National Insurance Contributions (Employer Pensions Contributions) Bill

Steve Darling Excerpts

2nd reading
Wednesday 17th December 2025 Commons Chamber

[Steve Darling (Torbay) (LD)]

What we see here is the tune remaining the same from the Budget, but perhaps the words changing a little. We see short-term gain for the taxman and long-term pain for the taxpayer, and particularly for those who wish to save for their pensions.

The Minister was right to highlight how we need to be driving more people to save for their pensions: in fact, we see about 12 million people falling short. Scottish Widows shared a report in the not-too-distant past showing that up to 40% of people are set not to have a comfortable retirement, and the figures have been going in reverse in the last couple of years. The Association of British Insurers highlighted that 40% of people would be less likely to invest in their pensions if these measures were taken forward, so there is a double whammy on those wishing to save. I ask the Government to reflect on the impacts that these measures will have.

The Federation of Small Businesses suggests that a number of small businesses use this mechanism as a way of enhancing their offer to employees in order to retain them. There is a suggestion that there will be higher national insurance costs for some of its members if and when the allowance is withdrawn.

One has to reflect on what businesses have had to suffer. The Ukraine war has led to higher energy bills, the national insurance hike that kicked in in April has put a cold hand around the heart of our businesses and, of course, business rates are set to go up significantly over the next few years. Our economy is in a parlous state. As Liberal Democrats, we really want to see a jump-start for our economy, and we have clear proposals—I will not go over them again for fear of getting in Madam Deputy Speaker’s bad books—for the way forward. We do not want to see our economy go into reverse gear, so we call on the Government to reflect again on these proposals.

National Insurance Contributions (Employer Pensions Contributions) Bill

Steve Darling Excerpts

Committee of the whole House
Wednesday 21st January 2026 Commons Chamber

[Torsten Bell]

I thank the hon. Member for Wyre Forest (Mark Garnier) for the reminder of the excellent debate we had before the Christmas break. I thank him and the hon. Member for Witney (Charlie Maynard) for their contributions. I will briefly reiterate the case for the three short and perfectly formed clauses of this Bill before focusing my remarks on the hon. Members’ amendments.

As hon. Members know, this reform was inevitable. We have had a detailed discussion of the last Government’s secret plan to implement a very similar proposal—the “secret plan” label came from the Conservative party, not Government Front Benchers—and the cost of pensions salary sacrifice was due to almost treble, from £2.8 billion in 2017 to £8 billion by 2030. That is the equivalent of the cost of the Royal Air Force. The status quo is also hard to defend when low earners and the 4.4 million self-employed people across the UK are entirely excluded, reinforcing the point made by my hon. Friend the Member for Harlow (Chris Vince).

[Steve Darling (Torbay) (LD)]

The Minister will recall our many happy hours together in Committee on the Pension Schemes Bill. One of the issues that the Liberal Democrats raised was the need for an MOT for people as they approach pension age, to see how their pension is going and test its adequacy. Does the Minister accept that putting these stark restrictions in place will significantly restrict the ability of somebody who realises that they are running out of time to make additional contributions to their pension to get to a better place? Would he consider extra flexibility, so that people could perhaps use 10-year allowances in three years?

[The Second Deputy Chairman]

Order. I remind Members that the scope of this Bill is very narrow indeed, and we really ought not to be bringing in new concepts.