Pension Sharing (Hansard, 1 July 1997)

§ Baroness Young
asked Her Majesty's Government:
When they propose to publish the draft Bill on pension sharing on divorce.

§ The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham)
My Lords, I think it fitting that the noble Baroness, Lady Young, who helped me harry the noble Lord, Lord Mackay, is now (in the nicest possible way) harrying me.
83 We all want pension sharing. It is fair; it recognises the contribution of both spouses to family income; and it improves pension income in retirement, especially of women. We shall be publishing a draft Bill during the coming parliamentary Session to help make sure that the legislation is sound. Our aim is to do so by the early part of next year so that we can meet our implementation target of April 2000.

§ Baroness Young
My Lords, in thanking the Minister for that reply, I also thank her for the letter she sent me on the matter. As she would expect, I am somewhat concerned by her Answer. Is she aware that it had been the intention of the previous Government to publish a Bill this coming November? From her reply, it appears that she will publish only draft legislation. Given the length of time that any legislation takes, can the noble Baroness satisfy us that we shall see pension sharing in force by the year 2000?

§ Baroness Hollis of Heigham
My Lords, like the noble Baroness, I, too, am anxious to see the April 2000 target delivered. However, the noble Baroness will know that the current Government face extreme pressure on the legislative timetable. Almost every department in government has had to lose to subsequent Sessions Bills they would have wished to have seen in the first Session. The Department of Social Security is no different in that respect from other departments.
As Members of the former Government Front Bench will be aware, the Bill is technically very complex and needs the support of the pension industry and lawyers. The Pensions Management Institute has said that getting the legislation right is more important than getting it through quickly.
I have checked on the timetable. Had we taken the Bill through Parliament this Session I doubt whether that would have allowed us to have improved much on the April 2000 target.

§ Baroness O'Cathain
My Lords, are sufficient resources being employed to ensure that this legislation gets through as quickly as possible? We all have the same objective in mind: to get the legislation through properly as quickly as possible. But I agree with my noble friend Lady Young. I am slightly perturbed by the use of the word "draft". I hope that all resources are put behind this new department.

§ Baroness Hollis of Heigham
My Lords, I, too, share the noble Baroness's concern. I am satisfied that we have sufficient staff for this. I am also satisfied that the draft Bill which will be published early in the new year will for the first time allow us to engage those players—the industry, the legal profession, women's organisations, the British Diplomatic Spouses Association, Fairshares, and the like—to be able to consult on a draft Bill. It is the first time that that has been done in the DSS. We are putting the emphasis on consultation prior to the final Bill going into Parliament rather than spending the time on the implementation 84 period thereafter. That is how we are balancing the issue given the pressures on the legislative timetable that I am sure noble Lords will appreciate.

§ Baroness Carnegy of Lour
My Lords, my noble friend asked the Minister whether there are adequate resources. The Minister replied in terms of staff. Can the noble Baroness tell us whether the delay has anything to do with the cost? Are the Government able to meet that cost in their proposed budgeting, and, if so, roughly what might that cost be?

§ Baroness Hollis of Heigham
My Lords, there are potential costs to the Government as an employer were people employed by the Government enabled to take their share of pension splitting out of the scheme. That is why we entirely support the previous Administration's proposals—I believe that they were supported by the entire House—that where one is dealing with unfunded schemes, as with the Civil Service and the like, former spouses become scheme members of the existing scheme and may not take their money out.
As for the rest of the additional cost, it is certainly true that there may be implications for tax relief for the Inland Revenue on the level of pension splitting and the headroom between that and tax relief. But clearly that in itself depends on the financial arrangements that will circumscribe the tax relief of pensions over the next 50 years. Against that, there are clear savings which will come from floating up many women—they would otherwise be on income support—from being dependent on benefit in old age.

§ Lord Ewing of Kirkford
My Lords, having listened to that rather complicated reply, would it not be easier to stay married?

§ Baroness Hollis of Heigham
My Lords, it may be easier, but whether that is in the nature of harmony is another matter.

§ Lord Mackay of Ardbrecknish
My Lords, does the noble Baroness recall her impatience with me last year when I suggested that this was a difficult issue? Does she recall dividing your Lordships' House successfully against me putting in a clause in the divorce Bill which would have implemented pension splitting almost immediately—a clause long in principle and very short in detail? Was she wrong when she said that pension splitting was a simple thing to do and that I was just dragging my feet? If she was wrong, I hope she will say that she was wrong and accept that I was right to say that it was difficult.
However, having said that it was difficult, am I right in saying that a Green Paper and a White Paper were produced by me and that we were ready to move? Is the noble Baroness telling me that we shall not have a Bill until the 1998–99 Session, and that a whole year is to 85 elapse? Is the noble Baroness satisfied that she is doing what she pleaded in your Lordships' House for government to do a year ago on this issue?

§ Baroness Hollis of Heigham
My Lords, I am being advised by my noble friends to answer two of the noble Lord's questions, but that would be such a pity. I would much prefer to answer as many as possible.
The problem was created by the noble Lord when he as Minister had to be persuaded through two separate Bills—first, a Pensions Bill and, secondly, a Family Law Bill—to enshrine in legislation the commitment of this House to pension sharing. Had the Minister and the Government of the day not resisted pension sharing for as long as they did so that it took the combined efforts of the entire House to persuade and overwhelm the Minister, no doubt we would have been further forward than we are today.
On the second of the noble Lord's questions—or was it the seventh?—yes, I am as confident as I can be that we shall meet our target date of April 2000. However, given the pressure on legislative time as well as the willingness to consult, that seems to us the most practical way forward.

§ Lord Harris of Greenwich
My Lords, is the noble Baroness aware that many of us welcome the idea of publishing a Bill in draft? That will probably avoid the problems associated with the Child Support Agency, to take a single example.

§ Baroness Hollis of Heigham
My Lords, that is absolutely right. Too often over the past 18 years we have seen badly drafted legislation in which the Government of the day resisted all the amendments from the Opposition Benches. That has subsequently meant, as with the CSA, that we have had to have regulations every six months, and a new Bill every 12 months, in order to produce the legislation which should have been properly drafted in the first place. We do not wish to see that happening to this Bill.

§ Lord Mackay of Ardbrecknish
My Lords, as we appear to have the time, perhaps I may ask a further question. Can the noble Baroness explain why she insisted that her amendment should be put to a Division and was won on the Bill, if the whole issue was as difficult as she suggests?

§ Baroness Hollis of Heigham
My Lords, because I had no confidence that the government of the day would deliver.

§ Baroness Seccombe
My Lords, the Minister said that she believes in pension splitting. Does she agree that there is another group of women who remain married but who would benefit greatly from pension splitting at the stage of their husband's retirement? Will she consider that point together with other matters?

§ Baroness Hollis of Heigham
My Lords, perhaps the noble Baroness will forgive me; it may be my fault, but 86 I am not entirely sure that I understood the purport of the question. Was she referring to judicial separation or the problems associated with earmarking?

§ Baroness Seccombe
My Lords, I was referring to the wives who remain married but who, for fiscal reasons, would benefit if their husbands were able to share their pensions because the tax would be different. Very often those wives contributed towards their husbands' occupations.

§ Baroness Hollis of Heigham
My Lords, I apologise for misunderstanding the purport of the question. The noble Baroness is right, there is always the problem that if the financial arrangements of a marriage are broken up and two people are treated as though they were single, they are in a different financial situation from the one where they are married. But against that, it must be said that married couples enjoy a whole array of financial advantages under the law—perfectly properly, in my view—which more than compensates for that.