due to the sparsity of the population. That makes it even more important to support those most vulnerable members of our community.

[Tom Hayes]

I thank the hon. Member for his intervention. He invites me to champion his work. I do not think I will do that, but I will acknowledge his hard work and commitment, and I am pleased that he is a colleague.

The child poverty taskforce is going to be critical. The report that it will release, based on feedback from all Members of this House and all our civil society organisations, will be so important, so I am glad that we are taking the time to get this right. It will be a once-in-a-generation opportunity truly to tackle the root causes of child poverty. I am also pleased that, although we have launched that taskforce, this Government are cracking on with the hard work. Just this week, we have seen the announcement of the better futures fund—£500 million from this Government, to be matched by £500 million from local government and the private sector. In total, that is a £1 billion fund that will make a huge difference.

Similarly, I am pleased that we are providing free school meals for all children in families that are on universal credit—that will have a significant impact for my constituents. I am also pleased about the revamped Sure Start, which I think we should talk about more. A revamped Sure Start in all of our local authority areas, with the money that is being given to it, will be able to spot some of the hardships—the physical and mental health issues—that arise from poverty, and to tackle its root causes as well as its symptoms. It will give children a chance to grow, play, learn from each other and develop with peer support, and it will enable their parents, who have been starved of parenting support under the Conservatives, to learn from each other and get what they need. We have a long way to go in order to reverse the decline caused by the Conservatives and lift as many kids as possible out of poverty, but together across this House, I believe that we all have the solutions. I hope we can take this debate forward in the right way and lift those kids out of poverty.

Beer Duty

Edward Morello Excerpts

Tuesday 15th July 2025 Westminster Hall

[Mr Forster]

I agree. There is an economic argument for a small reduction in beer duty per pint, but, as she highlights, there are wider public community benefits as well. I have talked about trying to grow the economy and the fact that less tax per pint has better economic benefits. One of Labour’s key economic election promises was to grow the economy, so why are the Government ignoring calls from the industry to help deliver one of their key missions?

[Edward Morello (West Dorset) (LD)]

My hon. Friend will know—I have said this several times in this Chamber—that the overwhelming majority of businesses in West Dorset are microbusinesses, many of them in hospitality. Does he agree that EPR represents yet another attack on the hospitality sector, alongside increases in business rates and national insurance contributions?

Universal Credit and Personal Independence Payment Bill

Edward Morello Excerpts

Committee of the whole House & 3rd reading
Wednesday 9th July 2025 Commons Chamber

[Adam Dance (Yeovil) (LD)]

I wish to speak in favour of amendments 12, 13 and 17, and Liberal Democrat new clauses 2, 3, 6 and 7.

The Bill has been an absolute shambles from the start; there was no consultation with disabled people, and there has been last-minute chopping and changing. The Timms review and the removal of the PIP elements of the Bill are welcome, but the process that got us there has left disabled people in Yeovil fearful, and with little confidence in the Government. For example, my constituent Noel has unfortunately been unable to work due to a degenerative condition. He receives universal credit and has been left deeply distressed by the proposed changes; he visits my office almost daily for support. He is not alone. So many people in Yeovil have made it clear that the proposals are just unfair.

The whole point of the Bill, as far as I can tell, was to get people back into meaningful work and lower the welfare bill—things that I think we all want—but at no stage has the Bill done what is needed to help get people back into meaningful work: address the crisis in our NHS and social care system, and our growing chronic health issues. I have constituents who would have ended up homeless as a result of the original proposals, and now, without a full impact assessment, we do not really know what effect the Bill will have on our constituents. I am really concerned that people with Parkinson’s and conditions like MS will effectively be excluded, as a result of the criteria, from the higher rate of the health element of universal credit. At the very least, I urge colleagues to support amendment 17 to address that.

The original Bill was supposed to save around £5.5 billion, but the Institute for Fiscal Studies predicts that the amended version will deliver basically no savings over the next four years, as over that period, the forecast savings from reducing the universal credit health element for new claimants will be offset or exceeded by the cost of increasing the UC standard allowance. What is the actual point of this Bill?

[Edward Morello (West Dorset) (LD)]

My hon. Friend and neighbour’s constituency, like mine, is extremely rural; he will know that the cost of delivering services in rural areas is four to five times higher than it is in urban areas. PIP allows people to live independently. Both my hon. Friend and I see integrated care boards that are under extreme financial pressure. We will end up paying one way or another—we might as well give people the independence to live freely while we do it.

[Adam Dance]

I completely agree with my hon. Friend and neighbour. We will see a huge impact from ICBs having to make a 50% cut. We are already seeing the impact in Yeovil, as hon. Members will have heard me say. The maternity unit has had its funding cut, and is being shut for six months.

The Bill was not produced with disabled people; lots of its content is being removed; there is no impact assessment; and the Bill is not likely to make any real savings. This tells me that the Government should go back to the drawing board, and either withdraw the Bill, or adopt the Lib Dem amendments and new clauses that require proper consultation and impact assessments. Either way, the Government must stop making decisions about disabled people without them.

I thank some Labour Back Benchers for having a backbone and voting against their Government in support of disabled people. I hope they do so again today.

Oral Answers to Questions

Edward Morello Excerpts

Monday 23rd June 2025 Commons Chamber

[Liz Kendall]

Yes, I can. That is a firm commitment from me personally, and from the Prime Minister. We have made a start on that work: our expansion of free school meals to children in all households on universal credit will benefit, I think, around 6,500 children in my hon. Friend’s constituency, and we are helping more people into work, which is the best way to tackle poverty in the long term. We have a long way to go, but we are absolutely committed to bringing those numbers down.

[Edward Morello (West Dorset) (LD)]

T4. Some 40% of people in West Dorset who are in receipt of a personal independence payment receive the highest level of support. Many are extremely anxious about PIP assessments being carried out over the phone rather than in person, particularly those with complex or fluctuating conditions. Will the Minister guarantee that anyone who wants an in-person assessment will receive one?

[Liz Kendall]

Yes, we absolutely want that to happen. Indeed, we want to record the assessments as standard to ensure that claimants have confidence in what is being done. This is an issue that causes huge anxiety among my constituents. Too many decisions take too long and are overturned, and we want to deal with these problems head-on.

Disabled People in Poverty

Edward Morello Excerpts

Tuesday 17th June 2025 Westminster Hall

[Edward Morello (West Dorset) (LD)]

It is a pleasure to serve under your chairship, Ms Jardine. I congratulate the hon. Member for Poole (Neil Duncan-Jordan), my colleague from Dorset, on securing this important debate. I will attempt to edit my speech as I go along to buy back some time.

Ensuring fairness starts with recognising those who need support the most. The foundation of real support is ensuring that help reaches those who face the greatest challenges. The additional costs of disability—mobility aids, home adaptations, specialist care, heating and travel—add up and are all substantial. Scope estimates that disabled households need an extra £1,010 per month to achieve the same standard of living as a non-disabled household. Nearly 4,800 people in my constituency receive personal independence payments, of whom 40% receive the highest level of support.

[Adam Dance (Yeovil) (LD)]

One of the most common reasons why people claim PIP in Yeovil is poor mental health. Does my hon. Friend agree that to support vulnerable people’s mental wellbeing, the Government must urgently change course on the proposed cuts to PIP and introduce proper staff and accessible mental health hubs in every rural community?

[Edward Morello]

I absolutely agree. The costs for disabled people who live in rural areas include more expensive journeys to access healthcare, unreliable and sparse public transport, and higher energy bills for heating homes that are often older and less efficient.

Hundreds of my constituents have expressed their concerns to me over the last few months, and I have retold some of their stories in this Chamber. Each one represents a wider failure. The Government’s own analysis shows that the proposed changes to PIP will push 300,000 people into poverty. About 150,000 carers stand to lose carers allowance due to the knock-on effect of losing PIP eligibility, harming those who care for the most vulnerable. I urge the Government to change course.

[Several hon. Members rose—]