HL Deb 02 December 1974 vol 355 cc52-6

5.20 p.m.

Lord WELLS-PESTELL rose to move, That the Draft Social Security (Contributions) (Married Women and Widows Special Provisions) Amendment Regulations 1974, laid before the House on 30th October, be approved. The noble Lord said: My Lords, as soon as Royal Assent had been given to the Social Security Act 1973 both Houses of Parliament approved Regulations which set up the framework of the system of contribution options for married women and widows required by Section 42 of that Act. The former Administration judged that the main features of the contribution arrangements needed to be approved and publicised at once. But as it was then late in July, 1973, and Parliament was anxious to rise for the Summer Recess, the rather technical transitional provisions were held back for later consideration. In presenting the present draft, I am fulfilling the previous Administration's promise. I must, however, emphasise that under the Government's Bill providing for better pensions, to be presented later in this Session, married women who go out to work and pay full contributions will receive the same pensions as men and single women with the same earnings record. The married women's option will ultimately be abolished and the Government are consulting interested organisations about the best way of phasing it out. Mean-while, we are bound by the terms of the 1973 Act to provide for the option. These Regulations are designed to help the system run smoothly and fairly.

Before I describe their effect, there are two matters to which I must direct your Lordships' attention. The first is that the operative date of these Regulations is to be seven days from today and not 6th April, 1975. You will find that there is a correction slip with the draft on that point. The change ensures that the wording of the original Regulations is brought up to date on 9th December, even though the Regulations as a whole will not operate until 6th April next. The second is that when making the Regulations the Secretary of State intends to correct a misprint on the fifth line of page 2, where the words "service or" should read "service of". I am sorry to have to take up your Lordships' time with these two technicalities.

Regulations 3 to 8 make minor improvements in the wording of the existing provisions. Only Regulation 4 makes any noticeable change, and that is only a small one intended to clarify the position of a woman who has chosen reduced liability while married, and who is later widowed or divorced. The old form of the Regulation would have put her election—that is, to opt out—into cold storage to be brought out if and when she re-married, perhaps many years later. The new form of Regulation relieves her of this hypothetical commitment. If, in the event, the widow or the divorcee does remarry she can, of course, take stock of her needs for benefit cover and make a fresh choice accordingly.

Regulation 9 adds the promised transitional provisions. They look complicated but are designed to work very simply and beneficially and to cut paper work to a minimum. The fundamental approach is that women who are entitled to make an election to opt out under the 1965 Act immediately before 6th April, 1975, will continue to have complete freedom of choice in relation to the first year of their contribution liability after that date. Of course, they will be bound by the ground-rules of the option as laid down in the 1973 Act, so that a choice, once made, applies to a full tax year and is binding upon both Class 1 and Class 2 contribution liability.

The new Regulation 10A has the biggest impact. Under it, the 4 million or so women who are currently at work when the new arrangements start and who have opted out of contribution liability under the 1965 Act will be deemed to have elected in favour of reduced liability for the 1975–76 and subsequent years. So, too, will the smaller number of self-employed married women who have not opted to be liable for contributions under the 1965 Act—they will be treated as having elected not to be liable for Class 2 contributions under the new arrangements. The new Regulation 10(b) deals with the new widows, and ensures that where the old provisions for exception from contribution liability had some time to run on 6th April next, there will be a further period of reduced liability under the new arrangements.

The new Regulation 1OC recognises that it may be unfair to a minority of women to assume that everyone who has opted out under the 1965 Act will wish to choose reduced liability under the 1973 Act. The Regulation enables such a woman to start paying standard-rate Class 1 contributions when in employment, if she wishes to do so. She can either formally revoke her election by signing a form or she can wait until she gets a job and just tell her first-employer after 6th April, 1975, to deduct the standard rate of contributions. Of course, if she chooses full liability she will have to pay all the contributions due in that year, and if it is found that she has paid some contributions at the standard rate and some at the reduced rate it will be she, and not her employer, who will be responsible for the difference.

The new Regulation 10D is procedural. For most women affected by the deemed election there will have been stamped cards current up to 5th April 1975. These cards are printed with a tear-off leaf which is to be kept by the employer when the card is surrendered by him and will show that the woman is liable to pay reduced-rate contributions under the new arrangements. But for a minority of women there will have been no stamp cards and they will have to obtain a certificate of election from the Department.

The new Regulation 10E is concerned with existing married women and widows for whom elections are not due to be deemed, for instance because they have not been employed since becoming entitled to elect and so have not previously had to make a choice. They will be able to make elections which will be effective as soon as they take up work. There is a special dispensation for non-employed women who have been married since before 6th April, 1975, and who become self-employed later. They may not know of the change in the law whereby a self-employed woman is liable unless she elects otherwise, so they are being enabled to opt out retrospectively during the first 3 years of the arrangements.

The new Regulation 10F is mainly designed to preserve, transitionally, certain discretionary powers of the Secretary of State in regard to belated notices of election under the 1965 Act. Leaflets telling married women and widows about the transitional rules will be available in the Department's local offices shortly. I hope I do not have to add that the staff at our local offices will be glad to deal with individual inquiries. My Lords, I beg to move.

Moved. That the Draft Social Security (Contributions) (Married Women and Widows Special Provisions) Amendment Regulations 1974, laid before the House on 30th October, be approved.—(Lord Wells-Pestell.)

Lord ABERDARE

My Lords, again we are most grateful to the noble Lord for having given us in full detail the content of these Regulations. As he will be aware, we on this side of the House believe that the right of a married woman to pay reduced contributions and to rely on her husband's contributions for her pension is a very valuable one, and we do not agree with the Government in the projected abolition of this particular right. However, this is not the time to argue that matter. So far as I understand it, these Regulations are concerned with the present arrangements for opting out and they are entirely acceptable to us.

Baroness PHILLIPS

My Lords, if she goes into this Class 1 contribution does the opted-out married woman who becomes a widow draw unemployment and/or sickness benefit?

Lord WELLS-PESTELL

My Lords, if my noble friend will allow me, I will have to look at that point. Off the cuff, I cannot tell her the answer.

On Question, Motion agreed to.