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Baroness Seear: My Lords, I want briefly but warmly to support the amendment. I shall not go into the details. That has been done excellently by previous speakers. In many ways this seems to me to be quite a simple issue of justice, although it is easy to find all kinds of complexities in it. It is surely only simple justice that a woman who has been married to a man for 20 or 30 years, has looked after him while he built up his career, not having been able to build up her own career, and has thereby contributed to the salary and consequently the pension that he earns, should have a share of that pension. If she is to have a share of that pension, surely it should be arranged and finished with as an agreement at the time of the divorce.

To wait until the ex-husband draws his pension brings into the matter a great deal of uncertainty. It also brings with it the likelihood that, at the time the pension becomes available, the ex-wife will have to deal with her former husband. That is not a satisfactory way to deal with the issue.

I do not wish to sound frivolous about what is a very serious subject but, as my noble friend Lord Meston said, if it is known to the second wife that the first wife is receiving payments direct from her then husband, it will prove enough to drive him into the arms of a third wife. I hope I have understood my noble friend correctly. The couple want a clean break. They want to be rid of all dealings with each other. To have to come back at the time of the pension to establish and argue about the right to the pension is surely a most unseemly way of dealing with the matter.

Of course, we shall be told by the Government--it is the only argument that they can put up against the proposal--that it will cost money. I have not done the arithmetic in the detailed way that it was done by the noble Baroness, Lady Hollis. I am sure that her arithmetic is better than mine. But that is not the point. This is a matter of decency, justice and honour. Is it too much to pay? Whatever the sum, it cannot be very large. Yes, I can tell exactly what the noble Lord opposite will say: that, if he had that money, he could think of many better ways of spending it. Maybe he can do that. But many people believe that an honourable settlement at this point is worth a certain amount of money.

Lord Haskel: My Lords, I support what the noble Baroness, Lady O'Cathain, said about the business community. I agree with her. I believe that most employers would support the amendment. Sadly, divorce is so prevalent nowadays that employers regularly come up against this matter. They become involved not only as employers but also as contributors to the pension scheme.

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They would prefer to see a clean break, for two practical reasons. First, it reduces the pressure of a divorce on the employee, pressure which undermines the performance of the employee. Employers have a natural interest in ensuring that performance is not reduced. Secondly, an employer does not want to become involved in any possible future dispute over the pension in the case of earmarking. Pension splitting satisfies both those points. It also satisfies the needs of both parties.

There is little problem in calculating the split because the calculation and the administration are very similar to those used when dealing with leavers' benefits. Employers do it all the time. A formula is well established. People come and go in companies all the time. It is relatively easy and it can be taken care of by the company secretary or the firm which manages the company's pension scheme. I do not see any practical reason standing in the way of this proposal. I am sure that most employers would join me in supporting the amendment.

Lord Simon of Glaisdale: My Lords, my name is to the second amendment in this group but I spoke also to the first amendment in Committee. I need not repeat what I said.

This provision is an act of simple justice. It was supported in all parts of the Committee, including two Ministers from the pensions department, one of whom had been head of that department. I said that it is an act of simple justice. In the ordinary way, a wife makes sacrifices during the early years of the marriage, freeing the husband to pursue his economic advancement. In the ordinary way, he shares the emoluments, as he should in justice, with the wife who has enabled him to earn them.

But today, in many cases--perhaps the majority of cases--the emolument, or part of it, is postponed until either after the husband has retired or after the husband's death to be paid to his widow. It is utterly unjust to enable the husband to take that pension away from the wife who has enabled him to earn it and bestow it on some other woman who has found greater favour in his eyes. As I say, it is an act of simple justice.

Since our debate in Committee, those of us who spoke in favour of the amendment received a three-page letter from the Department of Social Security. Those three pages could have been encapsulated into one sentence: "We prefer that this difficult problem be postponed until after the election and if possible to the Greek calends".

Most of us, with shame, have at times signed stonewalling letters. I cannot remember ever having signed or received so palpable an example of stonewalling as the letter we have just received. It would do credit to the great stonewallers of the past like Barlow or J.W.H.T. Douglas.

It is not pretended that the amendment will cost any money for a generation. However, it is now claimed that the matter must be postponed until it can be further considered. This matter arose clearly when the Divorce Reform Act 1969 was before Parliament. Nothing was then done about pensions, though the matter was raised. It was canvassed again last Session on the Pensions Bill.

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Again, nothing was done in the way of setting up a consultation process. Why not? Because on both occasions there was a majority for the Government which could be whipped. This time there is not. A free vote has been promised and therefore there is every incentive to try to push off a decision which justice demands until after the Bill is out of the way, and if possible forever.

That brings me to my last point: the free vote. It was promised on any matter of conscience under the Bill. This is pre-eminently a matter of conscience. I trust that there has been no sort of Whip, even unofficially, on the amendment. Indeed, I trust that it has been made plain to every government supporter than he can exercise his conscience with perfect freedom and do what justice demands. I support the amendment.

4 p.m.

The Earl of Clanwilliam: My Lords, perhaps I can ask a question of those who are promoting the amendment. It is clear that everybody has spoken from the angle of the businessman, which presumably means that everyone is talking about occupational pensions. To split occupational pensions is something with which one has great sympathy and it is relatively simple. But if we are to have justice, it must be justice for all.

Those who have personal pensions will be badly affected by the amendment. A young couple who will probably divorce in their 30s may only have started their pension plan a few years earlier. There will be nothing in the plan to split and the wife will receive no future benefit at all. That is a great injustice. There are 3 million personal pensions throughout the country and they too should be considered. For that reason I suggest that we take my noble friend's advice and wait for the Green Paper.

Lord Marsh: My Lords, I have great respect for my noble and learned friend Lord Simon of Glaisdale and I seldom challenge his judgment on anything. At this stage--I may well be proven wrong--if he believes that the Whips will not be involved in this amendment, I can only say mazeltov to him. The number of people in the building this afternoon at 1.15, in every conceivable eating spot available, amazed me and is a tribute to their concern for social issues.

I too received a letter from the noble Lord and was grateful for it. It was a remarkable letter. It raises four pages of extremely serious issues. I read it with growing surprise and consternation. When I received it and read it yesterday morning--this is not intended to be churlish--I suddenly thought: "These are major issues. I am interested in this subject and there is not a cat's chance in hell of doing any research into any of the issues raised".

I felt that the Government had made a mistake. They were obviously committing themselves to kicking this issue into touch on the basis of a whole pile of major arguments about which they had never thought before. The picture they give is of a number of serious issues--some more serious than others. One that is raised now and again is of the happily married couple, one of whom, at the conclusion of tonight's debate if we are

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successful, will go home and say to his spouse, "Fantastic. They have done it. We can split the pension later on. I have seen George and he said that he can get us a quick divorce and we can reduce the marginal tax rate by 10 per cent.". I am sure the eyes of the spouse will light up at the prospect. The fact is that that is a piece of fantasy.

There are other areas also to be considered. It is said, for example, that there will be great anger among people who are married when they see those who divorce optimising their tax situation. There are many ways in which married couples can optimise their tax situation. If they have a portfolio of investments, they can optimise their tax situation; if they own a small holiday property which they can let out to rent, they can optimise their tax situation; if they have a small business and one of them (I have heard of MPs who do this) employs his wife as a secretary, they can optimise their tax position.


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