HL Deb 01 July 2004 vol 663 cc422-30

In section 18(1), (2) and (3) for "spouse" substitute "spouse or registered civil partner"."

The noble Baroness said: My Lords, I understand that my colleague has spoken about tax, and I can see how the Minister might think that that overrides the amendment that I have tabled. However, my amendment has a particular aspect on which I would be grateful for the Minister's response. As the Government have been most helpful in their responses today, I hope that the Minister will not mind my using another couple of moments of her time.

I heard the response that the matter would be dealt with in the next Finance Bill., but, as the Minister knows, the Bill started in this House, and we will have to pass it in this House on the promise of things to come. I have had a lot of post from people—including those covered by the new amendment—who are obviously confused and excited about the idea that they will not have to suffer the problems of inheritance tax any more, if they can form a civil partnership.

I do not want the Government to give me another lecture about last Thursday's amendment or the Minister to tell me that the matter will be dealt with in the next available Finance Bill—I understand that; she articulated it most clearly—but I must ask whether this House will be able to know the Government's intention in this area. One of the benefits that the Marriage Act brings to all other married couples is that, if two people live together under the contract called marriage—it will be called a civil contract, when, as I hope, the Bill goes through—they do not have to suffer the misery of moving out of their home because of its value for inheritance tax reasons. Can the Minister give this House some feeling of the Government's intention in that area? I beg to move.

Baroness Hollis of Heigham

My Lords, I do not think that I can take the House much further than my response to the previous amendment, moved by the noble Lord, Lord Higgins. The noble Baroness said that she had had a large postbag from people in the new groups covered by the amendment moved last week who were confused and excited—

Baroness Wilcox

My Lords, I do not want to confuse the Minister. I was trying to capture the fact that my amendment had originally dealt with the Bill, as intended. Now, of course, I too must include the other people. Since the beginning of the Bill, however, my main postbag has, of course, come from homosexual and lesbian couples. Obviously, they were excited by the Bill. It follows the Bill introduced by the noble Lord, Lord Lester of Herne Hill, which I supported, just as I support this one. My post came from people who originally saw themselves as the main beneficiaries of the new civil contract.

I do not want the noble Baroness to think that my postbag has come from people, in a moment of excitement, following the amendment on Thursday. I have received a heavy postbag and I know that other Members of this House—certainly on my Front Bench—have too. I am very sorry if the Minister has not received any letters of a similar nature from people who express how pleased they are, particularly as regards inheritance tax.

Baroness Hollis of Heigham

My Lords, I do not think that the last remark was relevant. My ministerial postbag is my ministerial postbag. I am concerned to make the point that I would be very anxious if groups over and beyond those under the original shaping and umbrella of the Bill now believe, following last week—which is what the noble Baroness said—that there are new possibilities of adjustments to inheritance tax rules and so forth as a result of the amendment. If the noble Baroness—

Baroness Wilcox

My Lords, perhaps I may interject once more. The noble Baroness is really holding on to the point of the "new people". I am obviously not being very clear, for which I apologise to the House. The postbag to which I am referring, right now as I stand here, is that which I received before last Thursday. Will the Minister address her comments to that postbag, which I received from those people who, at that time, were being referred to in this Bill? My question still stands: can the Government tell us their intention in that area?

Baroness Hollis of Heigham

My Lords, again, as I said to the noble Lord, Lord Higgins, my response to that point, as opposed to the other point raised by the noble Baroness, is exactly the same. This amendment seeks to alter provisions of the Inheritance Tax Act relating to transfers of value so that civil partners will enjoy the same inheritance tax relief as enjoyed by a married couple.

The scope of the Bill is now entirely different from that which was originally envisaged as a result of the amendment tabled by the noble Baroness, Lady O'Cathain. The categories of civil partners presently extend to those within the specified degrees of family relationship who meet the conditions imposed by the amendment. If the amendment is retained throughout the legislative process, in order to deal with and reflect those changes to the scope of the Bill, the Government will be required to undergo a considerable review of the tax consequences which follow from those changes. That will be dealt with as part of the normal budget process.

In so far as the noble Baroness seeks clarification, I repeat what I said to the noble Lord, Lord Higgins. When the Civil Partnership Bill was published on 30 March, the Government announced that for tax purposes same-sex couples who form a civil partnership would be treated the same as married couples for inheritance tax and other related purposes.

The Government's intentions regarding the fiscal consequences of the Civil Partnership Bill as presented to this House on 30 March 2004 were, in my view, crystal clear. The Government had already announced that for all tax purposes, including inheritance tax, same-sex civil partners were to be treated the same as married couples. Nothing could be clearer than that. The Government had also gone further and clarified that all tax consequences of the Civil Partnership Bill would be addressed and debated at the appropriate time, once the Bill had become, or should it become, an Act, in the first available finance Bill following the completion of parliamentary scrutiny.

However, as I said to the noble Lord, Lord Higgins, if the Bill remains in its present form, tax changes will be considered as part of the normal budget process. I would urge the noble Baroness to withdraw her amendment.

Baroness Wilcox

My Lords, I thank the Minister very much for that answer. It has been extremely helpful. I am delighted to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn. 2.45 p.m.

Schedule 25 [Amendment of certain enactments relating to pensions]:

Lord Higgins

moved Amendment No. 41:

Page 344, line 12, leave out paragraph 1.

The noble Lord said:

My Lords, it would be helpful to discuss Amendment No. 41 with Amendments Nos. 42, 43 and 44, although they cover a most extraordinary range of issues ranging from the Fire Services Act 1947, the House of Commons Members' Fund Act 1948, the Parliamentary and other Pensions Act 1972 and the Theatres Trust Act 1976.

I should like to make a couple of general points. The gap between the provisions of public sector pensions, which are frequently of a final salary type—sometimes of a non-contributory final salary type—and private sector pensions, as a result of various changes that we have seen since 1997, is getting wider. But in one respect at least, the public sector seems to be lagging behind the private sector; namely, the extent to which trustees are given discretion to make provision not simply for spouses but, very often, to enable the beneficiary in the pension scheme to decide to whom the survivor's pension should go in due course.

These clauses seem to perpetuate the situation whereby the survivor's pension is restricted to a surviving spouse or a surviving civil partner. Would it not be better to say that the trustees should have discretion in each of those cases? That could include surviving civil partners, as well as any other individual. That best practice in many private schemes would enable the beneficiary to state who ought to receive the survivor's pension when he or she dies.

Why the Theatres Trust Act is singled out for that statement, I am not clear. Nor am I clear about why the Fire Services Act should be singled out. On what basis have four Acts been singled out for apparently special, explicit treatment in the Bill rather than dealt with in the generality? I beg to move.

Baroness Hollis of Heigham

My Lords, I shall try to answer the noble Lord's questions. Following the amendment laid by the noble Baroness, Lady O'Cathain, which widened the scope of the Bill to include close family members, I have already explained why the Government would not wish to extend survivor benefits to this group of people. I shall not go over those arguments yet again. In response to this seemingly probing amendment, even at this late stage, tabled by the noble Lord, Lord Higgins, I shall seek to indicate the original intention of the Government in including what is now Schedule 25, which was originally Schedule 24, in the Bill

Schedule 25 is the first of two sets of provisions that were intended to amend existing pensions' legislation to make provisions for surviving civil partners. Schedule 26 amends enactments relating to the Armed Forces.

The rules of most public service schemes are set out in secondary legislation, which can be amended using the broad scheme-making powers that already exist in the primary legislation that sets the scheme up. For example, the Superannuation Act 1972 sets up the PCSPS, local government, NHS and teachers' schemes. Other public service pension schemes exist that do not have such broad scheme-making powers set out in primary legislation which set the schemes up and which require complex amendments. They do not need to be amended in the Bill as they will be amended using the power in Clause 245—given all the qualifications that we have to keep making in respect of your Lordships' decision—of the Civil Partnership Bill.

However, Schedule 25 was intended to deal with four Acts that require very simple amendments in primary legislation which are most effectively made in the Bill rather than in regulations. Schedule 25 amends the Fire Services Act 1947, the House of Commons Members' Fund Act 1948, the Parliamentary and other Pensions Act 1972 and the Theatres Trust Act 1976.

The noble Lord asked in particular about the Theatres Trust Act 1976. The Theatres Trust does not currently employ any staff. A separate non-statutory charitable trust currently employs staff who assist the trustees of the Theatres Trust in carrying out their statutory functions. However, should the Theatres Trust itself employ staff in future, which cannot be ruled out, as a result of the Civil Partnership Bill, the amended Act would extend the power of the trustees in relation to providing pensions and gratuities to their employees to cover civil partners and clarify that the surviving spouses of both male and female employees are also covered by the same power. It is a peculiarity which is worth putting on the record.

These provisions were intended to enable payments to be made to surviving civil partners and their dependants as well as to surviving spouses. As the House is well aware, the Government are firmly against extending such rights to family members under the amended Bill, and the Government will seek to overturn the amendment to extend the scope of the Bill in another place.

I hope that my explanation is useful to the noble Lord, Lord Higgins, but on the basis of the information I have given him and in the context in which we are currently operating, I would ask him to withdraw the amendment.

Lord Lester of Herne Hill

My Lords, before the noble Lord, Lord Higgins, decides what to do about his amendment, may I ask for clarification of one point? Given what the Minister has said, are there adequate powers in the Bill to be able to amend the state pension scheme if the Government were to come to the view—which is not their present view—that it would provide a way of eliminating unfair discrimination? I refer, for example, to backdating to 1988 same-sex couples belonging to schemes in accordance with a view that the Government might then take about the Human Rights Act and the European Convention on Human Rights. I am not asking whether they agree with the substance, but do the provisions give the power to do that without the need to amend the Bill itself? I hope that I have made my question clear; I hope that I have.

Baroness Hollis of Heigham

My Lords, when he refers to state pensions, I do not know whether the noble Lord, Lord Lester, is referring to the single reference scheme test in defined benefit schemes and/or the protected rights in defined contribution schemes, or whether he is genuinely referring to state pensions. The issue does not arise in that way, as no doubt his noble friend Lady Barker will explain to him following our previous discussions. So I am not sure to which pension provision the noble Lord is referring.

I am not sure whether this is the appropriate forum in which to discuss the issue. However, I shall be perfectly happy to write to the noble Lord, which may be more appropriate given that we are at Third Reading. I could happily engage in a discussion at length about retrospectivity and so forth, and I acknowledge the fact that the noble Lord has not kept his amendment on the Marshalled List. It is my understanding that there are powers by regulation should this subject wish to be revisited by a Secretary of State at any future date. But I do not say that that would be easy, simple or straightforward. That is my understanding. Once more, I invite the noble Lord, Lord Higgins, to withdraw his amendment.

Lord Higgins

My Lords, before the noble Baroness sits down, she really has not taken the point I was seeking to make. These clauses enable trustees operating under the different schemes to extend their powers for surviving pensions to civil partners. I understood the noble Baroness to say that it would not be appropriate to extend them to those covered by the amendment carried last week. But what I have suggested would solve both problems at once.

In many private sector schemes, the question of who should receive the surviving partner pension or the survivor's pension is given to the trustees who, not infrequently, allow the person concerned not only to leave the pension to their spouse—or, as in this case, to their civil partner—but simply to leave it to someone whom they nominate. Is it not rather retrograde to perpetuate the old situation in these cases, which are not really in line with best practice in the private sector? Should the Bill not simply provide that the trustees may have discretion to allocate the survivor pension to someone nominated by the member? That would solve both problems at the same time.

I am sorry. I thought that this would be the best way of proceeding. I hope that the noble Baroness will respond.

Baroness Hollis of Heigham

My Lords, I am trying to follow the conventions of the House at Third Reading. I have already trespassed well beyond them in taking an intervention from the noble Lord, Lord Lester. I am in the hands of the House, but this is not the Committee stage of the Bill. I do not want to be unhelpful to the noble Lord because I have every respect for him. All I would suggest is that we shall shortly be considering the Pensions Bill when it comes before the Grand Committee. This is not the Bill to discuss alteration of the basic terms or construction within which trustees handle the headspace in public sector pensions. However, there is certainly a point to argue on that score.

Lord Higgins

My Lords, I sought to intervene before the noble Baroness sat down and I had hoped that I was very much in order in doing so, even at Third Reading. She had not taken the point I sought to make. The Government are extending the power of trustees, so are not trustees better served simply by having the discretion to give the survivor pension to someone who the beneficiary nominates? If the noble Baroness would like to write to me about it, fair enough. It is an important point which I hope will be put right when the Bill goes to another place. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 42 to 44 not moved.]

Schedule 28 [Consequential amendments: Scotland]:

The Duke of Montrose

moved Amendment No. 45:

Page 374, line 2, at end insert—

"In section 16(4) (petitions for recall of sequestration), for "section 41(1)(b)" substitute "sections 41(1)(b) and 41A(1)(b)"."

The noble Duke

said: My Lords, I am sure that it is a relief to many that we have reached the last group of amendments.

These amendments concern the Bankruptcy (Scotland) Act 1985. In moving Amendment No. 45, I shall speak also to Amendments Nos. 46 to 49. I spoke to amendments similar to Amendments Nos. 45 and 46 on Report at col. 1457. The arguments may be slightly different on Amendment No. 47. Its effect would be to insert a reference to a new paragraph (aa) into Section 42(d) of the Bankruptcy (Scotland) Act 1985. The reason for this is that paragraph 31(2) of Schedule 28 to the Bill inserts a new Section 40(2)(aa) into the Bankruptcy (Scotland) Act 1985. As a result, Section 40(2)(d) of the 1985 Act requires amendment to refer to new paragraph (aa).

Amendments Nos. 48 and 49 were also spoken to on Report. No doubt the arguments were clear enough at the time. I beg to move.

Lord Evans of Temple Guiting

My Lords, Amendments Nos. 45 to 49 have been drafted on the basis that civil partners should be treated in the same way as spouses. It does not automatically hold true that family members who have formed a civil partnership should be treated in the same way as spouses for the purposes of the Bankruptcy (Scotland) Act 1985. Although the amendments tabled by the noble Duke are very helpful, I am sure he will understand when I say that the Scottish Executive would wish to lay its own amendments to the Bankruptcy (Scotland) Act 1985 which, in its view, will be very comprehensive.

I hope that, in the light of my explanation, the noble Duke will feel able to withdraw his amendments.

The Duke of Montrose

My Lords, once again I am most grateful to the Minister for a very interesting reply. We can see how the interplay of legislation between the devolved administrations and the Government is working out. I hope that the Scottish Parliament will address the matter clearly if it is not something that we feel able to address here at this time.

I thank the Minister for his response. While I cannot speak for the House as a whole, for myself I have found it both entertaining and useful. I am only sorry that he was unable to give it at an earlier stage. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 46 to 49 not moved.]

An amendment (privilege) made.

Read a third time.

Baroness Scotland of Asthal

My Lords, I beg to move that the Bill do now pass.

Moved, That the Bill do now pass.—(Baroness Scotland of Asthal.)

3 p.m.

Lord Tebbit

My Lords, I do not want to detain the House for long. I wish, first, to express the view—which will not come as a shock to Ministers and others—that the Bill as drafted originally was, in my view, outrageously discriminatory. It has been so improved by the amendments carried against the Government last week that I cannot find it in my heart to oppose the Bill in its present form.

Secondly—I hope it will not be thought that I am straying too far out of order—I should like to apologise to the noble Lord, Lord Lester. In the heated nature of the debate last week, I believe that I was dismissive of something the noble Lord said to the point of rudeness. I do not want him to think that I was that dismissive; we were all trying to move on quite quickly and in a rather heated manner. I apologise to him for being so rude.

Lord Lester of Herne Hill

My Lords, the noble Lord is very generous. I would never ever suggest that the noble Lord, Lord Tebbit, is rude or dismissive, but he is perhaps sometimes a trifle sarcastic.

What happened to the Bill last Thursday has harmed the well-earned reputation of the House in exercising its crucial legislative powers. It has meant that we have not been able to debate the Bill's provisions as we had hoped. For example, I had intended to raise the issue of unjustifiable discrimination against same-sex couples in existing state and private pension schemes as regards survivors' benefits, especially in the light of a recent landmark decision in the House of Lords in the case of Mendoza.

I had to withdraw that amendment and the issue will now have to be raised and entirely decided in another place—no doubt taking into account, I hope, any forthcoming report of the Joint Committee on Human Rights.

I hope and believe that the fate of the Bill will not be like that of J.W. Turner's crippled "The Fighting Temeraire", the great vessel that was towed away and broken up. We are confident that the Bill will be repaired in the other place. When it comes back to this House, we shall see whether the Official Opposition will support this much needed legislation.

Baroness Scotland of Asthal

My Lords, I thank the noble Lord, Lord Lester, for what he has said. I also thank the noble Lord, Lord Tebbit, for the generosity of his admission as to what happened on Thursday. However, I say to the noble Lord that to describe the Bill as having been drafted in an outrageous and discriminatory way is a travesty. For some, the Bill was a thing of beauty and a joy for ever.

On Question, Bill passed, and sent to the Commons.

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