Lord Fuller (Con)

My Lords, I support Amendments 5 and 21 tabled by my noble friend Lord Leigh of Hurley, which rightly shine a light on the way in which this policy particularly benights graduates who are starting out in their careers. The Government have perpetrated the lie that the restrictions on salary sacrifice will affect only the fat cats, those with the broadest shoulders, whatever that means, the higher earners, another nebulous term, and certainly not hard-working families or those who are paid hourly. It is just not true. It is an example of Labour’s mis-selling, which is why I support Amendment 1 in the name of my noble friend Lady Neville-Rolfe. The Daily Telegraph reports that 3.3 million employees will be affected. The Times accuses the Government of wilfully obscuring the effects of their proposals on employees who are left behind after the real fat cats have run for the border. By far the most affected group are youngsters at the start of their careers—graduates, people making a start on their working lives. They are already burdened by the Renters’ Rights Act 2025, which has driven up their rents, and the Employment Rights Act 2025, which has made it harder for businesses to take a chance on someone starting out. Graduate programmes have been bombed out by the jobs tax and dynamited by the rise in the minimum wage which reduces the incentive for employees to train up the newbies. Now we have a further insult and assault on Generation Z with the proposals of this slim Bill with fat consequences in an unthinking aggravation of intergenerational unfairness. Let nobody say that Labour is on the side of youngsters who want to get on. Even the OBR has twigged what we on these Benches have been saying for months: that the cumulative effect of all these issues is damaging incentives to work and harming those trying to climb the ladder to success. At Second Reading, I gave the example of my daughter’s boyfriend who has a good job in the West End. He is no fat cat. He lives in a flatshare in Brixton with people he does not know, but his employer has recognised his hard work and, importantly, the value he brings to the business, so he was given a bonus of £17,000. Of that, he kept less than £6,000—a marginal rate of 71%—not just because of the tax, but on account of his student loan repayments. I do not know how it has taken so long for the OBR to realise that it does not pay to work. How much can these people be expected to bear? At least he had salary sacrifice to save for a pension for his future to reduce his reliance on the state in later life because, let us face it, employers are still shovelling cash into defined benefit schemes that are not even available to students who have to make do and mend with the less generous defined contribution arrangements instead, but even that has been snatched away by this Bill, as the noble Baroness, Lady Altmann, has so forensically exposed. Taken together, these proposals risk salary sacrifice being taken away as a thing, which will damage employers and damage their opportunities to attract and retain the best talent because it will become just too complicated. As the Spectator’s leader last week asked, is it still worth going to university? When the world’s oldest magazine starts questioning the value of higher education, you have to wonder for our economy, our society, the future prosperity of our nation and what it says about aspiration in these islands. As somebody said last week, you used to get something from hard work, a reward for initiative, doing the right thing, but instead everyone is being beaten with a stick.