Sovereign Grant Bill

Debate between Richard Fuller and Caroline Nokes

Committee of the whole House & 3rd reading
Monday 14th September 2026 Commons Chamber

[Madam Deputy Speaker (Caroline Nokes)]

I call the shadow Minister.

[Richard Fuller (North Bedfordshire) (Con)]

I thank the Minister for his clear exposition of the Bill’s clauses. He emphasised the importance of the 2026 royal trustees’ review. The interesting thing is that it is their forecast of their needs over the next five years on which a lot of the mechanism rests. Notwithstanding some comments made by Government Back Benchers, a lot of the intention of the Bill is about financial restrictions on expenditure, rather than there being excess expenditure in the future. I am grateful for the Minister’s letter to my hon. Friend the Member for Dumfries and Galloway (John Cooper); in his summing up, will the Minister give a bit more comfort and clarity on some of those matters?

If I am right, the £99.9 million is the estimate of what is required this year, based on a review of what the forecast requirements may be through to 2031-32. Will the Minister explain how those financial assessments were made? What discount rate was used to work out what the estimates might be? I am not questioning it, and I do not need a precise figure; what I am looking for is some comfort from the Minister that he feels that those financial projections, that model and the work of the trustees give him adequate confidence in the baseline of £99.9 million. That leads, in turn, to why we have 20.5% variability over the next five years.

In the Minister’s response to my hon. Friend the Member for Dumfries and Galloway, I was also interested to hear about the use of other income. In his letter, the Minister said:

“The Household forecasts that this income will increase by around 25% over the review period, based on recent performance, detailed modelling and increased visitor capacity… If income were lower than forecast, there is no expectation that the Grant would increase above £99.9 million per year.”

Can the Minister confirm that, essentially, the other income is being treated as supplementary to what we see as the duty of the sovereign grant? I would be grateful to the Minister for reconfirming what he put in his letter.

In clause 3, I am interested in proposed new section 6(5) to the Sovereign Grant Act 2011, stating that the reserve fund will be:

“no lower than 10% and no higher than 50%”.

What is of interest there is the duty to change the amount of the sovereign grant. There is an issue about to what extent that reserve, at 10% to 50%, is going to cover reasonable expectations of expense. That gets to the point that my hon. Friend the Member for Dumfries and Galloway made earlier about long-term plans. If significant capital expenditures are due, then the reserve, by its very nature, will be quite variable during the period. I would like some comfort from the Minister that the range of 10% to 50%—which sounds, on face value, to be reasonable—was correct in the modelling.

There is just one slight concern about the Treasury’s thinking on this. When my hon. Friend the Member for North West Norfolk (James Wild) asked about powers to adjust the grant between reviews and the circumstances in which they might be used, the answer from the Treasury was:

“These powers are intended for exceptional circumstances and are not expected to be used routinely”,

which, of course, is the definition of exceptional. However, the letter does then go on to talk about major fire, flood and so on, saying that in those circumstances,

“Any adjustment would require Parliamentary approval through secondary legislation.”

Could the Minister advise on whether or not that approval will be subject to the affirmative procedure? I think that other Members may want to raise that as well.

[The Second Deputy Chairman of Ways and Means (Caroline Nokes)]

I call the Liberal Democrat spokesperson.

National Insurance Contributions (Employer Pensions Contributions) Bill

Debate between Richard Fuller and Caroline Nokes

2nd reading
Wednesday 17th December 2025 Commons Chamber

[Richard Fuller (North Bedfordshire) (Con)]

For a Bill that proposes to raise taxation on working people by such a large amount, this has been a remarkably brief debate. But I commend my hon. Friend the Member for Solihull West and Shirley (Dr Shastri-Hurst), who correctly said that this was yet another anti-aspiration measure from this Government, and the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter), who made it clear that this was yet another example of Labour breaking its manifesto pledge not to raise taxes on working people. He also asked one of the key questions, which I hope the Minister will address in his reply: as this measure is due to come into force in three years’ time, what assessment have the Government made of behavioural changes, and can the Minister be assured that the amount in the OBR forecast is robust on a dynamic accounting basis?

This is the final economic Bill of the year to be voted on in the House of Commons, and it is another Bill that targets people who are trying to do the right thing. The Bill is a bad measure. It is an anti-savings measure and it is an attack on prudence, so of course the Conservative party will oppose it. This final Bill, at the end of this full-on year of Labour government, leaves me with one fundamental question: why do the Labour Government hate the private sector so much? If you are a family farmer, the Labour Government will snatch your farm away from your children when you die. If you believe in private education, the Labour Government will put up a barrier at the school gate. If you save for your retirement, Labour will tax your every effort to achieve security in retirement. Why do the Labour Government take every opportunity to punish people who are trying to do the right thing?

The Bill makes a mockery of the Government’s own Pensions Commission, set up in July this year, when it wrote:

“Put bluntly, private pension income for individuals retiring in 2050 could be 8% lower than those retiring in 2025—undermining a central measure of societal progress.”

Back in June, the Government recognised the problem of a secure retirement. Now, they are adding to the problem.

I have a question about the numbers. It is interesting that this measure is scored by the OBR in that crucial year of 2029-30 at £4.845 billion, falling the following year to £2.585 billion. That is an important year, because that is when the Chancellor says she has put in all this headroom—how interesting. Does the Minister agree with the director of Willis Towers Watson, one of the world’s biggest advisers on pensions, when he said:

“While earlier introduction would be unwelcome, the change appears to have been timed to maximise revenue in 2029/30—the year that counts for the Chancellor’s fiscal rule. £1.6 billion of revenue in that year is a temporary gain which will be returned to taxpayers who pay employee contributions instead and claim back part of their tax relief”?

On the £4.845 billion—the full amount—is any of that actually a fiction that will be returned the following year, as experts suggest it will be?

The Bill makes it less attractive for employers to contribute to private sector pensions. We all know that there is less certainty in the private sector, because that is where defined contribution schemes predominate, whereas in the public sector, greater certainty is given by a defined benefit scheme. In the public sector, there is also benefit because the contribution from the employer to employee pensions is much higher than in the private sector. In the public sector, employer contributions are equivalent to 27% of earnings, on average, according to research by the Taxpayers’ Alliance, but in the private sector the average contribution is only 8%. Why are the Government proposing to make it harder for private sector employers to contribute to the pensions of their employees? The Bill actively exacerbates the differences. By the way, it does nothing to tackle the unfunded £1.5 trillion liability of unfunded public sector pensions, which will fall on taxpayers.

The Bill is yet another example of the lack of private sector experience on the Government Front Bench. This Government are the least business aware Government in our country’s history. They are taxing and regulating growth out of our economy. Labour Ministers are punishing workers who want to save more for their retirement, and making it harder for their employers to help them to do so. While they can rely on their cushy, gold-plated public sector pensions, private sector workers are worse off.

[Madam Deputy Speaker (Caroline Nokes)]

Order. Before I call the Minister, I want to put on the record that the behaviour I have seen on both Front Benches this evening has been about the worst I have ever witnessed. The debate should take place across the Dispatch Box, not from a sedentary position. [Interruption.] No—not “He started it!” This is not a classroom.