National Insurance Contributions (Employer Pensions Contributions) Bill

Lord Londesborough Excerpts

Wednesday 25th March 2026 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I will speak briefly to this group of amendments in lieu. I am grateful to my noble friend Lady Neville-Rolfe for returning these issues to the House despite the very disappointing decision to cloak all our previous amendments in the financial privilege. Up and down the country, SME businesses are horrified by this. They have had a wall of difficult legislation sent their way, such as the national insurance increase and the Employment Rights Bill, so they have not focused on this, but those I talked to who have focused their mind on it are very unhappy to say the least with the possibility of this Bill affecting their business.

I want to focus on one particular issue. We have heard repeatedly in recent weeks of the position facing graduates repaying student loans, which is simply not fair. For those on plan 2 loans in particular, the picture is particularly stark: an anaemic jobs market, high rents, high living costs and, on top of that, what amounts to a 9% graduate tax with interest rates of around 6.2%, meaning that for many, full repayment is not possible. I urge the Minister and others to speak to their children or their grandchildren who will tell them that they are put off by this Bill.

This policy now risks making the matter worse. It threatens to increase the effective burden on graduates precisely when they are trying to do the right thing by saving for their retirement through salary sacrifice. They see the costs that are ahead of them when they retire. For many, particularly recent graduates, disposable income is already stretched to the limit with rents and the cost of living, so they have little scope to save beyond the auto-enrolment minimum, which, as we have heard, is insufficient to provide savings for their longer life. If the Government undermine the salary sacrifice regime, they risk entrenching a generation who simply cannot afford to save enough for their retirement.

In conclusion, that is why this amendment from my noble friend matters. It asks the Government to do what they should already have done: properly assess the impact of this policy in relation to student loans. I do not think anything the Minister said specifically addressed the issue of the impact on students. I did not see it in any of the Explanatory Notes or anywhere else. It may have been because they did not think it affected it or they did not realise it, but it has not been done. In the absence of that work, the least the Government can do is pause and consider the long-term consequences before pressing ahead. The Treasury now has the opportunity and the responsibility to get this right. I urge the Minister and all other Peers to do so.

[Lord Londesborough (CB)]

My Lords, I rise to throw my support behind the four Motions in the name of the noble Baroness, Lady Neville-Rolfe. I will be brief. Is the Government’s apparent resistance to the impact assessments proposed in these amendments in any way connected to the fact that the measures in this Bill will not take effect until 2029? The Secretary to the Treasury stated in the other place on Monday, while rejecting all of the Lords amendments, that,

“the status quo is indefensible”.—[Official Report, Commons, 23/3/26; col. 84.]

If that really is the Government’s view, why are we waiting three years to bring in the pension gap? But, since we do have this three-year gap, there is happily plenty of time for the Government to prepare economic and behavioural impact assessments, and it would surely make sense to do so.