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Baroness Hollis of Heigham: My Lords, I thank my noble friend for what I thought was a powerful and moving speech. As always, her arguments are cogent and eloquent.

It may be helpful if I begin by explaining briefly the requirements of Section 62 of the Pensions Act 1995. Section 62 sets out the equal treatment requirements for OP schemes. In general terms, schemes need to treat men and women equally if they do the same work or work of equal value. For example, men and women must be offered access to the scheme on equal terms. They also receive the same benefits in relation to service from 17 May 1990. The proposed amendment would extend the equal treatment requirements to married and unmarried couples. As my noble friend has said, the main area affected would be the payment of survivors' benefits.

At present, Inland Revenue rules allow survivors' benefits to be paid to anyone who is financially dependent or inter-dependent on the deceased person. Therefore there is already scope to carry out what the

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amendment seeks to achieve. As we said in the Green Paper, we do not believe that new provisions are needed in the legislation. Employers who offer occupational pension schemes decide whether or not the scheme will provide survivors' benefits. For example, some schemes may be non-contributory, but one may have to contribute extra if one is to receive survivors' benefits in one's particular case.

If those benefits are provided, scheme rules may specify that they are payable only to widows and widowers. However, evidence suggests that a growing number of schemes no longer restrict survivors' benefits to married couples. Many schemes now provide survivors' benefits not only to unmarried heterosexual couples, but also to same sex couples. The Government welcome that provision.

The NAPF national pension fund survey of 1988 indicated that 75 per cent of private sector schemes provide pensions for unmarried partners and 45 per cent of them for same sex partners on a discretionary basis. However, the public sector's statistics show that the equivalent to 75 per cent for unmarried partners in the public sector is 28 per cent, and for same sex partners 45 per cent in the private sector is 20 per cent in the public sector. As I say, this is a matter for scheme trustees.

The proposed amendment would compel schemes to provide survivors' benefits to married and unmarried couples on the same basis. We cannot support this amendment for two basic reasons. First, we must remember that if we compel schemes to extend survivors' benefits, that will result in increased costs for those schemes that currently restrict survivors' benefits to widows and widowers. Although accurate costs are difficult to estimate, the Government Actuary's Department has suggested that the costs could be in excess of £½ billion a year for each year of future service. Those costs should not be inflicted lightly on schemes and contributing members.

My noble friend suggested that members would pay the same contribution whether they were married or not and asked why they should not give them the same level of benefit? But my noble friend, who has more experience in pension matters than perhaps any 20 of us in this Chamber, will know that the actuary takes account of the benefits to be provided under the scheme rules and makes assumptions on matters like the proportion of members who are married at retirement or death. That assumption would have to be increased and would have to be reflected in contribution rates if more people were eligible for survivors' benefits. Therefore costs could and would increase.

Secondly, we need to consider the cost for public service schemes which are funded by public expenditure and thus the general taxpayer. As I say, there lies the biggest gap in this form of provision. It has been estimated that £200 million of the figure just mentioned of £½ billion would be for public service schemes. Therefore, any such move to extend survivors' benefits would need detailed consideration with all those who would face extra costs.

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For example, when we debated Amendment No. 23 earlier, my noble friend expressed her concern that the introduction of stakeholder schemes could act as an incentive for employers to close down their occupational pensions. Yet stakeholder pensions will not make any difference to the cost of providing an occupational scheme. By contrast, this amendment could impose substantial extra cost on those schemes. In some cases, employers might believe that it would make the future of the scheme unviable. Therefore, while I understand the intention behind my noble friend's proposal and personally sympathise with it, I must stress that this is a complicated issue. It would be rash to legislate. I am not going to go into why this amendment might be technically deficient. I do not believe there is any point because my noble friend was arguing from the point of principle. I very much hope that schemes which have discretionary powers will choose to move in this way. But we believe that for the time being schemes are best left to make their own decision.

In terms of the thoughtful contribution of the noble Lord, Lord Goodhart, I was reflecting on whether there would be additional advantage in looking at the matter further. I cannot give that undertaking at the moment. However, this is an issue which has come before the Government several times already--certainly since I have been on this side of the Chamber. I believe it is fair to say that the Government are very sympathetic to the extension of such rights where possible. As I say, our difficulty is that we do not want, on the one hand, to make stakeholder schemes less cost effective and, on the other hand, the implications for the public service schemes are really rather substantial. I hope that the tide is moving in the direction of my noble friend's proposals. But, as I say, I believe this is an issue which is yet to be resolved. With those comments I would hope that my noble friend could withdraw her amendment.

Earl Russell: My Lords, before the Minister sits down, perhaps she could confirm that she and I both belong to the university superannuation scheme which is perhaps the only scheme which for a long time has made the type of provision for which this amendment asks. Has she ever heard any member of that scheme complain about the resulting cost?

Baroness Hollis of Heigham: No, my Lords, because while those university schemes are not as well paid as they would like to be, they are relatively better paid. The salaries of university lecturers start at £17,000 and go up to about £50,000 for vice-chancellors. That is very different from stakeholder or other occupational schemes. Also, the university scheme is privately, not publicly, funded such as those for the police, teachers, the Civil Service or whatever. That is where the costs would fall on the Exchequer.

I agree with the push of the noble Earl's question. If schemes put the question to their membership with full and proper information about the extension of choice in lifestyle that would then be available without worries for the future, that could prove compelling and

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members might be willing to pay the extra cost. I hope so. At the moment, the Government's position is that it is for private schemes to determine, within their discretionary powers, whether to extend benefits. There is nothing to stop the membership of such schemes pressing for the extension of benefits to unmarried partners. If they were to do so, I would be cheering them on.

Baroness Turner of Camden: My Lords, I thank my noble friend for her sympathetic response and the noble Lord, Lord Goodhart, for his support. I accept that the wording of the amendment is not all that it might be and, for that reason, I do not intend to press it to a vote. I am grateful to the Minister for giving the clear impression that the Government are very sympathetic and that the times are moving in this direction. I am glad to learn that 75 per cent of private schemes already comply with the general thrust of the amendment. I was aware that there had been a lot of progress in that respect in recent years.

The problem lies with public sector schemes--the exception being the USS, to which the noble Earl referred. Unfortunately, public sector schemes have not moved as fast. In light of the Minister's statements this evening, I hope that the remaining 25 per cent of private sector schemes that have not followed suit will feel inclined to do so. One hopes that attention will be paid to the Government's views and that eventually, with public sector schemes, unmarried partners will receive the equality of treatment to which they are entitled. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 16 [Excessive pension contributions made by persons who have become bankrupt: Scotland]:

Lord McIntosh of Haringey moved Amendment No. 42:

Page 21, line 26, leave out (“debtor's").

The noble Lord said: My Lords, in moving this amendment, I would like to speak also to Amendments Nos. 43, 44, 56, and 229 to 257. This group of amendments makes changes to the provisions for the protection of pensions on bankruptcy. These are complex measures and parliamentary counsel has taken the opportunity afforded by the Summer Recess to look again at the way in which they are drafted. The amendments simply correct or clarify the legislation. They do not involve any changes in policy. May I stop there or shall I explain the amendments in more detail?

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