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Baroness Elles: Before my noble friend sits down, will the Minister be kind enough to make available the figures to which he referred in stating that it was more expensive in certain cases for the Government to give social security rather than allow income tax off on certain pension issues. I should be grateful if he would allow that information to be made available.
Baroness Hollis of Heigham: Before the noble Baroness decides what to do with the amendment, perhaps we may press the Minister on some of his remarks. His major pointas I believe many of us expectedwas that we need further research because the situation is difficult and (to use his words), "We must not rush; we must not be hasty; we must not go in for ill-conceived legislation; we must not go in for ill-informed legislation; we must not prejudge the issue", and so on. Such statements are perfect Cornford microcosmographia, are they not? The time is not ripe; we must have more research.
Let us address the specific issues that the Minister picked up. First, he said that the courts already have the right to offset the pension as an asset against other assets but that there is a need to know when that situation worked and when it did not. Why? We know now that for many families it is appropriate that the assets represented by a pension are offset against other assets. We also knowand I refer to the case that the noble Baroness, Lady Young, citedthat where there is no matrimonial home to be sold the family cannot make such offsetting apportionments. For the remainder, why does the Minister need to know that information? The courts need to know because they make the decision, but the Minister does not need to know. He needs to know that the problem exists. So long as he empowers the courts to address that problem, as they do when considering all the other financial assets that they distribute, that the problem exists is all the Minister needs to know.
Secondly, the Minister states that the PMI report was uncertain, complicated and not quite sure how far it should go. On the contrary, I have the PMI report. It is strictly unambiguous. On page 52 it states:
There is nothing ambiguous about that. There is nothing uncertain. There are no doubts, no problems and no difficulties. The Minister invents them as an excuse to say, "We want to come back to this problem at some time in the future"perhaps never.
The question is not, "What does the Minister not know?". It is, "What is it that the Minister does not know that nonetheless cannot be resolved by the courts?". The Minister has said that the courts would know how to assess the transfer cash value of that pension. That is done now. Therefore we know already what the pension asset represents in cash terms. We know too that the courts have years of experience in sorting out complicated allocations of financial assets on divorce, such as who will continue to pay the mortgage on a matrimonial home in which only the wife will remain. The courts have such experience now. So what does the Minister need to know which the courts cannot sort out?
Nothing that the Minister said today gives any evidence or weight to the argument that we could not now proceed with our current information. The research will be useful. That is fine. Let such research influence through the Lord Chancellor's guidance, steering the courts through how to apportion assets if that is appropriate. But at this point in time the need to state in the Bill that the courts must take pension assets into account and that they may do so by dividing them without jeopardising other privileges should not be undermined.
Lord McIntosh of Haringey: I am the last person to wish to cast doubt on the good will of the Government in commissioning research on the matter. I have been a survey researcher all my working life. I was mildly encouraged by what the Minister said about the research that is being conducted. I am glad to hear that it is being conducted among those who have experience of divorcein particular among solicitors in recent divorce cases. It sounds as though the sample size is large enough to give what may well be reliable results.
The question which has to be asked is: what is the brief to researchers and how will the results in due course be used to influence government policy? Echoing my noble friend Lady Hollis, I wonder whether the Government have fully understood the nature of the issue now before the Committee. It is not a matter of establishing down to the last decimal point the proportion of divorces in which the transfer value of a pension is an important consideration. In adding the power for the courts to take pensions into consideration, it is surely enough to know that there is widespread suffering as a result of the existing law. Whether that widespread suffering represents 1 per cent., 5 per cent. or 10 per cent. of divorces is not the essence of the problem that we consider today.
I do not disagree with what my noble friend Lady Hollis quoted regarding the Pensions Management Institute report. Its views are entirely clear. However, that is despite the fact that the pensions industry will not benefit from the amendment. The pensions industry does not want to have to calculate transfer values at the time of divorce, or at any other time, if it can avoid it. It has no interest in paying pensions to two people instead of one. We are not dependent on the good will of the pensions industry for doing justice to those who have already suffered the pain of divorce. The noble Baroness, Lady Young, argued the proposal most persuasively. It is being proposed because it is right, not because it is convenient to the pensions industry. Therefore, quite frankly, the views of the pensions industry are secondary in the matter. If the pensions industry were to be opposed to the amendment, it would not detract from justification for the amendment.
I hope that the Committee will not be unduly influenced by what the Minster said about the value and relevance of the research. Research is, of course valuable. But the principle which has to be established does not depend on the result of the research.
Baroness Seear: The Minister never took account of the most important point raised by the noble Lord, Lord Boardman. It is a point which could perfectly well be dealt with in this legislation without waiting for research. As I understood it, there is no power to allocate part of a pension. The courts are not allowed so to do. It is no good saying that one can make an agreement on the assets if the most valuable asset of all cannot be divided. In a great many cases the pension is the only valuable possession which the couple have. If that cannot be divided because the law prevents it from being divided, then the courts cannot make a proper, sensible division.
It is not possible at law to split a pension. To make that possible is surely a change which the Minister could introduce. It would be in line with his claim that the best way to deal with the matter is by division of the assets. One cannot have that division if the most important asset cannot be divided.
Lord Mackay of Ardbrecknish: I am happy to try to be helpful. However, it is always difficult to be the voice of calm reason, which I am trying to be. We all know of cases where we, rightly, feel a degree of indignation on behalf of the wife who has been left pensionless. This is a complex issue. It would be foolish of this House and Parliament in general not to accept that the issues are complex and that it is important to get them right when we act on them. I wish to make a number of points before I again rehearse what I said in my remarks about the position of my noble and learned
I do not wish to take anything away from what the noble Baroness said and I hope that we do not have too heated an argument about it because we are agreed on the fundamentals. On the PMI working group, according to my information, the final decision was finely balanced.
The research project is being carried out by social and community planning research, which is an independent research institution. I must tell the noble Lord, Lord McIntosh, that the project will explore the current treatment of occupational pension rights in relation to divorce as part of a programme of research into women's pension provision in Britain. We hope that the results of the report will be available by the end of the year. The study will also cover Scotland separately, in order to pick up the difference in the legal position there.
Responding to my noble friend, I repeat that my noble and learned friend the Lord Chancellor and I will consider the proposition that the Matrimonial Causes Act 1973 should be amended so as to place greater emphasis on the need for pension rights to be taken into account by the courts when they are considering financial provisions on divorce. At the same time we shall also give consideration to whether a power should be taken to prescribe a method of valuing pension rights on divorce. Those are the two points I made and I have little doubt that we shall return to them on Report.
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