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Lord Higgins: I believe that I understand what the noble Baroness says. However, the husband gets a larger pension than the wife. If there is to be an equitable split, I am not quite sure why some adjustment is not made in that respect. Am I right in thinking that there is no provision whatever in the legislation now before us as far as concerns the basic state pension?

In order to speed up matters, perhaps I may turn to another relevant point. Clearly, we are here to legislate for the long term. It is intended that these provisions shall continue in perpetuity.

However, the debates that we had earlier referred to the fact that SERPS will be abolished and a second state pension will be introduced. What is the Government's thinking and will the schedule cover that point in the future? We are talking about a five-year time-scale, but I presume that the Government intend to legislate for the next 20 years or so.

10.15 p.m.

Baroness Hollis of Heigham: Very simply, it is the Government's intention that pension sharing should apply to all second pensions, including state second pensions. Even though they are unfunded like SERPS, they have an asset value. Stakeholder pensions, which are funded like other money-purchase schemes, will also be included. With the state single pension, the issue of pension sharing does not arise, because following divorce the spouses revert to the status of single persons.

Lord Higgins: I am now beginning to see the position more clearly and I hope that I am right in thinking that the Bill contains no provision as far as the state pension is concerned.

Baroness Hollis of Heigham: There does not need to be at this stage, because the state second pension does

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not exist. As and when legislation is introduced to set up the state second pension, it will contain appropriate clauses to cover the point if the Bill does not do so. The noble Lord pressed me on the Government's policy intent, which is that pension sharing should apply to all second-tier pensions, because they are part of the matrimonial domestic property of the family and both parties have contributed to it.

Lord Higgins: I am grateful to the Minister for clarifying that point which I clearly had not fully understood before. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 46 agreed to.

Schedule 6 agreed to.

Clauses 47 and 48 agreed to.

Lord Higgins moved Amendment No. 73A:


Before Clause 49, insert the following new clause--

COMPENSATION SCHEME FOR WIDOWS AND WIDOWERS NOT INFORMED OF PROSPECTIVE REDUCTION IN SERPS

(" .--(1) The Secretary of State shall by regulations establish a scheme to compensate persons who are widowed after 5th April 2000 and who have not been able to make alternative provision to make good the reduction in the additional pension then payable to them as a result of the enactment of section 19 of the Social Security Act 1986, because of the provision of inadequate or misleading information by the Department of Social Security.
(2) If no regulations are made under subsection (1) before 5th April 2000 then the Contributions and Benefits Act shall be amended in accordance with subsections (3) and (4).
(3) The following provisions shall cease to have effect--
(a) section 39(3);
(b) section 48C(3);
(c) section 51(3);
(d) in Schedule 5, paragraphs 4(3), 5A(3) and 6(4).
(4) The following words shall be omitted--
(a) in sections 48A(4)(b) and 48B(2)(b), "half of",
(b) in paragraph 5(2) of Schedule 5, "Where the husband dies before 6th April 2000",
(c) in paragraph 6(3) of that Schedule, "but before 6th April 2000".
(5) Regulations under this section shall be contained in a statutory instrument which shall be laid in draft before, and subject to approval by resolution of, each House of Parliament.")

The noble Lord said: We change gear rapidly now from a series of amendments on pension sharing, which were very complex, to Amendment No. 73A on the issue of SERPS, which has attracted much public attention.

The history of the matter is well rehearsed: way back in 1986, the then Government decided that it would not be appropriate to continue the arrangement whereby the widow of a person with an entitlement to SERPS continued to receive the full amount. Effectively, it was suggested that there should be a cut in the widows' pension. That was of course a matter of great controversy at the time, although I understand that the Government do not propose to change that arrangement.

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Remarkably, the further problem has arisen that the arrangements that were announced in 1986--this is a non-partisan point--seem not to have been implemented. Consequently, several individuals were under the wrong impression as to how much pension their widows would receive.

In addition, the situation of wrong information being provided to people has continued almost to the present day. I understand that as late as April the department was still misinforming individuals as to the true situation. That has given rise to a great deal of concern. An individual will not have made the arrangements he might otherwise have made had he realised the position with regard to his wife's pension if she became widowed.

The Government have made a number of announcements on the issue. The first reaction of the noble Baroness in this House was to say that she was taking legal advice. One presumes that that has taken place. It would be helpful if we could know the advice that the Government received. It is a matter of considerable importance. A number of difficult legal issues arise.

Similarly, Age Concern has referred a case to the parliamentary ombudsman, who announced on 29th March that he would investigate whether there was a case of maladministration to be held against the DSS. He said that he would report in good time before the change came into effect in April 2000.

One of the causes of concern is the length of time it appears to take to make decisions. Without criticising the parliamentary ombudsman, it would be appropriate for him to take account of the fact that we are debating this Bill and that it is a matter of grave concern. To say that he will take from June 1999 to April 2000 to reach a decision when all the facts can be ascertained in a much shorter time does not seem an appropriate time-scale. While the legislation is going through, it is possible for the House to express a view on the appropriate solution--I stress again that I do not make a partisan point--to a difficult situation where individuals are in danger. Clearly some have suffered because of the wrong information received.

There is the difficulty of establishing whether an individual has asked for this information and has received the wrong information by telephone, or more simply by correspondence. One would hope that the ombudsman could refer to that. Leaving the ombudsman issue to one side, one would have thought it appropriate for the Government to express a view in advance of the Bill becoming law. I understand that Mr Stephen Timms, the Minister in another place, confirmed that compensation is to be paid to anyone who can establish that he or she received advice that did not reflect the change from April 2000 and as a result acted to his or her detriment. Clearly there are two problems in establishing it. First, individuals have to demonstrate that they were misinformed. It would be helpful to know from the Government what record is kept of telephone conversations on these matters in the context of our other debates about the computer. I understand that records are kept of telephone conversations between

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individuals and the department. Secondly, in the context of Mr Timms' remarks, it would be necessary for the individual to show that as a result he acted to his detriment; or, more accurately, did not act and as a result suffered.

We are clear that if those two conditions can be fulfilled--that an individual can demonstrate that he was misinformed and suffered as a result--it is already established, and recorded clearly in Hansard of 8th March 1999, that that is the Government's intention. The Government have presumably given a great deal of thought to these matters. As in the case of the passported benefits in relation to the Tax Credits Act 1999, which is now on the statute book, there has been a great deal of interdepartmental discussion--not least between the Department of Social Security and the Treasury because the financial consequences may be considerable. The noble Baroness said on 4th May that the DSS was considering delaying the change. Is that still in the Government's mind and, if so, over what sort of time scale?

My amendment seeks to suggest that we should treat this as a matter of urgency and that the position with regard to compensation should be established before we conclude our consideration of the Bill. This is obviously a preliminary debate--we have Report and Third Reading stages to come--and we must consider at what stage it might be appropriate to press these matters to a Division.

It is a matter of concern, and we realise that the Government must consider it carefully. However, it does not seem to us at all unreasonable that we should ask the Government to make a decision while the House has an opportunity to take a view on what it thinks would be an appropriate response on behalf of the individuals concerned.


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