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Baroness Turner of Camden: My Lords, I thank the Minister for that contribution although I am not terribly happy with it. As she said earlier, the stakeholder scheme is intended for those situations in which the people concerned do not have access to an occupational scheme. That means that the employer is not at present making any payment to the scheme or pension provision of his employees.

The amendment was drafted specifically not to have immediate effect but to provide that,


In other words, it was intended to indicate that when there was a scheme the employer would have in sight the possibility that when the regulations were in effect he would have to make some contribution towards it.

We are not just talking about the very low earners. I still believe that many people will not be willing necessarily to put aside enough money for a reasonable pension even if they are not earning at the lowest level. Often people are asked to contribute to a pension when there are other calls upon their income: they are bringing up children or paying off the mortgage, and so on. Pension contributions are usually the last thing they think about. I believe that some measure of compulsion on both sides will be necessary if the scheme is to work properly.

However, I suspect that it is not a good idea to call a vote on the issue at this time of the evening. I am not happy with the response received. I hope that as matters progress and, as indicated earlier, the Government have not entirely dismissed the notion of compulsion. As matters progress, it may become necessary for the Government to consider again the provisions made. In that case, perhaps they will again consider the possibility of compelling both sides in industry to make a contribution. In the circumstances, I shall not call a vote at this stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 [Obtaining information with respect to compliance with section 3]:

Lord McIntosh of Haringey moved Amendment No. 32:


Page 4, line 29, at end insert (“, or
( ) corresponding Northern Ireland legislation,").

On Question, amendment agreed to.

Clause 5 [Powers of inspection for securing compliance with section 3]:

Lord McIntosh of Haringey moved Amendment No. 33:


Page 5, line 3, after (“3") insert (“or corresponding Northern Ireland legislation").On Question, amendment agreed to.

On Question, amendment agreed to.

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Schedule 1 [Application of 1993 and 1995 Acts to registered schemes]:

Lord McIntosh of Haringey moved Amendments Nos. 34 to 38:


Page 89, line 22, at end insert (“to (13)").
Page 89, line 25, at end insert (“except subsection (3)").
Page 89, line 28, leave out from (“91") to end of line and insert (“, 92 and 94 (assignment and forfeiture etc.) except section 91(5)(d);").
Page 89, line 29, leave out (“96") and insert (“96(2)(c)").
Page 90, line 18, leave out from first (“to") to end of line 19 and insert (“, or to any subsection of, section 1 or 2 includes a reference to any provision in force in Northern Ireland corresponding to that section or (as the case may be) that subsection; and the reference in sub-paragraph (1) to any pension scheme includes a personal pension scheme (as well as an occupational scheme) within the meaning of the Pension Schemes (Northern Ireland) Act 1993.").

On Question, amendments agreed to.

Clause 7 [Reduced rates of contributions etc: power to specify different percentages]:

[Amendment No. 39 not moved.]

Clause 9 [Monitoring of employers' payments to personal pension schemes]:

Lord McIntosh of Haringey moved Amendment No. 40:


Page 11, line 10, at end insert--
(“( ) References in this section to, or to any provision of, section 111A include references to corresponding provisions of Northern Ireland legislation; and in this section as it has effect in relation to those corresponding provisions, “employee" and “employer" have the meaning they have for the purposes of those provisions."").

On Question, amendment agreed to.

Baroness Turner of Camden moved Amendment No. 41:


After Clause 10, insert the following new clause--

EQUAL TREATMENT RULE

(“ . In section 62 of the Pensions Act 1995, after subsection (3) there shall be inserted--
“(3A) An equal treatment rule has the effect that where--
(a) an unmarried partner is employed on like work with a married person in the same employment,
(b) an unmarried partner is employed on work rated as equivalent with that of a married person in the same employment, or
(c) an unmarried partner is employed on work which, not being work in relation to which paragraph (a) or (b) applies, is, in terms of the demands made (for instance under such headings as effort, skill and decision) of equal value to that of a married person in the same employment,
but (apart from the rule) should any of the terms referred to in subsection (2) become less favourable to the unmarried partner than to the married person, the terms shall be treated as so modified as not to be less favourable.
(3B) For the purposes of subsection (3A), an unmarried partner is a person who--
(a) is living with another person of the same sex or of the opposite sex in the same household; and

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(b) has been living with that person in the same household for at least two years; and
(c) is living during the whole of that period as the husband or wife of that other person."").

The noble Baroness said: My Lords, we now come to a different aspect of pension provision. Amendment No. 41 is concerned with equal treatment. It seeks to ensure that unmarried partners of pension scheme members have similar rights to those of married partners of scheme members. In putting down the amendment I intended a move in the direction of what seems to me to be a more modern way of thinking.

I am a proponent of marriage. After all, before I became a widow I had been happily married for over 40 years. But one has to admit that society is changing. In many ways I think that it is improving. It is becoming more tolerant of lifestyles which depart from the traditional. An increasing number of couples remain in stable relationships for many years without getting officially married; and the same is true of same sex couples--lesbian and gay couples--some of whose relationships are more harmonious and more stable than others in more conventional arrangements. The number of cohabiting couples is expected to rise to about 3 million in 2001. Cohabitation is now socially accepted, with only a minority of people disapproving, even in the older age groups.

The proportion of adults aged 16 to 59 cohabiting has risen to around 25 per cent, which is double the level of 15 years ago. One-third of all births are now outside marriage, but three-quarters of them are registered by parents living together at the same address.

The rights and responsibilities of cohabitees are increasingly being recognised in other areas: by the Government in relation to housing and social security; by the law in relation to inheritance and compensation; by the Law Commission in its forthcoming report on property rights of home sharers; and by the Law Society which recommended that cohabitants should obtain equivalent rights to pensions as divorcees on separation.

Moreover, the Government, through the Minister, often tell us that times have changed and that we must therefore modernise in order to keep up with these changes; hence the amendment that I have put before your Lordships today. I tabled it at the request of my union, MSF. The text was originally drafted by the union's lawyers. Unions often have to cope with pleas from unmarried partners of deceased members and it is difficult to tell a woman who may have lived with a man for more than 20 years and had his children that she has no legal claim under a pension scheme. But that has happened on a number of occasions and the same is true of same-sex partners.

The text of the amendment, however, does not rely on the test of dependency. I am advised that in certain other areas of the law, the tendency has been to move away from dependency and to rely on cohabitation. For example, the Inheritance (Provision for Family and Dependants) Act 1975 was changed in 1995 at the instigation of the Law Commission. The commission

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recommended that cohabitants should be able to apply for benefits under the 1975 Act without the need to show dependency. As a result, a new category of cohabitant was inserted into the Act defined as a person who:


    “during the whole of the period of two years ending immediately before the date when the deceased died ... was living


    (a) in the same household as the deceased and


    (b) as the husband or wife of the deceased".

A similar definition appears in Section 1 of the Fatal Accidents Act. Again, there is a reference to two years immediately prior to the date of death. In the amendment, however, the draft defines the two-year period by reference to the date when any claim is made.

I hope that the Minister will be willing to look with favour on what is proposed here, even if the text as it stands may not be completely acceptable. I also hope that it will not be opposed on grounds of cost. To do so would be most unfair to unmarried partners as the scheme member will in most cases have had to pay the same contribution as that paid by the deceased partner in a married relationship.

However, I am indebted to Stonewall for some excellent research material produced last year, copies of which were sent to the then Minister of State at the DSS, Mr John Denham. A detailed questionnaire was sent to a number of top pension schemes. The results show that partners' pensions, where these are provided, do not create significant additional administration costs and that, indeed, costs as a whole are not an issue. Most schemes would not want to increase members' contributions in order to meet the cost of partners' pensions. Indeed, it is surely clear that in making actuarial assumptions about the level of contributions required, actuaries must assume that each scheme member will have a partner, so whether that partner is married or unmarried must be immaterial.

It is clear that many pension schemes are making an effort to provide partners' pensions for unmarried and same-sex partners. But Inland Revenue rules, which allow pensions for unmarried and same-sex partners only at the trustees' discretion, can sometimes make for difficulties and complications. The arguments that partners' pensions would place financial burdens on employers and act as a disincentive to the continuation of final salary pension schemes does not appear to be substantiated.

I know that changes in society and the way in which society looks at issues take some getting used to, but after a while they become accepted. I well remember back in the 1970s when I was a union official, making a proposition during negotiations on a pension scheme with a very large employer; an employer, moreover, with a very good reputation for employee relations. I suggested that widowers' pensions be provided in the scheme; they already had widows' pensions. The employer's representatives on the other side of the table looked at me in horror and said, “Widowers' pensions--you can't be serious". Now we take widowers' pensions for granted and we accept that widows and widowers should have equal treatment. It

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would be contrary to our perception of equality for that not to be so. I hope that we shall be able to take the same steps to keep up today and to accept my amendment. I beg to move.

10.30 p.m.

Lord Goodhart: My Lords, this is an extremely important amendment and one which we support in principle. It would now be widely accepted that where two unmarried adults, whether of the same sex or of different sexes, are living together in a personal relationship, and where one is financially dependent on the other, that dependency should be recognised by the terms of pension schemes. “Dependence" should of course include inter-dependence.

As the noble Baroness has explained, the purpose of the amendment is to go further than that and to provide something equivalent to a widow's or widower's pension as of right and not merely to extend it to cases of dependency. Again, that is a position with which my party would agree. But while we accept the position in principle, there are certainly problems with this particular amendment. I do not believe that it in fact achieves what it sets out to do. I do not believe that it is appropriate for me to explain why that is the case--no doubt the Minister will do that.

If that objective is to be achieved, it will need a great deal of careful thought. There are issues relating to how one defines the relevant personal relationships. I am not sure that simply living in the same household for two years would in itself be a wholly satisfactory test. However, it is desirable that more thought should be given to the matter. We should certainly like to see the Government undertaking first to set up a study of when and how it would be possible to provide pensions for unmarried partners on a basis equivalent to that for married couples. We should also like the Government to undertake to come back with appropriate proposals in future pensions legislation.


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