Baroness Altmann (Non-Afl)

My Lords, this group of amendments is, once again, trying to do the work that needed to be done before we had this Bill. All the proposals are important, in my view. Mine is a version of what we need to find out. I genuinely believe that this needs to be done independently of government because there are so many elements that government may not or seems not to have considered. Effectively, this is another tax increase. At the margin, it can only make pension provision worse. It cannot improve it at a time when we are supposed to be trying to help people have better pensions going forward. It can only, at the margin, as I say, deter employers and employees at the current levels of provision and encourage reduction. The Society of Pension Professionals has pointed out that 290,000 employers are using salary sacrifice in this country at the moment. We know that there is an expected saving in 2029-30 of £4.8 billion and a further saving of £2.6 billion in 2030-31, but even with those figures, the OBR points out that the revenue raised is subject to uncertainties related to the potential responses to the change. We have heard an awful lot about the potential responses to the change today and it is inevitable that, although the Prime Minister stressed in March 2025 the Government’s commitment to reduce employers’ compliance costs by 25%, this Bill alone will significantly increase the cost for those employers who have been using salary sacrifice as a way of helping their employees have a better pension outcome. Pensions administration is already a problem that has been swept under the carpet for far too long. We know that the pension rules are ridiculously complicated and that data errors abound. If we continue to have these ongoing changes or salami-slicing of the tax advantages that pensions have, rather than one holistic review of how we provide pensions and incentivise both individuals and employers to provide for themselves in later life, then we will never end up with the kind of system we need. We will continue to add complexity to an already extraordinarily complex system. I hope that my suggestion of a review, which would include what this Bill would do to the use of salary sacrifice as a whole by employers, will again signal to the Government what the likelihood seems to be. Given that the Bill already foreshadows future changes, employers who are currently running salary sacrifice will start to realise just how complicated it will be to adapt to the measures of this Bill. They will then think, “Are we going to have to go through this all again if the limit changes or if some other change happens? We’ll just abandon the idea of salary sacrifice altogether, and perhaps those who are already contributing more than the minimum will cut back to the minimum”. We need to be very mindful of this kind of change and whether we can have a holistic overall view of pension provision in the private sector, in particular, and the way in which we incentivise employers and employees.