Previous Section Back to Table of Contents Lords Hansard Home Page


Lord Mackay of Ardbrecknish: I tried to answer those points in my speech and I do not wish to go over them all again. In the DSS scheme, the widows' pension exists in order to help maintain the widow who has lost her husband. When she remarries, she ceases to be a widow. That is the principle on which the scheme has been run for many years, under successive Governments, Ministers, Under-Secretaries, Ministers of State and government supporters of whichever party. I invite the Committee to consider that we would do better to leave the matter as it is, given the generosity of the whole scheme to existing war widows.

Lord Freyberg: I am grateful to those who have taken part in the debate on my amendments. I thank them for their useful and heartfelt contributions. I am disappointed in the Minister's reply and should like to come back on one or two points which he made.

I wish to respond to his statement that war widows' pensions are intended not as compensation but for maintenance. It is not enough to treat a war widow generously only when she is single; she is considering

21 Feb 1995 : Column 1086

remarriage precisely because her husband was killed in the service of his country. The only solution is to accept that war widows' pensions should be regarded as compensation and never removed.

It is also true that on a widow's remarriage, the DSS awards each widow a gratuity equivalent to one year's pension. For some widows, that amounts to £7,000, but for the vast majority who married before 1973, the payment was as little as £250. I entirely agree with the Minister that generous provisions are made for war widows, but the £7,000 per annum is nowhere near what their husbands would have expected, had they lived.

On costs, the Minister claims that restoring a DSS war widow's pension to all widows who have remarried since 1939 would have cost £60 million a year. With respect, that is only part of the story. On remarriage, post-1973 war widows would retain only their MoD attributable forces family pension and not their DSS war widows' pension. That would lead to significant DSS pension savings.

Finally, according to the Government's figures, 80 per cent. of war widows are over the age of 70, with some 1,300 dying per year. Awarding them a pension for life is not a long-term or permanent commitment. I do not accept that on remarriage a war widow should forfeit all her rights as the widow of a man who has died for his country. I therefore feel compelled to test the opinion of the Committee. I commend the amendment.

6.22 p.m.

On Question, Whether the said amendment (No.191B) shall be agreed to?

Their Lordships divided: Contents, 124; Not-Contents, 131.

Division No. 1

CONTENTS

Acton, L.
Addington, L.
Airedale, L.
Aldenham, L.
Allenby of Megiddo, V.
Ashbourne, L.
Bancroft, L.
Bath, M.
Blyth, L.
Boyd-Carpenter, L.
Bramall, L.
Bridges, L.
Brightman, L.
Brookeborough, V.
Brookes, L.
Carmichael of Kelvingrove, L.
Carnarvon, E.
Carver, L.
Chalfont, L.
Chapple, L.
Chichester, Bp.
Chorley, L.
Cocks of Hartcliffe, L.
Coleridge, L.
Congleton, L.
Craig of Radley, L.
Craigavon, V.
Cross, V.
Darcy (de Knayth), B.
David, B.
Dean of Beswick, L.
Dean of Thornton-le-Fylde, B.
Derwent, L.
Dormand of Easington, L.
Dormer, L.
Dubs, L.
Elis-Thomas, L.
Ennals, L.
Erroll, E.
Ezra, L.
Faithfull, B.
Falkland, V.
Fanshawe of Richmond, L.
Farrington of Ribbleton, B.
Feversham, L.
Fisher of Rednal, B.
Freyberg, L. [Teller.]
Gainsborough, E.
Geraint, L.
Gilmour of Craigmillar, L.
Gladwin of Clee, L.
Gould of Potternewton, B.
Gray, L.
Grey, E.
Halsbury, E.
Hamwee, B.
Harris of Greenwich, L.
Haskel, L.
Henderson of Brompton, L.
Henniker, L.
Hilton of Eggardon, B.
Holme of Cheltenham, L.
Hooson, L.
Howie of Troon, L.
Hughes, L.
Hylton, L.
Hylton-Foster, B.
Jeffreys, L.
Jeger, B.
Jenkins of Hillhead, L.
Kennet, L.
Keyes, L.
Kinloss, Ly.
Kirkhill, L.
Kitchener, E.
Lawrence, L.
Liverpool, E.
Lockwood, B.
Lytton, E.
Macaulay of Bragar, L.
Mar and Kellie, E.
McAlpine of West Green, L.
McConnell, L.
McGregor of Durris, L.
McNair, L.
Meston, L.
Milne, L.
Monson, L.
Montgomery of Alamein, V.
Moran, L.
Munster, E.
Napier and Ettrick, L.
Nelson, E.
Nicol, B.
Palmer, L.
Park of Monmouth, B.
Parry, L.
Pearson of Rannoch, L.
Rennell, L.
Ritchie of Dundee, L.
Rochester, L.
Rodgers of Quarry Bank, L.
Saltoun of Abernethy, Ly.
Seear, B. [Teller.]
Sefton of Garston, L.
Shannon, E.
Shaughnessy, L.
Simon of Glaisdale, L.
Simon, V.
Slim, V.
St. Davids, V.
Strabolgi, L.
Strafford, E.
Swinfen, L.
Thomson of Monifieth, L.
Thurlow, L.
Tope, L.
Tordoff, L.
Waverley, V.
Weatherill, L.
Westmorland, E.
Wharton, B.
White, B.
Wilberforce, L.

NOT-CONTENTS

Abercorn, D.
Addison, V.
Aldington, L.
Archer of Weston-Super-Mare, L.
Astor, V.
Balfour, E.
Barber, L.
Beloff, L.
Belstead, L.
Bethell, L.
Biddulph, L.
Birdwood, L.
Blaker, L.
Blatch, B.
Borthwick, L.
Brabazon of Tara, L.
Bradford, E.
Braine of Wheatley, L.
Brougham and Vaux, L.
Buckinghamshire, E.
Butterworth, L.
Cadman, L.
Caithness, E.
Campbell of Alloway, L.
Campbell of Croy, L.
Carnegy of Lour, B.
Carnock, L.
Chalker of Wallasey, B.
Chelmsford, V.
Chesham, L.
Clark of Kempston, L.
Colwyn, L.
Constantine of Stanmore, L.
Courtown, E.
Cranborne, V. [Lord Privy Seal.]
Cumberlege, B.
Dean of Harptree, L.
Denton of Wakefield, B.
Dixon-Smith, L.
Eccles, V.
Eden of Winton, L.
Ferrers, E.
Flather, B.
Fraser of Carmyllie, L.
Geddes, L.
Goold, L.
Goschen, V.
Gowrie, E.
Gray of Contin, L.
Gridley, L.
Hailsham of Saint Marylebone, L.
Hambro, L.
Harding of Petherton, L.
Hardinge of Penshurst, L.
Harmar-Nicholls, L.
Hayhoe, L.
Hemphill, L.
Henley, L.
Hives, L.
Hogg, B.
Holderness, L.
HolmPatrick, L.
Hothfield, L.
Howe of Aberavon, L.
Howe, E.
Inglewood, L. [Teller.]
Ironside, L.
Jenkin of Roding, L.
Kenilworth, L.
Kingsland, L.
Leigh, L.
Lindsay, E.
Lindsey and Abingdon, E.
Long, V.
Lucas of Chilworth, L.
Lucas, L.
Mackay of Ardbrecknish, L.
Mackay of Clashfern, L. [Lord Chancellor.]
Mancroft, L.
Marlesford, L.
Massereene and Ferrard, V.
McColl of Dulwich, L.
Merrivale, L.
Mersey, V.
Miller of Hendon, B.
Milverton, L.
Monk Bretton, L.
Moore of Lower Marsh, L.
Mottistone, L.
Mountevans, L.
Mowbray and Stourton, L.
Moyne, L.
Murton of Lindisfarne, L.
Norrie, L.
Northesk, E.
Orkney, E.
Oxfuird, V.
Parkinson, L.
Perry of Southwark, B.
Platt of Writtle, B.
Plummer of St. Marylebone, L.
Quinton, L.
Rankeillour, L.
Rees, L.
Renton, L.
Rodger of Earlsferry, L.
Rodney, L.
Sanderson of Bowden, L.
Seccombe, B.
Selborne, E.
Shaw of Northstead, L.
Sheppard of Didgemere, L.
Skelmersdale, L.
Soulsby of Swaffham Prior, L.
Stewartby, L.
Stockton, E.
Strathclyde, L. [Teller.]
Sudeley, L.
Teviot, L.
Thatcher, B.
Thomas of Gwydir, L.
Trefgarne, L.
Trumpington, B.
Tugendhat, L.
Ullswater, V.
Wade of Chorlton, L.
Wakeham, L.
Walker of Worcester, L.
Wise, L.
Wynford, L.
Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

21 Feb 1995 : Column 1088

6.33 p.m.

[Amendments Nos. 191C and 191D not moved.]

Clause 131 [Extension of scope of right to cash equivalent]:

Baroness Turner of Camden moved Amendment No. 191E:


Page 82, leave out lines 15 to 18.

The noble Baroness said: I am sure that the Minister will be glad to know, after a somewhat harrowing debate, that these are genuine probing amendments. They are concerned with the clauses in the Bill that relate to the scope and right to guarantee cash equivalents.

The first amendment is a probing amendment in that it seeks clarification of the circumstances in which the Government envisage using the power to exclude certain final salary schemes from the obligation to pay transfer values in respect of deferred members whose service terminated prior to 1986. In principle, all scheme members should be entitled to transfer any benefit, and it is up to the Government to justify any need for exceptions.

The Government may argue that in some circumstances it would constitute retrospective legislation to give such a right where the benefit accrued prior to the date on which transfers became obligatory. But the restriction applies only to members who left service prior to 1986 and not in all pre-1986 benefits. Thus, if exceptions are to be permitted, it will mean that a member with a benefit based on 10 years' accrual who left on 31st December 1985 would not be entitled to a transfer, while if he or she had left two days later they would be. This really does seem unfair, and also unnecessary now.

The second amendment with which this one is grouped, refers to "the prescribed period". Clause 132 relates to the right of a statement of entitlement for members of schemes. It stipulates that within a prescribed period a member should be entitled to a

21 Feb 1995 : Column 1089

statement of entitlement. We seek to delete "the prescribed period" and insert "one month". As I said earlier, this is a probing amendment seeking a statement from the Government on what period they intend to prescribe within which the guarantee date must be set.

In practice, there is no good reason why any well managed scheme should not be in a position to quote a transfer value as at a date within a month of when a member makes application. Unfortunately, more than a few schemes have an evident inability to meet such deadlines. But that may very well be due to poor administration on their part. As a member of the OPAS council, I must say that a frequent complaint received from scheme members is that they have to wait far too long to be notified of transfer values. I see no reason why "one month" should not be inserted as the requirement in this clause. Again, perhaps the Government will tell us what they mean by "the prescribed period".

The third amendment in this grouping relates to the manner and calculation of transfer values. The amendment seeks to retain the existing basis for the calculation of cash equivalent for transfers out of final salary schemes. It simply puts into primary legislation the wording which I understand appears in the current actuarial guidance note, issued in accordance with regulations, which determines how actuaries are required to calculate cash equivalents.

It seems that the Government, and perhaps some people in the actuarial profession, want to see the basis of calculating cash equivalents changed to one that is less secure. In particular, it is being suggested that the calculation should not be based on gilt yields, as at present and as stated in the proposed amendment, but should instead allow for equity yields, particularly in respect of younger members. That could mean a substantial reduction in the security that is involved, since, as we know, the benefits which such people may receive under a new basis will have to depend on the vagaries and risks of the Stock Exchange; and there could be only an even chance that they would receive their accrued benefits. Given the normal ups and downs in equity values, it can be assumed that part of the time they may well end up being worse off than can be guaranteed under the existing system.

As I said at the outset, all three are probing amendments. We want to know where the Government stand; why they have put this wording into the legislation; and whether they will accept the manner of calculation that is proposed in the final amendment to which I have just spoken. I beg to move.


Next Section Back to Table of Contents Lords Hansard Home Page