REMOVAL OF DISCRIMINATION IN OCCUPATIONAL PENSION SCHEMES (Hansard, 19 April 1985)

§ Ms Richardson
I beg to move, That the clause be read a Second time.
I do not wish to detain the House long with this probing new clause. The House will know that in 1983 the European Community produced a draft directive on equal treatment in occupational pension schemes. It provided for equal treatment in access to schemes, entry ages, benefits, reimbursement of contributions, retirement ages, contribution rate, transfers, preserved benefits, and so on. However, there was a significant exclusion clause in the draft directive, which recognised the link with the provision of statutory state schemes. It permits the 480 deferment of compulsory application of the principle of equal treatment in retirement ages and benefit to a surviving spouse, until they are equalised at state level.
Last year an amendment was tabled in the European Parliament, which was carried, to delete that clause. That has now gone to the Commission for consideration. I understand that the matter is still with the Commission, and I should be interested to hear from the Minister, who may have been involved, what progress has been made within the Commission about that. I hope that the Government are not dragging their feet. Although I have heard rumours about that, I await the Minister's reply.
We seek to help the Government consider the amendment from the European Parliament. We have decided to table this new clause to the Social Security Pensions Act 1975—I am not sure whether the new clause is defective or whether it achieves my aim—to equalise benefits in the state scheme and, therefore, to pave the way for equalising treatment in occupational pension schemes in general.
There is a genuine difference in the treatment of widows and widowers in pension schemes. In pension schemes in both the private and public sectors, the number of pensions provided for widows of male members rose sharply in the 1970s, but the provision of pensions for widowers did not rise so sharply. A recent study commissioned by the Equal Opportunities Commission showed that by 1979 89 per cent. of male members had such an entitlement to benefits for their spouses, but that the provision for female members' spouses was less universal. By 1983 only 33 per cent. of schemes automatically provided a widower's pension on death in service, and 55 per cent. did so only when the widower showed that he had been dependent on his wife. As society has traditionally viewed the wife as being dependent on her husband, it must be difficult for many men to feel that they are regarded as dependent on their wives. They should not have to do that.
In many cases the widow of a male member receives not only a widow's pension, but a lump sum benefit. Therefore, it is extremely discriminatory in both the private and public sectors of pension schemes. Throughout the schemes in both sectors is the issue that widowers shall qualify only if they can show themselves to have been dependent on their late wives.
We live in a different age, and it is time that we came to grips with the question of differentiation and discrimination in pension schemes, which, curiously, causes great resentment in both males and females. Female members of pensions schemes resent paying into a scheme and not being able to nominate their spouse, and their spouses feel resentful that they cannot qualify.
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The main argument for many years has been one of cost and of the difficulty of equalising schemes in the non-state sector. However, I am sure that the Minister will have seen a document published last month by the Equal Opportunities Commission called "Model of Equality." It was prepared for the Commission by Duncan C. Fraser and Co., Actuaries, and it is, A Consulting Actuary's Report on the methods and costs of equalising the treatment of men and women in occupational pension schemes. The final comment is: 481 We have also shown that equality of treatment in the provision of surviving spouses' pensions can be provided at relatively low cost. I hope that the Minister, who must have seen and studied the document, will consider carefully—although perhaps not through the new clause, which is probably not the right way to do it—how he can ensure in discussions with the Commission, or in any other way, that occupational pension schemes make equal provision for both sexes.

§ Mr. Whitney
I can add little to the information that the hon. Lady has already given to the House. As she said, the equal treatment of women and men in occupational pension schemes continues to be under active consideration, and the European draft directive which aims at preventing discrimination in occupational pension schemes —not just contracted-out schemes —is being discussed in Brussels and in the House. She referred to the decision of the European Assembly to change the provision on the relationship between state schemes and occupational pension schemes. The matter is still being discussed at an official level committee in Brussels. It is too early for me to say what the outcome of those discussions will be.
The Occupational Pensions Board believes —the Government agree with its view—that, although there are differences between survivors' benefits, mainly for widows and widowers in the state scheme, occupational pension schemes should not be required to introduce equality in those areas. Of course, there is nothing to prevent those responsible for occupational pension schemes from introducing equal treatment for men and women, and some schemes already make such provision.
We recognise that there is a long way to go, but it must be accepted that all occupational pension schemes are set up voluntarily by employers. That point applies to many other matters that we have discussed during our consideration of the Bill. The voluntary element of the establishment of such schemes is important. The employer must decide whether new arrangements can be introduced and bear in mind all considerations, including possible additional expenditure. I recognise the hon. Lady's quotation from the report that there would be relatively low costs, but costs there would be.
As my hon. Friend the Minister said, the Government support in principle the idea of equal treatment in all areas, including this one, so we have welcomed in principle the draft European directive. But at this stage it is more appropriate to pursue that objective by voluntary action than by legislation. I hope that, in the light of those remarks, the hon. Lady will accept that it would be premature to take action now.

§ Sir Brandon Rhys Williams
I rise to support the new clause, and I apologise to the hon. Member for Barking (Ms. Richardson) for not being here at the beginning of her speech. I thought that she would make an extremely competent case and indeed she did. She does not need my support, but I wish to express some disappointment at what I just heard my hon. Friend the Minister say. Once again, the Department seems to be falling over backwards to emphasise the fact that employers introduce occupational pension schemes on a voluntary basis and, therefore, can be allowed to run them in a way that is contrary to the general movement of public opinion.
One of the irreversible changes of the 20th century—it is certainly irreversible in the time scale that we can 482 contemplate—is the emancipation of women and the desire that they should be treated on an equal basis with men. That should certainly be the case, if possible, in their cash relationships with their employers. An occupational pension scheme should treat male and female contributors on a precisely unisex basis. As I said in Committee, it would be possible for that to be done, without distorting actuarial principles, if a little ingenuity were applied. It does not even require a tremendous extension of the cost of the scheme to treat male and female contributors on the same basis. Matters can be balanced in ways which I mentioned in Committee and which I shall not repeat now.
I ask my hon. Friend the Minister to realise that, if the Government are to rely wholly on private occupational pension schemes to look after the earnings-related element of pension provision, these schemes must be in line with public opinion. If they continue to defy public opinion on the equal treatment of the sexes, that will be a nail in the coffin of the private occupational pensions movement. Women have votes and they should have justice in relation to their pensions.

§ Ms. Richardson
I could hardly have replied to the Minister better. I welcome the hon. Member for Kensington (Sir B. Rhys Williams) to the feminist movement. I hope that in areas other than occupational pensions, in which he is a renowned expert, he will add his voice to complaints against discrimination.
I am not happy with what the Minister said, because it seems that this will be one of those areas which are always hushed back. We are talking about unfairness and injustice, and I hope that the Minister realises that we do not intend to leave the matter there. There will be opportunities, now that the matter is with the Commission, for us to press the Government to find out what is happening and at least to ask the Government to take a positive stance in the Commission. The Minister did not say that they were doing so, but I hope that at least they will do that.
On the understanding that we shall not let this matter go until the Government change their mind, I beg to ask leave to withdraw the motion.