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Lord Meston: My Lords, I thank in particular the noble and learned Lord, Lord Simon of Glaisdale, for his support. I am sure that he at least will know that for many of us the weekend comprises two rather long working days. I would have liked to have brought the amendment to the House at an earlier stage, but it was necessary to see how matters developed in relation to pensions on divorce before deciding whether, and to what extent, it might be necessary to do so.

There is much to be said for the argument advanced by the noble and learned Lord for an altogether more robust and straightforward power to deal with pensions on divorce. Unfortunately, the Government have avoided that, and I respectfully agree with what the noble and learned Lord said about the effect of the amendments which have been accepted. My view, for what it is worth, is that they do little more than add some emphasis to the existing law.

In response to the remarks made by the noble Baroness, Lady Young, I feel obliged to spring to the defence of the legal profession. We all know what the law can do and we all know its shortcomings. However, as a number of research documents have revealed, in many cases the existing law does not allow the courts to do what they would want to do. That is not a shortcoming of the legal profession but a shortcoming of the existing legal framework. That was recognised by those with considerable expertise; that is, members of the committee of the PMI which dealt with the matter. Those experts, dealing with English and Scottish law, recognised the shortcomings in those jurisdictions.

As things stand, practitioners must try hard to deal as best they can with the disparities in pension positions on divorce. It is not always possible to do so. Of course, it is sometimes possible to make requests or nominations to the trustees of a pension fund, which may or may not be honoured. The amendment is designed to deal with the cases in which the other party is not prepared to make a request or where the trustees are not prepared to indicate their response to such a request when the time comes. For that reason the PMI recommended the practical alternatives, which I have endeavoured to set out in the amendment.

Of course the court will have a discretion. Of course the court will not simply impose an obligation on a party to take out extremely expensive insurance or impose an obligation when it is unlikely that the individual concerned will be insured. The court will retain a discretion and will make an informed decision based on a knowledge of the likely costs and the practicalities of insuring the individual concerned. There is no question of unreasonable compulsion in this situation. With reference to what was said by the noble Baroness, Lady

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Young, this is by no means a new issue. It may be a new issue in the context of the Bill but it was canvassed thoroughly in the PMI report. Perhaps it is unfortunate that the Government have only now indicated what they perceive to be practical difficulties.

I believe that it is a serious and reasonable proposal and will allow the question of the loss of pension rights and benefits to be dealt with efficiently and relatively painlessly; in many cases as it is presently done by agreement rather than by any measure of compulsion.

The Minister said that we can proceed only one step at a time. I had hoped that this short extra step could have been taken in the passage of the Bill through your Lordships' House. Evidently, that will not be possible and perhaps it must be taken in a more robust way when we consider a wider programme of divorce law reform. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

An amendment (privilege) made.

7.15 p.m.

Lord Mackay of Ardbrecknish: My Lords, I beg to move that the Bill do now pass. Perhaps I may say a few words at the end of a long period during which we have considered the Bill. We have examined it in detail in Committee, on Report and again today on Third Reading.

Many of your Lordships have taken part in our debates but perhaps I can extend particular thanks to those of your Lordships who have been season-ticket holders for these proceedings. They have participated in our deliberations, often late at night, and become immersed in some of the fearsome complexities which can arise on pensions. So perhaps I may give particular thanks to the noble Baronesses, Lady Hollis, Lady Turner, Lady Dean and Lady Seear. On occasions I felt a little like John Knox before he wrote a certain pamphlet. I also give particular thanks to the noble Lords, Lord Eatwell, Lord Haskel, Lord Monkswell and Lord Ezra, and to my noble friends Lord Dean of Harptree and Lord Buckinghamshire.

On, or rather at, my own side, I would particularly like to extend my thanks to my noble friend Lord Lucas, who has moved most of the amendments standing in my name and generally given me great support during our debates. I also place on record our thanks to the bodies which together constitute the Joint Working Group on Occupational Pension Schemes and all the many other organisations which have been involved off-stage. We have not always agreed with all the points that have been made but we do value their contributions. We place great importance on the role of these organisations and on the effective consultation which we have been able to enjoy. This is essential to make these complex provisions work and we shall be consulting further on the detailed regulation-making powers and the way in which they will be applied.

I give special thanks to my officials, not only those who have been here as season-ticket holders but also to all those behind the scenes. A complicated and lengthy

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Bill such as this one requires many, many weeks of dedicated work and a rapid immersion course on some very complex issues. I am grateful for their patience in explaining these matters to me and in explaining all the, sometimes, ingenious amendments put down by your Lordships. I am sure that I can also thank them on behalf of those of your Lordships who met me and the team to discuss various aspects of this Bill.

As I said on Second Reading, this Bill is a major piece of legislation which will set the framework for pensions provision well into the next century. It is in everyone's interest to make sure that it achieves our aims of providing security, equality and choice in pensions and, in this way, encourage people to make their own provision for their retirement.

During our debates, we have listened carefully to various concerns expressed by your Lordships and I hope that I have been able to explain and clarify our intentions. We have also been able to make a number of useful amendments to the Bill and I have made commitments to revisit some of the points of concern. I shall make sure that the commitments I have given are fully honoured in another place.

I was particularly happy to be able to accept the amendment put forward by the noble Baroness, Lady Seear, about the selection of the members of the pensions compensation board. This improved the Bill and also gave the noble Baroness such obvious pleasure in having an amendment accepted after, as she said, 24 years in this House. I am not sure whether that was the champagne moment in our deliberations.

We have, I believe, made one very significant addition to the Bill in the new clause moved so ably by my noble friend Lady Young. My noble friend led a number of your Lordships in the successful effort to persuade my noble and learned fellow clansman the Lord Chancellor and me of the need to take action to help women (and occasionally men) on divorce. I have no wish to rehearse the arguments but I am confident that in future courts in England and Wales will use the powers that we have given them to deal justly with both parties to divorce on the matter of pensions. My noble friend deserves not only our congratulations but also those of the many women who will benefit from this provision. I am sure my noble friend will not mind me saying that the noble Baroness, Lady Hollis, played her part in arguing for these changes.

We also debated a number of other issues which were not originally included in the Bill but which are clearly of great concern to your Lordships. They were pressed skilfully and with great determination and, in some cases, despite my sage advice to the contrary.

It has been very clear that, as regards the main components of the Bill, we are all pulling in the same direction, irrespective of where we sit in your Lordships' House. So while we have not been able to agree on everything that we have discussed, I believe that we are generally trying to achieve much the same thing. We can all take satisfaction from the constructive way in which we have been able to debate these issues over many hours and the significant measure of agreement that we have been able to achieve. That was sometimes lost by those who watched the debates

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because they saw us bring into the public domain only those parts of the Bill about which we disagreed. I commend the Bill to the House.

Baroness Hollis of Heigham: My Lords, when we discussed the Bill on Second Reading, we felt that we were perhaps discussing three Bills in one: first, in the light of Maxwell, to deliver a pension promise to protect occupational pensions from insolvency and fraud. We sympathised with its purposes but doubted whether the promise would be fully delivered.

The second Bill aimed to equalise the state pension age. In that regard, we sought to persuade the Minister to support a flexible decade in order to offer better protection to women. We recognised also that woven throughout the Bill was a third shadowy Bill. That is the Bill that we do not not really know about because it is in the back pocket of the Secretary of State—a Bill of regulations. We sought to bring that into the light.

Looking back, we failed to spell out and strengthen the role of the regulator and to give it state funding. We failed to separate advisers to both employers and the trustees and, despite the persuasive arguments of my noble friend Lady Dean and the noble Earl, Lord Buckinghamshire, to make mandatory the independent custody of assets. We are sure that the Government were wrong on both of those issues.

No one doubts that the Bill is much better than nothing but it is still not enough and on many of the issues, the jury is still out.

As regards trustees, many of us are convinced that the Government have short-changed member trustees. They refused not only to increase the percentage for defined benefit schemes but, notoriously and contrary to Goode, they refused to increase their numbers on money purchase schemes. They refused also to add a pensioner representative as of right, despite the urging of the noble Baroness, Lady Seear.

Many employee trustees may still be vulnerable to an impressive employer. They are still vulnerable to unfair balloting procedures and, despite the urgent pressure from my noble friend Lady Turner, in some cases they are still vulnerable to the problem of unfair dismissal. In that sense, it remains an employers' Bill.

As regards protecting pension schemes not from fraud but from insolvency, some of our worries have grown as the Bill has progressed and as employers' organisations have lobbied, in some cases all too successfully, to reduce the solvency standard. That is now a funding standard but it is one standard that is asked to carry two disparate functions: that of the ongoing nature of the scheme; and that of winding-up. In some of the most significant speeches in the course of the Bill, my noble friend Lord Eatwell alerted us to the need to uncouple those functions, while my noble friend Lord Haskel sought to set the responsibility of fund managers in the wider context of corporate governance. I am sure that that issue will occupy the Government in the months to come.

The second Bill within the Bill dealt with the equalisation of the state pension age and the position of women in SERPS. Although we did not persuade the Government of the merits of the flexible decade, at least

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in relation to SERPS we ensured that women who worked five years longer would not necessarily suffer a lower pension as a result. The 44 best years amendment, which aligned SERPS with the national insurance rules, was of course to the gain of women and lower paid men.

My noble friend Lady Gould tried to persuade the Government to reform HRPs. My noble friends Lady Lockwood and Lord Monkswell tried to persuade the Government as to the benefits of alternative and more flexible retirement dates. My noble friend Lady Turner continued to remind the House of the importance for women both of SERPS and the GMP.

In the course of the debates, we teased out from the Minister the department's reading of European judgments as they affect the Bill.

The third Bill within the Bill dealt with the hidden regulations which, with the help in particular of the noble and learned Lord, Lord Simon, and the noble Lord, Lord Peyton, we did something to bring that into the light, as the Government have agreed to offer the affirmative procedure where the scrutiny committee drew attention to procedural problems. We can only hope that the luxurious abundance of regulatory powers which are left to the Secretary of State will come splendidly into use on the next change of government.

As the Financial Times rather plaintively complained, the Bill addressed issues which not all of us had foreseen as far back as last Christmas would take the prominence that they did; particularly important were pensions and divorce and war widows although, sadly, not those in residential care. Never has the phrase at the start of the Bill:

    "About pensions and for other connected purposes",

been used so vigorously and with such intent.

We are all delighted with the success of the noble Lord, Lord Freyberg, on the Cross-Benches, who remedied an injustice to war widows. Like the Minister, I too wish to congratulate the noble Baroness, Lady Young, on spearheading a gallant and successful effort to reform some of the issues associated with pension laws on divorce. In consequence, the courts will now have the option to earmark as well as to offset pension assets in relation to matrimonial property. I very much hope that the Minister and the Bill team will now tidy up some of the loose ends which undoubtedly remain—for example, the situation of a former wife after the death of her husband—perhaps by completing the move towards pension splitting. But of course, that is for the other place.

I was especially pleased that after that victory, which was worked for on all sides of the House, so many noble Lords who were on the losing side that day made it clear that they felt that the House of Lords had perhaps reached the right decision, despite their position on the vote. We hope that the pension industry and the good sense of the department and its team will combine to do what we all know to be right, decent and sensible on those issues.

The amendment which I feel most sad about losing was the amendment moved in relation to residential care. We made a last effort on that today. I am sorry that it turned into a rather acrimonious debate but I am

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sure that we all recognise that there are real problems to be addressed. They can be addressed only by the three relevant departments working together closely and harmoniously. We hope that that will be done in the other place.

I turn now to the most agreeable part of the speech on this Motion; namely, to express our thank-yous. First, like the Minister, I wish to thank those organisations outside the House led by the TUC, the NAPF and the Law Society as well as many individual lawyers and actuaries who have helped my noble friends and I. I wish to thank also the pressure group organisations such as the Alzheimer's Disease Society, Age Concern and Fair Shares, which is a new pressure group that has helped enormously to highlight the issues of pensions on divorce.

The second thank-you, which is perhaps less customary, is expressed to those newspaper journalists, often women and often editing the personal and financial pages of the quality press, who have reported so many of our debates, especially on pensions on divorce, with such style, attention and accuracy. They did much to focus our minds and, perhaps at least as important, to focus our votes. I am grateful to them.

Thirdly, we thank the Minister who was almost always courteous and almost always well-informed and good humoured, except when he was not. Nevertheless, it is the view around the House that on this Bill, we were lucky to have him. I pay special tribute to the way in which he was kind enough to arrange departmental briefings with his staff which proved to be always helpful and even on some occasions useful. They were much appreciated. We had our allies and colleagues on all sides of the House; for example, the noble Baroness, Lady Seear, and the noble Lord, Lord Ezra, on the Liberal Benches. Their staunch good sense and very real experience cut through so many of the issues for us. From the Cross Benches and Conservative Benches we had the steady voices of those noble Lords such as the noble Lord, Lord Boyd-Carpenter.

I am sure that your Lordships will not be surprised that I wish to conclude by giving special thanks to those on the Front Bench on this side of the House. Their personal expertise was, in my view, unrivalled. My noble friends Lady Turner and Lady Dean are both former members of the Occupational Pensions Board. They dealt with issues of regulation and trusteeship to which they brought unrivalled, personal knowledge. My noble friend Lord Haskel raised the key issues of corporate governance within which the Bill is embedded. My noble friends Lady Lockwood and Lady Gould dealt with issues of which they have special and relevant experience; that is, issues relating to women and equal opportunities and the issues raised by the Fawcett Society.

Throughout the proceedings on the Bill we have had the sturdy support of my noble friend Lord Monkswell and, as I believe almost everyone has recognised, my noble friend Lord Eatwell has contributed significant and magnificent speeches on solvency which have taken the debate very much further forward. The skill of my noble friend Lord McIntosh in addressing the

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Government's amendments proved invaluable in picking them up on some of the points that they were trying to make. In my, admittedly, relatively short time in your Lordships' House, I cannot remember a Bill where so much knowledge, experience and expertise has lain in the membership of the House on such an extensive, significant but nonetheless technically very difficult Bill. I owe everyone my deep gratitude.

I believe that we now leave behind with pleasure the word "balance"—indeed, may it never cross our lips again for at least a month—and the phrase "level playing field" which I personally vow not to use for at least the next fortnight. We now pass the baton on to the other place. I can assure the Minister that he has heard nothing yet.

7.30 p.m.

Baroness Seear: My Lords, in supporting what has been said, I shall be very brief. That is partly because a great deal has already been said and partly because, as must be all too plain to your Lordships, I have very little voice left with which to say anything. No doubt that will be a great relief to the Minister.

I shall start at the bad end. I must say that, in some ways, the process has been something of a disappointment. After all, we have been dealing with a pension Bill. Of course, there have been some useful gains; but, on the main points of the Bill, I remain unconvinced that it will carry out the job that it sets out to do. We on these Benches have stressed the inadequacy of the regulator. The fact that the Government were not even prepared to put down a statement as to what the authority was supposed to do was a bad start. In our view, the powers of the regulator are inadequate and insufficient. Reliance on whistle blowing is not the right way to approach the subject. As the Bill is meant to be a safeguard to pensions and the regulator is meant to be the major instrument for that safeguarding, it is sad that the legislation leaves this House in as feeble a state as, in our view, it does.

However, having said that, there have been most satisfactory successes. It is so long ago that I had in fact forgotten about my triumph until the noble Lord kindly reminded me. I must admit that that cheered me up no end. I just hope that the Government will not allow that as well as the other successes—for example, as regards war widows and pensions after divorce—to be destroyed when the Bill reaches another place. It would be very sad indeed if, after such all-party support and all the effort that has gone into it, such changes were reversed in another place. I very much hope that that will not happen. They are satisfactory changes that we have been able to secure.

In some ways, it has been an extremely interesting Bill and a very agreeable Bill on which to work. I say that because during the proceedings most of us forgot party alignments; indeed, we have been working across parties, trying to reach good solutions to immensely difficult problems. It demonstrates again that when party issues are at a low level and when interest in the topic and the desire to find the right solution comes

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uppermost, your Lordships' House operates at its very best. To that extent, it has certainly been an enjoyable experience.

I should also like to thank the Minister. I am aware that the noble Lord was confronted with, as he remarked, a monstrous regiment of women and that it was pretty tough for him, especially with the Scottish tradition. I could not resist that. Indeed, he found it pretty heavy going, to put it mildly. However, on the whole, the Minister stood up to the feminine opposition pretty well. But, more seriously, we are most grateful to the Minister for the time he gave us by arranging separate interviews of long duration to deal with questions we raised and also for giving us access on those occasions to his expert advisers. It is a great problem for the Opposition that we have so little opportunity to receive such advice. Moreover, not all of us are financed in such a way that we can buy the advice from outside. Therefore, the Minister's efforts to ensure that we got that advice and to make time himself to see us and discuss matters is something for which we on these Benches are most grateful. I hope that that is a good precedent for future Bills.

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