House of Commons portcullis
House of Commons
Session 2005 - 06
Publications on the internet
Standing Committee Debates

First Standing Committee
on Delegated Legislation

Column Number: 1

First Standing Committee
on Delegated Legislation

The Committee consisted of the following Members:


Mr. Eric Forth

†Bacon, Mr. Richard (South Norfolk) (Con)
†Borrow, Mr. David S. (South Ribble) (Lab)
†Burden, Richard (Birmingham, Northfield) (Lab)
†Cable, Dr. Vincent (Twickenham) (LD)
†Davies, David T.C. (Monmouth) (Con)
†Fabricant, Michael (Lichfield) (Con)
†Fraser, Mr. Christopher (South-West Norfolk) (Con)
†Huhne, Chris (Eastleigh) (LD)
†Jackson, Glenda (Hampstead and Highgate) (Lab)
McDonnell, John (Hayes and Harlington) (Lab)
†Primarolo, Dawn (Paymaster General)
Raynsford, Mr. Nick (Greenwich and Woolwich) (Lab)
†Reed, Mr. Andy (Loughborough) (Lab/Co-op)
†Riordan, Mrs. Linda (Halifax) (Lab)
†Spring, Mr. Richard (West Suffolk) (Con)
†Watson, Mr. Tom (Lord Commissioner of Her Majesty’s Treasury)
†Wright, Mr. Iain (Hartlepool) (Lab)
Sîan Jones, Committee Clerk
† attended the Committee

Column Number: 3

Monday 21 November 2005

[Mr. Eric Forth in the Chair]

Draft Tax and Civil Partnership Regulations 2005

4.30 pm

The Paymaster General (Dawn Primarolo): I beg to move,

    That the Committee has considered the draft Tax and Civil Partnership Regulations 2005.

The Chairman: With this it will be convenient to consider the draft Tax and Civil Partnership (No. 2) Regulations 2005.

Dawn Primarolo: Like all members of the Committee, I am delighted to see you in the Chair for our debate on these important regulations, Mr. Forth. They were laid before the House on 24 October and are compatible with the European convention on human rights.

The Civil Partnership Act 2004 received Royal Assent on 18 November 2004. In line with the commitments given by the Government during its passage through Parliament, the Act will come into force across the United Kingdom on 5 December, with the first civil partnerships being formed soon after. The two sets of regulations are among several pieces of secondary legislation that need to be put in place before 5 December so that once couples have formed their civil partnership, they can be treated in the same way for tax purposes as married couples and those treated as such.

The 2004 Act creates a new legal status of civil partner, which will allow same-sex couples to gain legal recognition of their relationship by forming a civil partnership. Civil partnership is distinct from marriage and has a separate legal status, but it has always been the intention that tax changes, reliefs and anti-avoidance rules will apply equally to married couples, civil partners and those treated as such. The principle of tax parity follows the commitment made by the Government on 31 March 2004, when the Civil Partnership Bill was first published. The regulations put into practice the principles set out in the 2004 Act and the commitments that have been made. It does so in good time so that the changes can come into force on 5 December 2005. The Act had the support of hon. Members on both sides of the House during its passage through the House and I hope that members of the Committee will likewise support these implementing technical regulations.

The regulations amend tax legislation to ensure that civil partners are treated in the same way as spouses, surviving civil partners are treated in the same way as widows and widowers, transactions entered into in consideration of the formation of a civil partnership
Column Number: 4
are treated in the same way as transactions entered into in consideration of marriage, the dissolution or annulment of a civil partnership is treated in the same way as a divorce or the annulment of a marriage, a former civil partner is treated in the same way as an ex-spouse, and civil partnership status is treated equally with marital stage. Each set of provisions will come into force on 5 December 2005.

The Tax and Civil Partnership (No. 2) Regulations 2005, which deal with secondary legislation, and almost all of the Tax and Civil Partnership Regulations 2005, which deal with primary legislation, do no more than put the general principle of tax parity into practice. They amend legislation and ensure that it is compatible with the Human Rights Act 1998. The draft regulations that deal with primary legislation make amendments that go beyond providing equivalent treatment for civil partners: they make provision for the purpose of removing existing inequalities in treatment based on gender and, in the case of a parent, marital status.

The regulations appear complex, but in fact they do no more than ensure that civil partners are afforded the same treatment as spouses in all tax matters. They represent an important and welcome step forward and I commend them to the Committee.

4.34 pm

Mr. Richard Spring (West Suffolk) (Con): I endorse the Paymaster General’s comments welcoming you to the Chair, Mr. Forth.

Let me tell the right hon. Lady straight away that my party and I support the regulations. I thank her for explaining them. Conservative Members had a free vote on civil partnerships and the majority—myself included—voted for their introduction. Civil partnerships are a welcome solution to the problem of discrimination against same-sex couples in committed relationships on issues such as next of kin status and pension rights. In the same spirit, I welcome the fact that same-sex civil partnerships will have the same tax advantages as conventional marriages, just as we supported the clause in the Finance Act 2005 that conferred the power to make the regulations.

I understand why the regulations could not be introduced through the Civil Partnership Act 2004; that legislation was concerned primarily with social policy. I appreciate also that the first reasonable opportunity to confer the power to make the regulations came in the Finance Act 2005. However, I am slightly lost as to why the regulations are being made now, only two weeks before civil partnerships and the regulations themselves are due to come into effect. The Civil Partnership Act received Royal Assent in November 2004 and the Finance Act in April 2005, but it has taken until November for the Government to make time for the regulations.

I am happy to accept that legislation giving tax advantages to civil partnerships is not the appropriate place for giving tax advantages to people cohabiting in other relationships, such as carers and siblings, but the
Column Number: 5
Government have made commitments to consider recognising such relationships. For example, Baroness Scotland said in another place that

    “these issues have percolated to the top of the discussions on a number of occasions. They are issues with which the Government have grappled and they will wish to continue to do so.”—[Official Report, House of Lords, 10 May 2004; Vol. 661, c. GC31]

Have the Government have grappled with the question? If so, do they intend to introduce legislation so that siblings and carers can benefit from the tax advantages that are currently enjoyed by married couples and are soon to be enjoyed by civil partners? I hope that Paymaster General can update us on the Government’s current thinking.

I reiterate my party’s support for the regulations.

4.37 pm

Dr. Vincent Cable (Twickenham) (LD): I, too, endorse the regulations. My party supported the principles of civil partnership for the same reason as the Conservatives—to deal with the problem of discrimination. The regulations give formal effect to the financial aspects of civil partnerships. We have no problem with that.

I always go straight to the regulatory impact assessment, as it is often a good deal more informative than the regulations. I note that the total cost of the provisions will be less than £5 million a year. That is a large sum for us privately, but it is exceedingly small when set against the Government’s budget. That is fiscally reassuring.

I have the same question as the Conservative spokesman. When the Civil Partnership Bill was being debated in Parliament, a good deal of understandable frustration was expressed about the fact some people, particularly women in mother-daughter relationships and long-standing carer relationships, would be deprived of the same degree of fiscal privilege as those in civil partnerships. The argument advanced at the time, which I accept, was that that was a different problem which could not be dealt with in the Civil Partnership Bill. However, it was acknowledged that dealing with it was feasible and that the Government were working towards doing so. In the RIA, however, the Treasury or the Inland Revenue seems to pour cold water on the idea. For instance, paragraph 18 states:

    “It might also be complex to achieve and apply in practice, for instance, because it might entail new and detailed rules to determine when two persons should count as a ‘couple’”.

It is not immediately obvious why two people in such circumstances should not be able to sign some form of legal certificate endorsing their relationship, or why it should present the Inland Revenue or the Treasury with more of a problem than the regulations will.

I ask the Paymaster General to consider the issue sympathetically. Many thousands of people are concerned about it. I do not want it to get in the way of what is otherwise a step forward in getting rid of
Column Number: 6
discrimination—I fully support the principle of the legislation—but it would be unduly curmudgeonly and unhelpful to raise barriers in the way of other same-sex couples who have genuine reasons to expect the same treatment as the beneficiaries of the regulations.

4.39 pm

Dawn Primarolo: The hon. Members for West Suffolk (Mr. Spring) and for Twickenham (Dr. Cable) have raised two specific questions.

The hon. Member for West Suffolk mentioned the time that it has taken for the regulations to come before the House. He knows that the precise timing is not for me to determine. Although the principle is simple, drafting the regulations and trawling though the tax system to ensure that the all the necessary changes were made has been a substantial exercise, which had to done in good time for 5 December. It is better to be right than rushed, I think. However, I will bear his points in mind.

The second point, which is not directly related to the regulations but has been raised before, is the wider question of tax treatment for those who are not married and not in a civil partnership. The Government have asked the Law Commission to consider including cohabitation in its programme of reform. The Law Commission, as we all know, is an independent body for law reform and ultimately it is for the commission to decide how to recommend on the process. I understand that there is a project to consider people who live together in a relationship bearing all the—it says hallmarks in my brief, but I do not want to use that word—familiar points that we would recognise in terms of intimacy and exclusivity of those who are not married but who have formed a relationship. When the recommendations are made, the Government will need to consider and respond to them.

We all recognise that these are complex matters, but that should not distract us from the purpose of the regulations. The Civil Partnership Act provides for the legal status of a same-sex relationship equal to that of marriage for tax purposes. The regulations will provide that.

Question put and agreed to.


    That the Committee has considered the draft Tax and Civil Partnership Regulations 2005.

Draft Tax and Civil Partnership (No. 2) Regulations 2005.


    That the Committee has considered the draft Tax and Civil Partnership (No. 2) Regulations 2005.—[Dawn Primarolo.]

Committee rose at eighteen minutes to Five o’clock.


House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2005
Prepared 22 November 2005