Torsten Bell MP: speeches 2025

Speeches

• 17 Dec 2025 · National Insurance Contributions (Employer Pensions Contributions) Bill · Hansard source

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  I am reluctant to intervene, but I just want to pick up on two points that the hon. Member has just made. Men are much more likely to use salary sacrifice than women, so I offer him the chance to reconsider his last point about women being disproportionately affected. Before that, he said that the Bill meant that people were being encouraged to save but that they would be penalised if they did so. Given that there are members of the public listening who will make choices about their savings, I invite him to remind everyone that saving into their pension is still a very tax-advantaged thing to do. All Members on both sides of the House should encourage people to save into their pension, as the tax system will continue to do.

• 17 Dec 2025 · National Insurance Contributions (Employer Pensions Contributions) Bill · Hansard source

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  I will come to the exact point that the hon. Gentleman raises. The main answer to his question is that we are introducing this change with a very long implementation period—it will not come in until 2029—in order to give businesses and others time to adjust. Businesses have welcomed that across the board, but I will come on to it shortly. It is always important to keep the effectiveness and value for money of tax reliefs under review; after all, their cost is estimated to be over £500 billion a year. That is always true, but it is especially true when we see the cost explode. That is why we acted in the Budget to reform employee ownership trust capital gains tax relief, because the cost was set to reach more than 20 times what was intended at its introduction. That is what we see happening in the case of pension salary sacrifice: its cost is on course to almost treble between 2017 and the end of this decade. That would take it to £8 billion a year. For some context, that is the equivalent of the cost of the Royal Air Force. I will repeat that: the cost of pension salary sacrifice was due to rise to the equivalent of our spending, in real terms, on the Royal Air Force. The growth has been fastest among higher earners, with additional rate payers tripling their pension salary sacrifice contributions since 2017. While those on higher salaries are most likely to take part, many others are unable to do so at all.

• 17 Dec 2025 · National Insurance Contributions (Employer Pensions Contributions) Bill · Hansard source

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  Your report!

• 17 Dec 2025 · National Insurance Contributions (Employer Pensions Contributions) Bill · Hansard source

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  I think I have already answered the right hon. Member’s question: it is important to keep tax reliefs under review. The cost of pension salary sacrifice is growing very fast indeed, so we have reviewed this tax relief and think it is important to bring in pragmatic changes, as I will come on to. As I was saying, I am confidently looking forward—

• 17 Dec 2025 · National Insurance Contributions (Employer Pensions Contributions) Bill · Hansard source

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  I thank the hon. Gentleman, as I always do, because he always makes interesting points, but my larger point is this: if the Conservative party refuses ever to support any increases in taxation, increases in such spending—I think there is cross-party support for the Ministry of Defence, as the right hon. Member for South West Wiltshire mentioned—cannot be funded and cannot happen. Almost every tax expert in the country has noted the need for change, and most have called for pension salary sacrifice to be ended entirely. However, we are taking a more pragmatic approach by recognising that change will affect many employers and employees. Our balanced approach has two key parts. The first is time. As I said to the hon. Member for Strangford, nothing will change overnight. We are providing over three years’ notice of the reform’s implementation. What did the previous Government provide to employers? One year’s notice of their reforms to salary sacrifice. This will give everybody involved time to prepare and adjust, which is widely welcomed by firms and business groups. Employers and payroll providers have already been working with His Majesty’s Revenue and Customs to ensure that this change operates in the most effective way, and that process will continue as we approach implementation. The second key design choice is the cap of £2,000. This cap protects ordinary workers and limits the impact on employers, while ensuring that the system remains fiscally sustainable. The cap means that the majority of those currently using salary sacrifice will be unaffected. It means that almost all—95%—of those earning £30,000 or less, who work disproportionately for small businesses, will be entirely unaffected, and 87% of affected salary sacrifice contributions above the cap are forecast to be made by higher and additional rate taxpayers. This is a pragmatic and fair approach, as well as the fiscally responsible one. Some will claim—I am sure we will hear this from the Opposition—that salary sacrifice arrangements drive aggregate levels of pension savings. That is simply wrong. After all, salary sacrifice arrangements existed through the 2000s and into the early 2010s, and what happened to pension savings during that period? There were not rises, but big falls in private sector participation in pension savings. The existence of salary sacrifice did nothing to prevent a situation in which, by 2012, only one in three private sector workers were saving into a pension. What made the difference was not the complicated national insurance reliefs available to some employees, but automatic enrolment, the groundwork for which was laid under the last Labour Government and which was continued by Conservative and Liberal Democrat Ministers. That reversed the collapse in workplace pension saving, and it means that over 22 million workers are now saving each month. We also see that contributions have risen in line with regulatory requirements, not with the growth of salary sacrifice. Pension salary sacrifice relief doubled between 2019 and 2023. Was that associated with a surge in average pension contribution levels? No, they have remained entirely stable as a proportion of pay, because all the evidence indicates that it is largely automatic enrolment that drives changes in pension savings. That should not surprise anybody, because the research commissioned by the Conservative party that I mentioned earlier pointed in the same direction. It found that the majority of employers reducing their tax bill by offering pension salary sacrifice did not use the savings to increase pension contributions. More importantly for any member of the public listening—and it is important for all of us to be clear about this throughout this debate—pension saving will remain highly tax-advantaged after these changes. I have seen some deeply misleading comments in the media and otherwise on wider changes to pension tax relief, saying that people will not be saving as much as they previously were. The public should be clear that we are spending over £70 billion per year on pension tax relief, and that will be entirely unaffected by these changes. Employer contributions will continue to be the most tax-advantaged part of the pension tax system, being made entirely national insurance contribution-free. These are necessary changes that everyone who has thought about this subject knew would be needed, and they are changes being implemented in a pragmatic and balanced way. They are also consistent with the longer-term approach to reforming the pension system that is now in train. There is cross-party agreement that the work of the Pensions Commission is important as it examines questions of adequacy and fairness. We all know too many people are under-saving. Many commentators have called for higher minimum saving rates within automatic enrolment, including some on the Opposition Front Bench. The commission is crunching the numbers and talking to employers, trade unions and the pensions industry. We should not prejudge its work so I would now simply note that higher savings rates means pension tax relief costs rising further. If we combine that with the reality that if pension salary sacrifice remains unreformed, the end point could be all employee contributions being funnelled through this route, it implies costs at least doubling again to well over £15 billion a year, which means £15 billion in higher taxes elsewhere or cuts to public services. That is the logical conclusion of the arguments from those opposing today’s Bill. Then we come to the real problem of some groups disproportionately under-saving, which, again, Members on both sides of this House have rightly raised in debates on pensions in recent months. The Pensions Commission is focused on groups we know are most exposed, including low earners, some ethnic minorities, women and the self-employed. This is a real challenge for our pension system but the data is entirely clear that today’s salary sacrifice is not the answer. That is true whichever group we look at. Let us take them in turn. The self-employed are a top concern, with only one in five saving into a pension, but they are entirely excluded from pension salary sacrifice. Low earners are most likely not to be saving, but it is higher earners who are most likely to be using salary sacrifice. And many more women are under-saving for retirement, but many more men use pension salary sacrifice. These are fair and balanced reforms. They protect ordinary workers, they give employers many years to prepare, and they ensure both our pension system and the public finances are kept on a sustainable footing. Opposing them is not cost-free: the savings from this measure are equivalent to over 250,000 knee and hip operations every year. The truth is that they are inevitable, which is why at least one party opposite was planning to introduce them. I gently suggest to some Members that they can, of course, take the easy route of opposing this change, but the truth is that they will be doing so with their fingers crossed behind their backs, because many know this change needed to come one day, and I suspect not one of the parties opposite will promise to undo it in the years ahead—but we will see. The Budget delivered badly needed tax reforms ducked for too long by previous Chancellors. Whether it is the pragmatic reform in front of us today or ensuring that everyone driving on the roads contributes to their upkeep, these reforms are what it takes to keep cutting waiting lists, cutting borrowing and cutting energy bills, and I commend them and this Bill to the House.

• 17 Dec 2025 · National Insurance Contributions (Employer Pensions Contributions) Bill · Hansard source

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  I will make some progress before giving way again. The majority of employers do not offer salary sacrifice at all, including many small businesses. Workers on the national living wage are excluded entirely, and so are the 4.4 million self-employed people across the UK. On grounds of cost and fairness, it is near impossible to defend the status quo. Of course, a major part of the job of the Opposition is to oppose some things that the Government are doing. I do not want to prejudge the remarks that the shadow Minister, the hon. Member for Wyre Forest (Mark Garnier), will offer shortly, but I am confident that we will hear some opposition—maybe a word or two—to the Bill.

• 17 Dec 2025 · National Insurance Contributions (Employer Pensions Contributions) Bill · Hansard source

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  I will come on to some statistics that might answer my hon. Friend’s question. While those on the highest salaries are most likely to take part in salary sacrifice, others are completely excluded. This goes to the question from the hon. Member for Strangford (Jim Shannon).

• 17 Dec 2025 · National Insurance Contributions (Employer Pensions Contributions) Bill · Hansard source

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  I am going to make a bit of progress, and then I will give way to the hon. Member. The truth is that reform was inevitable. Although Conservative Members are not saying it now, they know this is true, because it is what they said in government. In the 2015 summer Budget, they said: “Salary sacrifice arrangements…are becoming increasingly popular and the cost to the taxpayer is rising”— [ Interruption. ] I will come on to what the last Government wanted to do in the pensions space in a second. I am glad that the hon. Member for North Bedfordshire (Richard Fuller) is so keen to hear this; he is setting me up nicely for what is coming in a second. The summer Budget of 2015 went on to say: “The government will actively monitor the growth of these schemes and their effect on tax receipts”, which is the same argument that I just made to the right hon. Member for South West Wiltshire (Dr Murrison). That monitoring led, a year later, to the then Chancellor—now Baron Hammond of Runnymede—announcing benefit-in-kind restrictions. He told this House: “The majority of employees pay tax on a cash salary, but some are able to sacrifice salary…and pay much lower tax… That is unfair”. —[ Official Report , 23 November 2016; Vol. 617, c. 907.] He was right then, and the same argument holds today. Former Conservative Ministers should certainly agree, because in government they were planning exactly the kind of change to pensions that we are now introducing. By way of proof, in 2023 the Conservatives commissioned research on restricting salary sacrifice arrangements for pensions, which is exactly the same measure they are opposing today. What was the proposed cap on pension salary sacrifice in that report? It was £2,000 a year, which is exactly the same cap they are opposing today.

• 17 Dec 2025 · National Insurance Contributions (Employer Pensions Contributions) Bill · Hansard source

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  I beg to move, That the Bill be now read a Second time. This is a short and simple Bill. It is a stocking filler to yesterday’s Finance Bill. [Interruption.] There are just three clauses for the chuntering Opposition Members to enjoy. They focus on amending the Social Security Contributions and Benefits Act 1992, and they do so to create a power to apply national insurance contributions to salary sacrifice pension contributions above £2,000 a year from April 2029. I will focus my remarks on three areas: first, why Government action in this regard was inevitable; secondly, the case for the pragmatic, balanced approach that we propose to take; and thirdly, how this sits with wider, crucial questions about pension savings on which the House rightly focuses.

• 16 Dec 2025 · Budget 2025: Impact on Graduates · Hansard source

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  It is always a pleasure to serve under you in the Chair, Mr Turner. I congratulate the hon. Member for Windsor (Jack Rankin) on securing this important debate. Budget discussions, which there have been lots of in the past month, tend to focus on economic statistics, GDP and borrowing. Those are very important, but they can sound abstract. What ultimately matters is what happens to people, including young people, and their wages and bills, the firms they work for and the public services they rely on. I welcome the hon. Member’s focus on young people and what is happening to their wages, homes and student finance, as well as apprenticeships actually, which he did not touch on much. I also welcome his honesty about a number of the trends and policies put in place by the previous Government. I would add to his critique of the previous Government the 40% fall in youth apprenticeship numbers, which has had a real effect on the volume of routes available to young people. Across all the fronts that he mentioned, the Government are supporting graduates and, for that matter, non-graduates. I know he would agree that the most important thing we can do for them is to make sure our economy overall is strong, because in the end, that is what provides graduate opportunities. He will be aware that Britain outperformed the growth forecast this year, with growth upgraded from 1% to 1.5%. Lots of things in the long run matter to economic growth, but raising Britain’s investment levels is high up the list. That is why public investment is up by £120 billion and why we place so much emphasis on the old-fashioned idea of actually getting things built in this country. He raised the issue of housing, which I will return to shortly. We have also seen real wages rise more in the first year of this Government than in the first 10 years of the Conservative Government, but there is a lot further to go, and the Budget does go further. Let me touch on some of the areas that the hon. Member mentioned. On the microeconomic policy side, Britain is already the best place to start a business in Europe. That can be seen clearly in all the statistics, but it needs to be the best place to scale up a business and for a business to stay. That is exactly what we dealt with in the Budget, with tax breaks to make it easier to grow and keep attracting capital and workers. In the long run, that is what creates more graduate jobs, which he rightly focused on. On the macroeconomic strategy, we aim to support growth by cutting borrowing and inflation. That in turn helps the Bank of England to keep interest rates falling—they have already been cut five times since the election—and that is crucial to give businesses the confidence to invest and to directly cut mortgage bills for millions of Henrys, Henriettas and everybody else, because those with mortgages are disproportionately graduates. The hon. Member rightly raised the question of assets. He touched on housing but in my day job dealing with pensions, the same thing applies, because the young people he referenced will also be saving for pensions in a very different environment from those who came before them. Briefly on housing, what are the Government doing? We aim to tackle two things: first, the security of rental accommodation through the Renters’ Rights Act 2025, making sure that if people are renting, whether that is for a temporary period or an extended period, they cannot be evicted at short notice, with no certainty. Secondly, we have to tackle housing costs, and in the long run that means building houses. There is no substitute for that. It means building affordable housing and market housing. The hon. Member mentioned London, where a package of measures has been announced to deal with the building trend over the last few years towards lower building levels than we would like, but we also need to see this around the country. We need to see all enthusiastic MPs not opposing planning permissions when that is their easiest path to take. On pensions, I will add two things that I think matter for today’s younger generations. The first is the adequacy of the system that they are saving into, largely via defined contribution pension schemes. We have launched the Pensions Commission—I think that has cross-party consensus—to make sure, when we look ahead to 2050, that young people are on course for an adequate retirement. But we also need to address the fact that it is not just the amount of the pension, but the level of risk that younger generations are being asked to bear—in longevity, investment, inflation and other risks. That is exactly what the Pensions Commission is doing. I agree with most of the comments about young people in the labour market. It is a disgrace that one in eight young people are not in education, employment or training—I think we would all agree about that. Of course, it is a disgrace that we inherited from the Conservatives, as the hon. Member for Windsor is well aware. It is good that the number of NEETs has not continued to rise, but I absolutely agree that it is far too high, and that is on all of us. That is why we have committed to tackling it, not least through a youth guarantee. That needs to continue, as does the work on mental ill health. We have committed to expanding the use of talking therapies in the NHS, delivering an additional 384,000 courses of treatment by 2028-29. There is one thing that I would gently add, in thinking about some of these issues, and mental health is a good example. We must not forget that the long-lasting effects of mental ill health, for example in the labour market, tend to be felt among those with fewer qualifications, even though, on the health side, that affects a very wide range of people. Turning to tax, we are certainly not hiding from the fact that the Budget asked everybody to make a contribution. The reason for that is simple: people have had enough of failing public services that are not doing the basics, and they know that borrowing levels must be brought down. The hon. Member will know that the Budget reduces borrowing in every single year of the forecast, because spending £1 in every £10 on debt interest rather than on schools and hospitals is already quite enough. The Budget included the freeze on the repayment threshold for plan 2 student loans from April ’27—where the threshold remains above that for other student loans, such as the plan 5 loans. The hon. Member mentioned some details of the plan 2 rules, which, again—I gently say—were introduced by the Conservatives, who looked to rebalance the system away from having as much taxpayer funding of students in the university system as there had been, with the cost being passed on to individuals. The measures are part of a wider package of reforms, including in relation to higher-value properties, electric vehicles and changes to income tax rates on income from assets. Those are part of the Budget so that we make sure that the wider contributions we are asking for from everybody can be kept to an absolute minimum. More broadly, there has been a cross-party consensus that a fairer system of university funding will require a lower net contribution to universities from the taxpayer, particularly from taxpayers who did not go to university—I think that the hon. Member still agrees with that. In 2025, 34% of loan debt for full-time plan 2 graduates was forecast not to be repaid, so what we are talking about is still substantive. I agree with him more broadly on the need for other higher-quality qualifications in greater numbers; he will have heard the Prime Minister referring to that in his conference speech earlier this autumn. We must also not lose sight of something that is still very true, despite the call for more and a wider range of qualifications: graduates still genuinely benefit from higher earnings and higher employment rates. We have talked about NEET numbers, and a degree still provides a very high level of protection against that. That does not mean that we should not continue to focus on ensuring that we get the best value for money for everything that young people go on to do. It is important that we have a sustainable student finance system, and also one that is fair to students and to the taxpayer. Students will pay nothing back unless they earn above the threshold, as they do now, and no one whose salary remains the same will see their monthly repayments change as the years of the freeze continue. Of course, we will keep the system under review. I again thank the hon. Member for securing the debate. It is vital that we secure the best possible future for graduates and, I think we all agree, for all young people and the younger generations. We will do that by tackling inflation and making sure that we bring down debt, as well as by ensuring that this is a country where wages and living standards are rising, where people can get things built again and where firms are able to grow. The Budget goes about delivering exactly that. Question put and agreed to.

• 9 Dec 2025 · Budget: Work Incentives · Hansard source

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  The forecasts accompanying the Budget set out that the Office for Budget Responsibility expects employment levels to rise in every year of this Parliament. They also set out that employment is forecast to be higher in every year than previously expected back in March.

• 9 Dec 2025 · Budget: Work Incentives · Hansard source

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  The hon. Member is right to call those things a moral and economic disgrace. Does he know who created them? It was the Conservative party opposite. Who saw a 50% rise in the number of those not in education, employment or training? The party opposite. Who created the benefits system that is failing today? The party opposite. Who failed to reform the benefits system? The party opposite.

• 9 Dec 2025 · Topical Questions · Hansard source

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  My hon. Friend has been a powerful campaigner for those surpluses to be shared with the members of those pension schemes. He knows that we made an announcement at the Budget to ensure that the British Coal staff superannuation scheme surplus is shared with its members, and I know that the trustees are bringing forward their proposals on the sharing of future surpluses.

• 9 Dec 2025 · Topical Questions · Hansard source

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  We have all watched the hon. Member voting with his feet by leaving the bunch of crazies that he was with before. Let us get back to what this Government are doing to drive growth: we are increasing public investment by £120 billion over this Parliament and making sure that things get built. We are building housing and giving a default “yes” to developments around train stations. We are building transport infrastructure, including the lower Thames crossing and expansion at Heathrow and Gatwick airports. We are expanding energy infrastructure at Wylfa and Sizewell. This Government are backing the builders, month after month.

• 9 Dec 2025 · Topical Questions · Hansard source

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  Energy bills are too high. The Conservatives left Britain dependent on the rollercoaster of gas prices, and left families paying almost £2 billion on bills for their failed energy efficiency scheme, the energy company obligation. We are scrapping ECO and taking some of the expensive levies off bills. My hon. Friend makes an important point about standing charges. He will know that Ofgem continues to consider low standing charge tariffs for exactly the reason that he raises. More generally, reducing energy bills is so important precisely because they are typically a higher share of disposable income for low-income households.

• 9 Dec 2025 · Topical Questions · Hansard source

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  The welfare state that the Conservative party created is failing, and we are changing it. Welfare spending rose three times as fast under the Conservative Government than it has under this one, because they created a broken welfare system, and I repeat: we will change it.

• 8 Dec 2025 · Topical Questions · Hansard source

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  As the Secretary of State set out to the House a few months ago, the decision to which the hon. Member refers is being retaken by the Department, and we have committed to updating the House on that decision in due course.

• 8 Dec 2025 · Topical Questions · Hansard source

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  There is nothing sad about Labour Members watching wages rise faster under this Government than they did under the Conservatives. There is nothing sad about our Back Benchers seeing the end of austerity and seeing public services being improved right across this country.

• 8 Dec 2025 · Topical Questions · Hansard source

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  I thank the hon. Gentleman for his brief question. Pensioner poverty halved under the last Labour Government. It went up under the previous Conservative Government, but it is going to come down again under this Government.

• 8 Dec 2025 · Topical Questions · Hansard source

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  We are taking a pragmatic approach to reforming pension contributions made via salary sacrifice, the costs of which are set nearly to triple to £8 billion between 2017 and the end of this decade. The case for change was made powerfully by a previous Chancellor: “The majority of employees pay tax on a cash salary, but some are able to sacrifice salary…and pay much lower tax… That is unfair”. —[ Official Report , 23 November 2016; Vol. 617, c. 907.] So said Baron Hammond of Runnymede.

• 8 Dec 2025 · Topical Questions · Hansard source

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  I thank my hon. Friend for her important question. We have seen poverty rates fall less fast among people approaching the state pension age, rather than those over it. We need to look across the range of policy levers to address that, which includes growing the economy so that wages are rising and building houses so that people’s housing costs come down.

• 8 Dec 2025 · Topical Questions · Hansard source

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  The hon. Gentleman is a powerful champion for his constituents and I am sure that all hon. Members will be unhappy to hear about this case. I know that staff from the Department for Work and Pensions have already been in touch with his office, and I am happy to follow up myself.

• 8 Dec 2025 · Topical Questions · Hansard source

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  I thank the hon. Gentleman for his question because it gives me a chance to bring the House’s attention to research published after the general election in 2024 but commissioned under the last Conservative Government—I have the document here. What was the research into? It was into capping salary sacrifice pension contributions at £2,000. The hon. Gentleman can read the research published and commissioned by his own party about putting back under control this tax relief, which had got out of hand.

• 8 Dec 2025 · Pensioner Poverty · Hansard source

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  I thank my hon. Friend for that important question. I, like her, have met and listened to lots of those affected by the lack of indexation on pre-1997 accruals within the PPF and the FAS. I can assure her that, assuming the Pension Schemes Bill receives Royal Assent, the uprating will take place at the next PPF uprating, which means January 2027 on current estimates.

• 8 Dec 2025 · Pensioner Poverty · Hansard source

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  To tackle pensioner poverty, we are both increasing the state pension and running the biggest ever pension credit take-up campaign. Raising the new state pension in line with the triple lock over this Parliament is set to increase it by over £2,000 a year, while 60,000 extra pension credit awards were made in the year to July compared with the previous 12 months.