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Viscount Chelmsford: My Lords, as far as I recollect, under the terms of most occupational pension schemes if one party to the marriage is a member of an occupational pension scheme, that scheme will provide not only a pension, but life assurance also. It is also my recollection that the general advice is that if the scheme member dies in employment, which is when life assurance is paid, the question of to whom the benefits should be paid is usually left, for tax reasons, to the trustees. Most schemes, however, will allow members to submit requests about who they would like the beneficiary to be. The trustees will consider that request if the member dies during employment.
Baroness Young: My Lords, I had not intended to speak at this stage, but I am prompted to do so by the remarks of the noble and learned Lord, Lord Simon of Glaisdale. I was very surprised by what he said on two matters. The first was his general complaint about having Third Reading today, which he said was three working days plus a weekend after Report. That is something of which we are all aware. I would be surprised if that had not been agreed through the usual channels. That is the way in which the business of the House is conducted. There is no reason whatever for the noble and learned Lord to blame the Leader of the House who no doubt
The second point that I should like to raise with the noble and learned Lord is his comment that the amendment that I moved on Report did nothing but restate the existing law. I am not in a position to argue matters of law with a lawyer, but the noble and learned Lord's view on this matter certainly does not seem to be shared by the Lord Chancellor, whose advice I took. If the existing law was working we would not need the amendment. The fact of the matter is that whether it is the existing law or not, it is not working. The evidence that has been produced from the limited research that has already been carried out into this matter seems to support that case.
If the noble and learned Lord is satisfied with the way things are, perhaps I might say to him that, as a distinguished lawyer, he should address his legal colleagues. What are they doing about all this? What are the solicitors doing? Are they aware of what the law is and, if they are aware, why are they not doing something about it? This is not a matter for me. I very much hope that the noble and learned Lord will take up this matter through his professional bodies so that we can have some redress. We certainly need the amendment that has been made to be properly enforced by the courts. I hope that that will happen when the Bill becomes law, having completed its passage through both Houses.
The legal profession has a great deal to answer for in all of this. It is unsatisfactory, and I hope that the noble and learned Lord will take up that point with his colleagues. We have made an advance with the Bill, and I am glad to acknowledge the help I have received from my noble friends.
On the amendment, I listened carefully to what my noble friend had to say. We all have a great deal of sympathy with him about these proceedings. I find it difficult to take a completely new issue on Third Reading, especially when I have not had the time to discuss it, as I should like to do before commenting, and
Lord Mackay of Ardbrecknish: My Lords, as the noble Lord, Lord Meston, has explained, the amendment seeks to provide the courts with powers to compensate the party to a marriage for the loss of benefits which she (or he; more likely she, as we have all agreed) would have received on the death of the other party if there had been no divorce. Similarly, it seeks to provide powers for the courts to ensure that dependent children do not lose any benefits to which they might otherwise have been entitled.
I do not want to argue with the noble and learned Lord, Lord Simon of Glaisdale, about the various merits of divorce law reform over the years, but what I shall say to him, if I dare, is that his hope that the courts were already taking pensions into account on divorce
Lord Simon of Glaisdale: My Lords, what I said was that they are under a duty to have regard to them. Where there are no other assets, they are unable to deal with pension rights at the moment. Merely having regard to them does not transfer property.
Lord Mackay of Ardbrecknish: My Lords, I was going to say to the noble and learned Lord that the preliminary results of the research project which I mentioned in Committee and on Report when speaking to the amendments on this matter show that in something like two-thirds of divorce cases, where the husband had pension entitlement, the pension rights were never discussed in the proceedings. Whether or not that is not having regard to, it seems to me a firm indication that, even if the noble and learned Lord is right about what they should have been doing, they do not appear to have been doing it. That was the point that I was happy to take on board from my noble friend Lady Young in her amendment.
Lord Simon of Glaisdale: My Lords, does the Minister not see that there is no need to have regard to the pension rights if there are sufficient other assets? So it is not surprising that in two-thirds of the cases it was unnecessary to refer to them.
Lord Mackay of Ardbrecknish: My Lords, I do not want to have a debate about this issue, but I should have thought that in the vast number of cases the pension rights are a major asset in the divorce. Even if they are not, they are an important asset which has to be taken into account with the house, other property and financial rights. The preliminary findings that in two-thirds of the divorce cases where the husband had pension rights the pension rights were never even discussed, even to the extent of deciding that they were not relevant, are worrying. It is a worry that is shared widely.
Insurance companies could not be compelled to accept an application, which might be refused on grounds of health or for other reasons, or the company may exact an unreasonably high premium for such an insurance. Such a requirement could give rise to disputes about whether the individual had made reasonable efforts to secure life insurance, and that might mean that insurance companies would need to be represented in court.
Subsection (2) (g) (iii) of the amendment appears to be unworkable as it seems to have the effect of altering the terms of an existing life policy, which might not be feasible. Subsection (2) (g) (i) of the amendment would allow the court to order the pension scheme member to nominate the other party to the marriage or any dependent children to receive death benefits from the pension scheme to which they would otherwise not be entitled. That could mean overriding the provisions of the trust deed and potentially increasing the liabilities on the pension scheme.
Any additional benefits which would have to be paid under that paragraph, and any additional contributions which the member was required to make to the scheme under subsection (2) (g) (iv), would be restricted by Inland Revenue rules on the total death benefits which a scheme can pay and the total contributions which an individual may make to a scheme.
The interaction of subsection (4) with the amendments already accepted on Report mean that an order could be made against a scheme which would contravene the provision of the trust deed or indeed of provisions of pensions legislation or tax law. The amendments already adopted by the House on Report represent a considerable improvement in the position of divorced women, although we did not all agree on the best way forward. To paraphrase the remarks made on that occasion by my noble friend Lady Young and the noble Baroness, Lady Hollis, it makes sense to take one step at a time.
This is a complex area. My goodness, the whole issue of divorce is difficult. Pensions, as those noble Lords who have been here for the past seven or eight days know, are difficult enough. To combine the two makes for a difficult mixture. I must caution the House strongly against accepting an amendment which at best is unworkable and at worst could have potentially adverse consequences for schemes and for the parties to a divorce.
In view of what I have said about the powers already available to the courts if they wish to exercise them, the problems which the amendment would introduce and the significant progress that we have already made with settlement on divorce, I hope that the noble Lord, Lord Meston, will feel able to withdraw the amendment, having raised what is undoubtedly a difficult problem and one which I believe is too complex to be resolved at this late stage of the Bill.
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