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Session 2005 - 06
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Standing Committee Debates

First Standing Committee on Delegated Legislation

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First Standing Committee on Delegated Legislation

The Committee consisted of the following Members:


†Mr. David Wilshire

†Alexander, Danny (Inverness, Nairn, Badenoch and Strathspey) (LD)
†Banks, Gordon (Ochil and South Perthshire) (Lab)
†Borrow, Mr. David S. (South Ribble) (Lab)
†Boswell, Mr. Tim (Daventry) (Con)
Bottomley, Peter (Worthing, West) (Con)
†Cryer, Mrs. Ann (Keighley) (Lab)
†Heppell, Mr. John (Nottingham, East) (Lab)
†Holloway, Mr. Adam (Gravesham) (Con)
†Jones, Helen (Warrington, North) (Lab)
†Joyce, Mr. Eric (Falkirk) (Lab)
†Khabra, Mr. Piara S. (Ealing, Southall) (Lab)
Laws, Mr. David (Yeovil) (LD)
†McGuire, Mrs. Anne (Parliamentary Under-Secretary of State for Work and Pensions)
Randall, Mr. John (Uxbridge) (Con)
†Sheridan, Jim (Paisley and Renfrewshire, North) (Lab)
†Walter, Mr. Robert (North Dorset) (Con)
Sîan Jones, Committee Clerk

† attended the Committee

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Monday 24 October 2005

[Mr. David Wilshire in the Chair]

Draft Civil Partnership (Miscellaneous and Consequential Provisions) Order 2005

4.30 pm

The Parliamentary Under-Secretary of State for Work and Pensions (Mrs. Anne McGuire): I beg to move,

    That the Committee has considered the draft Civil Partnership (Miscellaneous and Consequential Provisions) Order 2005.

The Chairman: With this we will consider the draft Social Security (Inherited SERPS) (Amendments relating to Civil Partnership) Regulations 2005.

Mrs. McGuire: I am delighted to be on a Committee that you are chairing, Mr. Wilshire. You and I go back some way; we have served on various Committees on Bills in this corridor and I am glad that your elevation to such an august position has not had any impact on your taste in ties, which are always worthy of comment.

The Chairman: And it makes me a bit quieter.

Mrs. McGuire: First, in my view these statutory instruments are compatible with the European convention on human rights. Hon. Members are aware that the Civil Partnership Act 2004, which we debated last year, provides for same-sex couples to gain legal recognition of their relationship by forming a civil partnership. They will recall that on 14 July we debated orders that amended legislation relating to pensions and benefits to make provision for civil partners.

The proposals before the Committee deal with the remaining amendments needed to primary Department for Work and Pensions legislation to ensure that same-sex couples are afforded the same rights and responsibilities as opposite-sex couples.

I turn first to the Social Security (Inherited SERPS) (Amendments relating to Civil Partnership) Regulations 2005. We debated at length earlier this year the subject of inherited SERPS—pension rights under the state earnings-related pension scheme—and the new deferral arrangements. The regulations do no more than extend those rules to civil partners by allowing any inheritable SERPS to be calculated in the same way as is currently provided for spouses. Where existing provisions treat widowers and widows differently, civil partners are treated in the same way as widowers. The extended rules also allow any
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inheritable increments or lump sum derived from the deceased civil partner’s deferred SERPS pension to be calculated in the same way for a surviving civil partner as for a widower.

The regulations put bereaved civil partners on an equal footing with bereaved spouses in relation to the inheritance of SERPS. To ensure that direct discrimination is avoided, civil partners will have those rights that are currently made available to widows and widowers from the implementation date, and where there is a difference in treatment, civil partners will have the same right as married men and widowers.

I will not detain the Committee unnecessarily by retreading familiar ground; however, it may be helpful if I recap briefly the changes to the inherited SERPS rules and how they relate to the calculation of the survivor’s benefits where the deceased had deferred his or her state pension. Before the changes, a widow, or under more limited circumstances a widower, could inherit 100 per cent. of their late spouse’s SERPS. Under the Social Security Act 1986, that was set to halve from April 2000. The Government put back the start date of the new rules by two years and phased in the reduction to 50 per cent. on a diminishing scale over a period of eight years, thus ensuring that those who will be entitled to inherit the lowest proportion have the longest period to plan for it.

The inherited SERPS regulations modify the primary legislation to provide for the phasing in of the amount of SERPS that can be inherited from 100 per cent. to 50 per cent. on a sliding scale. The proportion of SERPS that the spouse or civil partner will inherit depends on the date when their deceased partner reached state pension age or would have been due to reach it if they had not died before that date. The same sliding scale applies to the calculation of inheritable increments earned on the SERPS component of the deferred pension. For example, the civil partner of a man who reaches state pension age between October 2002 and October 2004 will inherit 90 per cent. of his SERPS. If he is two years younger, he will inherit 80 per cent., and if he is four years younger, 70 per cent., and so on. The phasing-in period ends on 5 October 2010, and the civil partner of anyone reaching state pension age after that date will inherit 50 per cent. In summary, the regulations do no more than ensure that civil partners are afforded the same treatment as married couples in matters of pensions and survivor benefits.

The draft Civil Partnership (Miscellaneous and Consequential Provisions) Order 2005 deals with a small number of amendments that were identified as necessary after we had debated in July the orders that I mentioned earlier. The order amends primary legislation to ensure that surviving civil partners are given the same rights to inherit graduated retirement benefit prior to 2010 as surviving widowers. The order also provides that surviving civil partners will be afforded the same rights as surviving spouses for the purposes of establishing rights over and above the guaranteed minimum pension. In particular, the amendment provides that a scheme may pay no pension, or a reduced pension over and above any
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guaranteed minimum, where the scheme member’s death occurs within six months of forming a civil partnership. Therefore, a surviving civil partner will be treated in the same way as a widow or widower whose marriage took place no more than six months before the member’s death.

The order also extends the financial settlement rules surrounding earmarking or attachment orders to former civil partners. The amendment disapplies the normal rule that prevents pensions being assigned to someone else where, as part of a divorce settlement, a court has ordered that part of a person’s pension be paid to a former civil partner, when that pension becomes payable. That puts a former civil partner on the same footing as a former spouse.

Furthermore, to avoid the need for debating a further statutory instrument, the order makes an amendment to the Department of Health provision to take account of civil partners in the statutory scheme for the protection of vulnerable adults.

Lastly, the order amends accepted matters in Northern Ireland legislation to provide rights for civil partners in respect of occupation and personal pensions. The Department for Social Development has amended the remaining devolved provisions that relate to personal and occupational pensions to provide rights for civil partners by statutory rules.

In summary, the statutory instruments deal with the remaining necessary amendments to Department for Work and Pensions legislation to ensure that civil partners are afforded the same treatment as married couples. I commend the orders to the Committee.

4.38 pm

Mr. Tim Boswell (Daventry) (Con): I begin by saying how pleased I am to welcome you to the Chair, Mr. Wilshire. If nothing else, a dull afternoon will be enlivened by the quality of your tie—and, I hope, by the quality of the debate that we shall have. That debate was started characteristically but excellently by the Minister in her painstaking explanation of the two orders, neither of which trips easily off the page or into one’s understanding.

If I may make a general point, that only goes to show how complex retirement benefit legislation is, and how very difficult inherited situations may be. I have recently been dealing with a family situation at the end of which I think we worked out that the result would be an extra six pence a week—we were not quite sure how, but I am sure that that was better than having nothing at all. That is the kind of difficulty that occurs.

However, the orders come within a context, and perhaps before we delve into the detail, it would be appropriate for members of the Committee to say one or two general things—although not at length—about the legislation. It will be a matter of record, and indeed a matter of some pride and satisfaction to me, that I supported the legislation throughout. I believe that—to pick up the Minister’s own phrase in a much more
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cautious context—it is an important part of our response to the principles of the European convention on human rights, and of generally delivering a civilised society in which people’s relationships are welcomed and supported rather than spurned. We need not go on about that, except to say that there is no covert agenda on this side of the House to subvert it in any way.

It might also be interesting to say to the Committee that I am aware of a case that rather informed my thinking on the related but more limited application of the Gender Recognition Act 2004, which I handled in this place, unlike the civil partnership legislation. I am aware of a couple whose marriage was dissolved under the provisions of the Gender Recognition Act and who will be applying for re-entry into a civil partnership as soon as the legislation comes into force. These are deeply personal matters for the individuals concerned, and I do not intend to pursue them, except to say that the order and the regulations have, in principle, my support.

I shall touch on one area related to the general application of the civil partnership legislation. I was reminded of it by my hon. Friend the Member for Worthing, West (Peter Bottomley), who apologises to the Committee for his absence. He is doing something on the south coast about Nelson, as a number of us are at this time of year, and is unable to attend. He wanted to remind the Committee, and we should remind Ministers, of the remaining anomaly in the legislation. A person such as an elderly lady of 90 who has a daughter living with her to whom she wishes to leave their home, or some property, is unable to do that free of inheritance tax, whereas an elderly man who has a relationship—I care not whether it is sexual or otherwise—with a younger man, either arising from affection or convenience, can in effect conclude a civil partnership and is able thereby to escape from tax legislation. I notice the Minister nodding in response to what I am saying about that anomaly. It is a tax issue, and although it is not one for this Committee, we should remind people of it from time to time. I shall not dwell it on it now.

The important thing is, inevitably, the details of the order and the regulations. I have a number of questions for the Minister. First, she has said, and it is clear in the explanatory memorandum, that the aim is to provide parity, so I would like her explicit assurance that, to the best of her ability in such complex areas, both the intention and the effect of the two orders is to provide parity between civil partnerships and marriages. I understand the difference, although that is still subject to debate in some quarters.

Secondly, the orders tidy up the issue of geographical coverage throughout the United Kingdom. Ministers can be forgiven, and I shall certainly not crow if they make minor slips and put Northern Ireland under the wrong legislation. However, the important thing is that, with all but
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whatever exceptions are required because of the legal system, the orders refer to England, Wales and Scotland. Northern Ireland is dealt with by separate delegated legislation. The effect will be the same across the United Kingdom, and presumably for persons who change their residence from one place to another—and it would be helpful to have that on the record.

There is a third point, which was prompted by something in the Minister’s speech. I confess that I have not pursued this as closely as I might. Indeed, given that these areas involve the interaction of a number of interests, it would be more honest to say that I am not going to claim the deepest possible expertise on every wrinkle of the system. The Minister has been talking about SERPS and inheritance SERPS. Is there any comparable arrangement under the state second pension? I suspect it was covered by the current legislation to which she referred—I did not have the benefit of serving on the Committee. She referred to the guaranteed minimum benefit, which is the pre-1978 arrangement. Then there was SERPS, then the current arrangement, and who knows what will come in the future? I accept the Minister’s good will; I am sure that we are seeking a degree of parity.

There is one final point in the explanatory memorandum that I thought I would ask the Minister to speak briefly to. Because the orders relate to old legislation, they in effect seek to amend statutory instruments that are already in place. The justification in this memorandum is that there is an implication in the Interpretation Act that an order that is amendable can be used, in effect, to amend itself. Perhaps the Minister will explain how that works and confirm that it is all legally above board for those of us who are lay people.

I shall share two points with the Committee that, although detailed, are of slightly more importance. First, the Minister’s speech has been entirely keyed to retirement benefits rather than to in-work benefits. I am not that expert in the system—no doubt our officials will advise us—so I do not know whether any in-work provisions have yet be to tidied up or might give rise to any difficulty. I hope that the Minister can assure us that there are not. I assume that the order cleans the agenda for the Department for Work and Pensions before the implementation of the Civil Partnership Act on 5 December.

The Minister may be able to allay my fears on a point that I spotted myself about winter fuel payments. Pension Service administers them, although not always to people of state retirement age. I should declare an interest to the Committee. I receive a winter fuel payment, having reached more than the age of 60. I hope that the Minister will be gallant enough to say that I do not look it. I remember Ministers encouraging me to take the payment.

It would be somewhat ungallant to point out to the Committee—perhaps it is not appropriate to debate the merits of this at great length, Mr. Wilshire—that,
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at some stage, a person such as myself who is in a married relationship may be caught up by one’s spouse. My spouse is not eligible for a winter fuel payment at present. She will, on attaining state retirement age shortly, be so entitled, but that entitlement must come from my payment, which will be split between us. That is not likely to cause severe marital disharmony any more than it would do in a proper and loving civil partnership, and I do not suggest that it would. A situation could arise, however, in which a civil partnership could interrupt a winter fuel payment, because half of it would have to go from one civil partner to the other under the principle of parity. I am not sure whether the Minister has legislated for that. If she has, I appreciate the careful work that officials have done. Perhaps the Minister can allay my fears both on that particular example, because it is on my mind, and on the more general point.

I do not propose to take all afternoon to make my second point. My hon. Friend the Member for Eastbourne (Mr. Waterson) has advised me because he has done some work in this area also. He has studied the regulatory impact assessment on the Civil Partnership Act, where the question of interaction with the private sector and occupational pensions arose. Many of us were concerned about that on Second Reading. Ministers have been helpful in spirit and in execution by producing a degree of comparability between occupational pensions and state benefits. We have broadly achieved that comparability, and we were pleased to do so.

I am clear neither on timing arrangements for that nor on the likely cost to the private sector. The order touches on a minor cost increase for defined-benefit occupational pension providers. In fairness, the regulatory impact assessment makes the point that some three quarters of providers already make those benefits available to potential civil partners.

The Minister might like to talk a little bit about how much the private sector providers are in tune with that and whether any practical problems exist. There may be some minor cost implications, if only in training her staff to explain matters more coherently, not than she has but than I have to the Committee.

Those are legitimate minor points to make. I do not wish to distract or remove in any way, Mr. Wilshire, the Committee’s focus from the major issue. That must be got right, and I am pleased that it is being got right. I am sure the measures’ intentions are good and that their effect is likely to have covered most of the angles. Subject to the Minister’s assurances, I shall have no difficulty in supporting them.

4.50 pm

Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): Although I was elected to the House only in May this year and therefore did not previously have a chance to appreciate the points made by the
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Minister and by the hon. Member for Daventry (Mr. Boswell) regarding your sartorial example, Mr. Wilshire, I shall look to follow it in the months and years to come with regard to ties and other—

The Chairman: I have to warn you, Mr. Alexander, that you will have to buy more than 40.

Danny Alexander: I hope that there will be time to accumulate such a collection in the years to come.

I congratulate the Minister on her clear exposition of these measures. Like the hon. Member for Daventry, I have no reason to believe that they are anything other than very legitimate and sensible tidying-up measures that follow on from the main legislation. To make a general point, hon. Members will know that the Bill received a warm and unqualified welcome from Liberal Democrat Members when it was introduced and agreed by the House, not least because it followed on from a private Member’s Bill in the House of Lords promoted by Lord Lester that offered the same rights and responsibilities to people in same-sex relationships as to those in civil marriages, thereby providing fair and equal treatment to all in society, regardless of their sexual orientation. Liberal Democrat Members were particularly pleased that, on Report, the Government amended the Bill in respect of survivor benefits for same-sex partners in public sector schemes to put them on an equal footing with married couples.

The hon. Member for Daventry raised interesting points about these measures. I would particularly like to hear from the Minister about the legal basis for the Civil Partnership (Miscellaneous and Consequential Provisions) Order 2005. The explanatory memorandum makes it clear that although the main Act does not provide the basis for the order, another piece of legislation—the Interpretation Act 1978—is relevant. I would be grateful if the Minister spelt out in more detail the legal basis for the order, so that we can be sure that it is legally legitimate.

Some of the matters in these measures come as a consequence of things not being picked up correctly in a previous order, so I would welcome an assurance from the Minister that no further orders will be introduced before the legislation itself comes into force. Of course, those omissions are explicable by the complexity of the systems that we are discussing. With that one caveat, I am very content to support the measures and I look forward to the Minister’s response.

4.53 pm

Mrs. McGuire: I thank Opposition Members who support these two measures. The hon. Member for Daventry supported the legislation throughout its passage through the House. He clearly identified that this matter is incredibly complex. I want to highlight the fact that officials across Government have trawled through hundreds of pieces of legislation and have been as comprehensive as possible in ensuring that parity exists between civil partners and spouses where appropriate.

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I would love to be able to give a 100 per cent. guarantee that all relevant legislation has been caught, but the power exists in the legislation to make further amendments if necessary. To give some comfort to members of the Committee, let me say that we are confident that we have the power to do what we are asking the Committee to consider today and that, as far as possible, we have covered all the relevant legislation.

Having said that, I know that Lord Evans indicated in Committee in another place that he would highlight if any other pieces of legislation were found to have slipped through the net. At the moment, however, we are confident that we are as close to an end as we can be.

Mr. Boswell: I am grateful to the Minister for that assurance, which is broadly satisfactory to the Committee and, I hope, to our constituents. However, difficult situations sometimes arise in our constituency case work, and I hope that officials will be trained and encouraged to refer them to the policy section. If problems result from something that the collective wisdom of the Department and the Committee has failed to spot—unintended anomalies that should not be allowed to happen—they can then be put right without a bureaucratic insistence on the letter of the law.

Mrs. McGuire: I hope that I can give the hon. Gentleman some comfort. I assure him that we intend to make the legislation compatible and as equal as we can, given that we have to deal with an enormous amount of it.

The hon. Member for Daventry asked whether we have the power to put the statutory instruments through the Committee. We certainly do.

I hope to satisfy the Committee on some of the other issues that have been highlighted. I know that a view has been expressed about inheritance tax but, as the hon. Member for Daventry stated, that is a tax issue and is not to do with civil partnerships.

For the record, I was not nodding in agreement when the hon. Member for Daventry said that there was an anomaly. I was nodding in agreement with the fact that the hon. Gentleman and other Opposition Members had raised those issues at various points during debates on the legislation. I assure the Committee that the effect of the legislation will be the same throughout the UK; indeed, that issue exercised the Standing Committee when it debated the Bill.

The orders have the same intention as the legislation; they will provide civil partners with parity with married people in their pension arrangements. The hon. Member for Daventry asked about the second state pension. Existing legislation has been amended so that civil partners can inherit 50 per cent. of the S2P, as can spouses. That legislation is already in place.

The hon. Member for Daventry asked about the cost to the private sector. It is estimated that there will be a one-off cost of between £20 million and £40 million on backdating the provision to 1988, and a one-off administrative cost estimated to be in the
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region of £7 million. The annual cost to the private sector could amount to between £1.25 million and £2.5 million.

The winter fuel payment is slightly off at a tangent, but I appreciate why the hon. Gentleman has raised it. The payments will be split between the qualifying members of a household, as they are now. Civil partnership will not affect that. It is pensioner households that receive the winter fuel payment, so I am afraid that the hon. Gentleman will have to give his spouse her share of the payment; perhaps, in his usual generous manner, before she reaches her 60th birthday. That is a challenge for him.

I thank the Committee for its support. As mentioned by the hon. Member for Daventry and those of my hon. Friends who supported the Bill, we
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have put through Parliament a progressive piece of equality legislation. I hope that, in December, these, the last of the orders, will make it a reality for many people.

Question put and agreed to.


    That the Committee has considered the draft Civil Partnerships (Miscellaneous and Consequential Provisions) Order 2005.



    That the Committee has considered the draft Social Security (Inherited SERPS) (Amendments relating to Civil Partnership) Regulations 2005.—[Mrs. McGuire]

Committee rose at Five o’clock.


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