HL Deb 01 July 2004 vol 663 cc418-22 For tax purposes civil partners shall be treated as in the Finance Act 2004."

The noble Lord said: My Lords, I want to make two points; one specific point and one general point. I have tried on two previous occasions to refer to the press release issued by the Inland Revenue ahead of this Bill, saying that the Civil Partnership Bill is social policy legislation, so any tax consequences would be dealt with in the "first available Finance Bill". It seems absolutely clear that the first available Finance Bill is the one now going through the House of Commons, but as I far as I can see no tax consequences of this Bill appear in that Finance Bill, at any rate as far as government amendments are concerned. Was the press release simply wrong, or will some clauses appear in the Finance Bill that will eventually become the Finance Act 2004? Repeated attempts to get an answer to that have totally failed. I should like to have an answer.

My second point is more general. We have discussed at some length the proceedings of last week and the consequences of them. If one thing is absolutely clear, it is the degree of sympathy felt in your Lordships' House for carers and others who were not originally covered by this Bill. The provisions that we have now attempt to do so, but the noble Baroness, Lady Scotland, has pointed out some of the problems that might arise if the Bill were to remain in its present state. None the less, given the degree of sympathy that has been expressed, particularly with regard to inheritance tax, and the feeling that in removing one set of injustices experienced until now by those who were covered by the Bill as originally drafted, we have brought into sharp focus the problems suffered by others. It might happen that they are sharing accommodation, one dies, and the other finds that he can no longer occupy it because of the effect of inheritance tax.

My understanding is that an amendment covering this point in the Finance Bill has been, or is about to be, tabled in the other place. I hope very much that the Government could help these people as far as concerns inheritance tax. It would after all, except in very exceptional circumstances, merely be a question of cash flow for the Revenue. On the other hand, it would seek to treat a group of people covered as they were by my noble friend Lady O'Cathain's amendment last week in a way that does not create some of the problems to which the Government have rightly drawn attention. I hope therefore that the Government will fulfil their claim in the press release that they will legislate in the Finance Bill, and that they will take into account not only those originally covered by the Bill, but those who are now having it extended to them, though not necessarily with the requirement to form a civil partnership in order to get that advantage. I beg to move.

Lord Goodhart

My Lords, it is not appropriate to insert provisions relating to taxation into a Bill in your Lordships' House, since taxation is entirely a matter for the other place. However, pensions provision is a different matter.

What the noble Lord, Lord Higgins, said reflects a fundamental defect in the view taken on this Bill by speakers on the Opposition Benches. I refrain from referring to "the Opposition", since they claim to have had a free vote; no doubt they had. The point at issue is that this Bill was never, as we understand it, in its original concept intended to be a tax Bill. It was intended to grant recognition to a legal relationship between partners of the same sex. The tax issues were consequences of that object; they were not the object in themselves. Those Conservatives have here made taxation the primary object of the Bill. Although we too have considerable sympathy for the problems raised, we wish to make it clear that we do not think that this is the right Bill in which to raise these issues. That is a matter for the other place in a Finance Bill.

2.30 p.m.

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham)

My Lords, the noble Lord, Lord Goodhart, is right, as so often: it is not a tax Bill. In moving the amendment, the noble Lord, Lord Higgins, also touched, in a way, on the ground of a subsequent amendment—Amendment No. 40, I think—which deals with the same issues. The first point that the noble Lord, Lord Higgins, raised was whether the unamended Bill would be incorporated into the first available Finance Bill. As the Finance Bill is currently going through the House of Commons, he asked about the Government's intention. There are two "ifs" relating to that. First, the Bill as unamended must go through; and, secondly, the amendment that your Lordships chose to pass last week must be overturned. In either circumstance, we could not incorporate a version of civil partnership before the other place had made a decision on what it embraced. That must be determined before anything could be incorporated in a Finance Act. The Finance Bill makes no mention of civil partners and cannot do so until the Civil Partnership Bill passes.

I am sure that the noble Lord is using the amendment as a probing amendment, even at this late stage, so given the high degree of respect and courtesy with which we have always sought to exchange with each another, it may be helpful if I put the Government's intentions on record. The fiscal consequences of the Civil Partnership Bill are crystal clear. We have already announced that, for all tax purposes, same-sex civil partners will be treated in the same way as married couples, if the Bill proceeds in its original form, without the extension to the categories of civil partners made last week by the amendment tabled by the noble Baroness, Lady O'Cathain.

The Government went further and made it clear that all tax consequences of the Civil Partnership Bill, as it applied to same-sex couples, would be addressed and debated at the appropriate time in the first available Finance Bill. That is still the case if the Bill completes the legislative process with the category of civil partners defined only as same-sex couples. We expect that, if the Bill that we are debating is passed and concerns same-sex couples only, it will come into force about a year after Royal Assent. There will be plenty of time for another Finance Bill, to include provisions dealing with the tax consequences of the Civil Partnership Bill. If the Bill proceeds in its current form, the tax matters will be dealt with in the normal Budget process.

I hope that, with that explanation, the noble Lord, Lord Higgins, will be able to withdraw the amendment.

Lord Higgins

My Lords, I think that the noble Baroness is saying that the press release was wrong. However, given the importance of press releases—with the question of abolishing the Lord Chancellor, for example—one must be sensitive about them. What was in the press release is incorrect: the matter will not be dealt with in the next available Finance Bill.

Baroness Hollis of Heigham

My Lords, it is my fault that I do not have the particular press release to hand. I did not know that the noble Lord was going to refer to it.

I do not see how any Bill can pre-judge another Bill that has not yet concluded its proceedings. In so far as the press release said "the next available", it could only have meant the next available Finance Bill after this Bill had terminated its parliamentary progress. Therefore, it seems to me that, as described, the Inland Revenue's press release was exactly correct.

Lord Higgins

My Lords, I am surprised to hear that the noble Baroness was unaware that I would refer to it. I referred to it in Committee and on Report. However, I think that, on those occasions, she was not going to reply to the particular debate. That may be why.

The press release was clear. It says that any tax consequences will be dealt with in the first available Finance Bill. They are not being dealt with in the first available Finance Bill.

To respond to the noble Lord, Lord Goodhart, I must say that I have not at any stage said that the primary purpose of the Bill was taxation. Tax is an important aspect of it, but I have accepted all along that the primary purpose is the one that was put forward by the noble Lord, Lord Lester of Herne Hill, in his Bill. That is undoubtedly the main purpose, but the fact is that there are important tax consequences.

The point that I sought to make was that, whatever one does about the original scope of the Bill, the House has expressed enormous sympathy for those covered by the amendment carried last week. I hope that the Government will take into account the strength of feeling expressed in your Lordships' House on that issue, when they consider the financial consequences in the present Finance Bill. My understanding is that an amendment has been tabled, and I hope that the Government will be sympathetic to it.

We cannot take the matter further at this stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 245 [Power to amend enactments relating to pensions]:

[Amendments Nos. 25 and 26 not moved.]

Clause 252 [Extent]:

Baroness Hollis of Heigham

moved Amendments Nos. 27 to 31:

Page 124, line 11, leave out "and 14" and insert "to 20"

Page 124, line 15, at end insert—

"(c) sections 220 to 224 extend to Northern Ireland only."

Page 124, line 20, at end insert—

"( ) Section 242 extends to Northern Ireland only."

Page 124, line 22, leave out "or repeal" and insert ", repeal or revocation"

Page 124, line 23, leave out "or repeal" and insert ", repeal or revocation"

On Question, amendments agreed to.

Clause 253 [Commencement]:

[Amendment No. 32 not moved.]

Schedule 10 [Family homes and domestic violence]:

Baroness Hollis of Heigham

moved Amendment No. 33:

Page 223, line 9, after ""(j)" insert "Schedules 6 to 8 to"

On Question, amendment agreed to. Schedule 16 [Financial relief in the High Court or a county court etc.: Northern Ireland]:

Baroness Hollis of Heigham

moved Amendments Nos. 34 and 35:

Page 243, line 42, at end insert—

"to the satisfaction of the court, such periodical payments for such term as may be specified;

(f) an order that one of the civil partners must pay such lump sum as may be specified—

(i) to such person as may be specified for the benefit of a child of the family, or

(ii) to a child of the family."

Page 273, line 3, at end insert—

"() In this Schedule "the court" has the meaning given by section 183."

On Question, amendments agreed to.

Schedule 17 [Financial relief in court of summary jurisdiction etc.: Northern Ireland]:

Baroness Hollis of Heigham

moved Amendments Nos. 36 to 39:

Page 283, line 14, leave out "(5)(a)(i)" and insert "(5)(a)"

Page 283, line 16, leave out "(5)(a)(i)" and insert "(5)(a)"

Page 291, line 32, leave out from "apply" to end of line 34 and insert "for the purposes of this Schedule as they apply for the purposes of that Order."

Page 291, line 44, at end insert— () In any provision of this Schedule "the court" (except where the context otherwise requires) means a court of summary jurisdiction which by virtue of this Schedule or of rules of court has jurisdiction for the purposes of that provision. On Question, amendments agreed to.

Schedule 24 [Social security, child support and tax credits]:

Baroness Wilcox

moved Amendment No. 40:

Page 344, line 9, at end insert—