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Lord McIntosh of Haringey: The noble Earl, Lord Russell, has compared the Lord Chancellor to Cleopatra. I suggest that there is another comparison with her:


Baroness Hollis of Heigham: I am sure that I am speaking for the co-signatories to these amendments; namely, the noble Baroness, Lady O'Cathain, the noble and learned Lord, Lord Simon of Glaisdale, and the noble Earl, Lord Russell, who at very short notice--and I am very grateful--stood in for the noble Baroness, Lady Seear. I am sure that I speak for everyone in expressing gratitude to the speakers this afternoon. I believe about 13 Members of the Committee

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contributed speeches and about another half-a-dozen additional speakers contributed with interventions. I believe that there was not one speaker who spoke directly, or by intervention, who did not support the principle of these amendments. The whole Committee has spoken today and it is saying to the Lord Chancellor, "We believe that the principle of these amendments is right". The precise wording may not be right and no one is going to the stake about that. We are asking the noble and learned Lord today to take these amendments away and to come back with government amendments, if they should be more satisfactory, which embody the voice with which the Committee has spoken today.

The Chamber has spoken today in a way which I have never heard before regarding pensions Bills or anything else of that kind. However, it would be wrong not to try to address some of the issues that the noble and learned Lord the Lord Chancellor raised in his remarks. He said that the amendments may be flawed and I entirely accept that. I am happy to withdraw them. They come with the full support and drafting of the National Association of Pension Funds and the Law Society. If the drafting is incomplete, so be it, but that is not an issue or a problem for us.

I shall try to address the issue, which I believe is the only one the Lord Chancellor raised; namely, that somehow this amendment would be an incentive to divorce. The Committee will note that the Lord Chancellor did not challenge at any point what I call the Treasury argument--that is to say, the cost would be balanced out for the public Exchequer because the savings on income support would offset the costs to tax revenue: it is between the couples concerned.

I have two points to make. Almost everybody, and certainly women, are poorer after divorce. People do not divorce to get rich: they are almost always poorer after divorce. We are saying that they should not be penalised by financial arrangements and locked into an unhappy marriage when all of us would respect and recognise the fact that it is time to make a clean break. Let us consider a married couple. If they were to divorce, following these amendments, they could split their pensions, but they would only be better off if they came to live together, having separate pension provision. The mind boggles at people in their late fifties or sixties getting divorced and then coming together again in their sixties to enjoy the tax privileges that they had so carefully arranged 10 to 15 years ago when they were divorced. I do not recognise that world and I do not believe the Committee does, either. If there is a problem in this area we can certainly look at it in terms of the issue of lump sums and so on. At the moment the Law Society says that financial arrangements are such that people offset the lump sums against the tax revenues.

I do not believe that the Lord Chancellor himself believes he is right. All governments have conceded this matter in one basic respect; namely, in the state old-age pension. That costs nearly £30 billion a year and represents £59 to a married man and £35 to his wife on his contributions. They get divorced and he continues to receive £59 a week on his contributions and she gets £59 a week on his contributions. The state recognises in its own pension scheme that in order to avoid poverty

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in old age different financial arrangements have to be made after divorce than in marriage because two households cost more than one. The state recognises that with its own pension scheme. Why is that justice denied to people whose main income derives from occupational pension schemes? The Government have already conceded this issue in its own scheme. They should not now deny the chance for similar justice to pension schemes.

The noble and learned Lord the Lord Chancellor then went on to talk about taking away the non-assignability of pensions. This is what this amendment will do and is precisely what it is intended to do, but only to assign it to one person and one person only; that is, the previous spouse or, to follow my noble friend, a second spouse or whatever at the point of divorce.

The reason that pensions were non-assignable in the first place and were privileged by means of tax concessions was because it is in the state's public interest to ensure that no one willingly has poverty in old age. Those tax privileges were meant to apply to personal pensions and the like as an encouragement to people to save for their old age. Tax concessions were made available so that they could do so but they were non-assignable so that they could not be used by creditors, for example. That was the purpose of the concessions; to make them non-assignable to pay off debt because it was not in the public interest to have the taxpayer helping somebody to have their debts paid off cheaply. It was not about marriage but about that.

Within marriage you do not need to assign a pension; it is matrimonial property for the two of you. The injustice arises only at and after divorce. That is why in that issue and instance, and only then, do we need the possibility of a pension being split. It is for no other reason than to remedy an injustice. All the other reasons to make it non-assignable--to aid creditors, mortgages, and what you will--would remain. Simply in this one situation would it be assignable, to rectify a grievous wrong. It would only be necessary at the point of divorce. And so the argument that it cannot be done in marriage falls because it does not need to be done in marriage, and that is why we are not asking for it.

The noble and learned Lord the Lord Chancellor said at the end that he thought this was fair. He admitted, if I may say so, that his objections were technical only. He was responding and giving us the benefit of a brief. Those technical objections can and must be met.

5 p.m.

The Lord Chancellor: I made it plain, I hope, that there are technical difficulties to be dealt with. The point I was making on the main matter is one of principle that your Lordships should understand. That is what I was seeking to do on that point. I will leave it at that. I am not suggesting that that of itself is any more than something that your Lordships should have in mind in considering this amendment. As I said, I am very happy to consider it further. Other details such as

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non-assignability attaching to the benefits for the wife have to be considered, because I do not think that is clearly protected under the present arrangement.

Baroness Hollis of Heigham: I entirely accept that. I was about to say that I think we have addressed the financial arguments produced by the Treasury to suggest that there is no cost for the taxpayer in supporting these amendments. The noble and learned Lord the Lord Chancellor has produced some technical difficulties, which certainly exist--no one would suggest otherwise--but we all know that they can be overcome.

The third set of arguments brought forward by the noble and learned Lord were that, by definition, the proposals appear to accord privilege to divorce over marriage. I am suggesting that the situation after divorce is very different from the situation in marriage itself. Injustices occur at the moment and this would help to rectify them. The Government themselves have recognised this in their own handling of the state old age pension.

I am sure that the noble and learned Lord has taken the opinion and view of the entire Committee this afternoon. I know that he had, if I may so put it, a set of arguments which he felt it important for the Committee to hear. However, I am convinced that the noble and learned Lord knows and believes that what the Committee has been arguing today is the right thing to do. We can do it on this Bill and we can do it without cost to the Exchequer and we can do it now. With the assurance of the Lord Chancellor that he will take this away and think sympathetically--I think that was his word--about this, I am delighted to ask him to do precisely that on behalf of all of us. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 14 shall stand part of the Bill?

Lord Coleraine: I should like to speak to the central position which would arise under Clause 14 of the Bill, the thrust of which I generally support. The main object of Schedule 2 which is to be introduced by Clause 14 is to provide that in the case of divorce or separation an order about financial provision may be made under the 1973 Act before a divorce order or a separation order is made. It would obviously be inconsistent with the whole thrust of the Bill and mediation, together with the period for reflection and consideration, were the existing law to be continued into this new Bill. Under the existing law, orders for financial provision and property adjustment may be made only at the time of the decree nisi and can only take effect on the decree absolute being made. The noble Lord, Lord Clifford of Chudleigh, has two amendments tabled for discussion later, Nos. 197A and 197B, and it might well be that he will wish to address points covered by those amendments at the same time, because they cover the same ground as do the points I am going to make.

Clearly the existing law cannot continue. We must have some way of making it possible to go to court during the period of reflection and consideration. This should not be deferred until the divorce is over; but the

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effect of the amendments made to the 1973 Act under this Bill would be to make it possible for a divorcing party to apply to the court for financial provision and for the application to be heard very soon after the statement of breakdown has been made to the court, very soon after the moment when the one year for reflection and consideration starts.

The effect of this would be to destroy all hope of reconciliation were a party to start straight off by going to court, because he or she might get the order made very soon afterwards and would find himself the beneficiary of a financial provision or property adjustment order which would completely destroy any confidence on the part of either party that there was any possibility of reconciliation. It would also completely short-circuit any possibility of mediation taking place. I am only here this afternoon to draw attention to the problem and to suggest one or two ways in which this position might be rectified.

One way would be to say that an order might be made as soon as the divorce proceedings were started but only brought into effect after the divorce when the application is made a year later. I would not for a moment support this approach because once the order has been made, whether we like it or not, the marriage will effectively be at an end and there would be no possibility of picking up the pieces later. It seems to me at the moment that the only way to resolve the problem is to provide for a date during the period for reflection and consideration during which there may be no application to a court for a court order. My own feeling is that it might be possible to say that there should be no application to a court before six months, or even nine months, of the year were up.

This would have the additional beneficial effect in that it would strengthen the period of reflection, because there would be a period during which the parties engaging in the divorce would not be able to go to court and would have to consider seriously either reconciliation or settling their differences by mediation. I believe that all those who favour fostering mediation in divorce proceedings, as I do, would recognise that this procedure would be beneficial.

There have been suggestions from time to time that there might be a compulsory period, set off during the early stages of the year, in which nothing could be done except attempts to reconcile. I do not favour that because I feel that reconciliation and mediation must be able to go hand in hand throughout the whole of the period. The effect of providing a period during which the application to the court may be made would have very much the same effect and be extremely beneficial. I hope the ideas that I am presently canvassing may be seen by the Committee to be good.


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