Baroness Neville-Rolfe (Con)

My Lords, I was disappointed that the Government sought to have all amendments passed by your Lordships’ House treated as engaging financial privilege. In light of this, we are unable to insist upon the amendments passed by your Lordships’ House. However, the issues we have raised remain of real significance. There is no sign that the Government have seriously engaged with the concerns we expressed. Significant features remain undefined. The amendments we have brought forward today reflect a concern raised by many noble Lords on Report: crucially, that the Government have not undertaken the necessary analysis to understand how the Bill will affect basic rate taxpayers, those repaying student loans, and SMEs and charities. The most worrying thing about the Bill is that it will reduce the incentive to save, particularly among the less well paid. Whether Ministers like it or not, it strikes at the heart of this and will inevitably reduce pension adequacy. The Minister himself has admitted that many of those paying the basic rate of tax and even some earning under £30,000 a year will be affected. Not only will the Bill affect savers and pensions adequacy, it will impose costs on businesses and charities. The detail on these points is, concerningly, seriously lacking. Our three amendments in lieu and the consequential amendments dealing with Northern Ireland require a proper assessment of the projected economic and behavioural impact of this policy on those three groups. Crucially, this work has to be carried out before the Act comes into force. First, for basic rate taxpayers there is a very real concern that this policy will reach far beyond those it is ostensibly aimed at. Individuals on modest incomes—those paying tax at the basic rate—may find themselves drawn into its effects. They are ordinary working people, often making careful decisions about how much they can afford to save. Yet we have not seen a clear assessment of how their net incomes will be affected, how their pension-saving behaviour may change or what this will mean for the adequacy of their retirement incomes. Secondly, for those repaying student loans, the interaction between salary sacrifice, pension contributions and student loan repayments is not straightforward. There is a real risk here that some individuals repaying student loans could face higher effective deductions from their income or altered incentives around saving for retirement. Our amendments would ensure that the Government properly assess the impact of these interactions. Thirdly and finally, small and medium-sized enterprises and charities are the backbone of our economy and our communities. They operate with limited margins and limited administrative capacity. Changes to employment costs, compliance requirements or remuneration structures can have tangible effects on hiring, wages and growth. The Government must be able to answer these questions. By how much will this Bill increase their costs? Will it change employment practices? Will it have an impact on wage growth or the critical area of job creation? This Bill would change how people save, how employers structure pay, and how organisations make decisions. Our amendments would simply require the Government to set out clearly and transparently what the effects are expected to be. They would offer the Government a constructive way forward and would seem to get round the problem of financial privilege. In responding, it would be helpful if the Minister could explain more clearly precisely why these provisions do not come into force until 2029. It looks as if this matter is regarded by the Government not as a serious measure but as a nasty present to their successors.