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Lord Bridges: My Lords, when we last debated the matter in Committee I supported the amendment moved by the noble Baroness, Lady Young, because I had some specific knowledge of the position of divorced wives of Crown servants living abroad who had not been able to make any provision for their own retirement. I am glad to be able to support her further amendment this afternoon. I am particularly happy that we have been able to move forward and at this stage of the

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proceedings have some real prospect of making provision to prevent such situations from occurring again.

I am much attracted by the logic of the amendment moved by the noble Baroness, Lady Hollis. At first sight it seems to provide a more complete answer to the difficulties that we face. In deciding which of the amendments to vote for, I shall certainly vote for that moved by the noble Baroness, Lady Young. I shall pay particular attention to whatever the noble Lord, Lord Mackay of Ardbrecknish, can tell us on some of the matters referred to today. For example, will it really be impossible for the Government to allow any of the benefits accruing under SERPS to be attached? That seems to be a material matter. Should we pay attention to the different legal language used in the three amendments? Amendment No. 174 states that:

    "A matrimonial court may make a pensions adjustment order".

Amendment No. 175 states that:

    "a court may take into account".

Amendment No. 225 states that:

    "the court is to have regard".

Those of us who are not learned in the law would be grateful to have some guidance as to which of those legal expressions is more binding or more useful.

This is an important moment. Although we are not able to apply the provisions retrospectively—that would be wrong —and thus are unable to prevent the distress which is already occurring, we have a real opportunity today to prevent further misery. That is an issue on which I, like other noble Lords, have received most moving letters. I am anxious to do what we can to avoid that distress in future.

4 p.m.

Lord Simon of Glaisdale: My Lords, I confess that I am diffident in intervening in the debate. In the first place it is many years since I had the responsibility of presiding over the matrimonial jurisdiction of the High Court, and incidentally thereby presiding over the appellate jurisdiction from lower courts in matrimonial matters.

The second reason is that I am generally used to agreeing with the noble Baroness, Lady Hollis, and the noble Baroness, Lady Young. However, on this occasion I am impressed by the criticisms that have been made of both amendments. In my view, in addition they are far too complicated. I venture to agree with what was said by the noble Baroness, Lady Seear. We want to give the courts the widest jurisdiction to intervene with the utmost flexibility so to arrange the pension right as to work out equitably in the circumstances of the break-up of the marriage.

The crucial situation is where the pension right is virtually the sole major asset of the family. Some of the amendments tinker with the power to make a financial provision or to make a property adjustment order. But the difficulty really arises where there is no current income and no substantial property. Everything then turns on how the pension shall be dealt with.

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Before I go further, I should like to say at the outset how strongly I agree with what was said by the noble Baroness, Lady Hollis, the noble Baroness, Lady Seear, and the noble Lord, Lord Mishcon, that it is essential that the payment should be made direct to the wife by the administrators of the pension fund. As was pointed out, it is asking for trouble if the payment is channelled through the husband, and it is quite unnecessary. I venture to suggest that the amendments should be withdrawn and a much simpler amendment worked out for a later stage, giving the courts the widest power to do what they think right with the pension and, above all, to ensure that any adjustment of the pension is operated on behalf of the administrators so that it goes directly to the wife. To my mind that is far the most important point to arise from the debate.

The amendments have been moved in admirable speeches and they go right back to indicating the economic background to a marriage. A marriage is much more than an economy; it is a co-operative division of labour between husband and wife. In bearing the child, the wife inevitably suffers prejudice. Over and above the months of nausea and fatigue, over and above the hours of pain and peril, she inevitably suffers economically and financially. When that happens, she thereby frees her husband to seek economic advantage, and that is right and proper. However, where there is a division of co-operative labour in such circumstances, there arises the right or duty to ensure that the fruits of that labour are equitably delivered to the two parties. That is simple enough in current income.

I confess that I am in favour of community of property between husband and wife and, as he is a Scotsman, I fancy that the Minister may not be entirely inimical to that situation. But it is unnecessary to go so far. If we can deal equitably with the matrimonial home and its contents as well as with the pension rights, we will have tackled 95 per cent. or more of the problems that arise.

The other point on which the amendments focus is the inequity of the Divorce Reform Act 1969 which is now consolidated in the Matrimonial Causes Act 1973 before your Lordships. It is valuable to remember how the disastrous 1969 Act was sold to the public. We were told that it was a "Kiss and make up" Bill. Its predecessor was called the "Strengthening of marriage" Bill. If we look at what happened before the 1969 Act came into force, there were 62,000 decrees nisi; in 1991 there were 153,000 decrees nisi. That happened because at every stage the Act preferred facilitating divorce to giving justice to the married woman.

I am glad that my noble and learned friend Lord Hailsham of Saint Marylebone is in his place because he was spokesman in the other place on the Bill. He recognised at once the inequity, particularly that which arises from the provision that a husband could repudiate his wife after five years' separation, no matter what the balance of conduct was between them. In doing so, he could thereby deprive his wife of the pension, when one was in question and where it was the only asset.

Despite the warning, the Act went blindly on and has had the result not only of the break-up of marriages but the injustice to women that I ventured to describe. I

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should like to see all the amendments withdrawn and a much simpler scheme worked out for the Third Reading or to be taken in the other place.

However, there are other matters. I agree with all the detailed criticisms that have been made of each amendment. Another point is that the trustees, the administrators of the pension scheme, are intimately affected under any of the amendments and, above all, under the proposal that they should pay any moneys direct to the wife. However, there is no provision for their representation before the court, and that is essential. No doubt the details can be worked out by rules of court, but the omission cannot be passed.

Further, there is the question not only of the second or former wife, but there might be more than one former wife and their interests might be in conflict. There could be great differences according to when the marriage took place in relation to the accrual of the pension rights.

Admiring, as I presume to do, the features that have been urged, I very much hope that the amendments will be withdrawn. Whatever happens, it is essential that Amendment No. 225 in the name of the noble Baroness, Lady Hollis, should be passed so that the pension right is reallocated and given directly to the wife by the administrators of the pension fund and not channelled through the husband for the reasons that have been so powerfully and cogently expressed.

The Lord Bishop of Ripon: My Lords, the noble Baroness, Lady Seear, referred to the variety of circumstances surrounding divorce and the need for flexibility in the courts. I should like to illustrate that from a particular standpoint—that of the clergy of the Church of England. I believe that this may have some relevance also for other groups.

I listened with great attention to the noble Baronesses, Lady Hollis and Lady Young, and was grateful for their powerful arguments, on the basis of natural justice, for a change in the law. I wish to add one further argument to those which they put forward. It is that in the case of clergy and their wives, it may not be so much a matter of financial contribution to an accruing pension but rather the contribution which a wife sometimes makes to the work of clergy in parishes. Some wives—perhaps a decreasing number these days—support their husbands considerably in the work they do in a parish. Therefore, when sadly they reach the point of divorce, as occasionally happens, they feel profoundly aggrieved that after having given so much by way of energy, care and time to supporting their husband, there is nothing for them by way of pension provision. Sometimes there is a particular bitterness in the voices which I have detected in the letters that they have written.

I have listened carefully to the speeches that have been made by the noble Baronesses, Lady Hollis and Lady Young, to try to discern which of the amendments will meet the case of clergy and their divorced wives. I was particularly struck by the point made by the noble and learned Lord, Lord Simon of Glaisdale. If we are to go for a clean-break solution—and, like other noble Lords, I believe that to be right—it may be that in a clergy family there are no assets to set against the

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pension. As I understand it, the proposal of the noble Baroness, Lady Young, requires that if a clean-break solution is to be looked for it is to be done by offsetting other assets against future pension provision. However, clergy often have no other assets. They live in tied houses, their stipends are small and they may have nothing by way of accrued bank balances. Therefore, under the amendment proposed by the noble Baroness, Lady Young, I can see no way in which a clean-break solution can be arrived at. I am attracted by the amendment put forward by the noble Baroness, Lady Hollis.

Having spoken to the secretary of the Church of England pension scheme, I understand his preferred solution is that an opportunity be given for a matrimonial court to determine that accrued pension rights up to a particular moment can be divided as seems best to the court, that those should be kept separate and from that moment onwards a certain proportion should by right belong to the divorced wife. There will be no difficulty about the later allocation of money. The pension will be paid directly to the wife in due course, and in that way a clean break can be achieved. I very much hope that some kind of solution along the lines advocated by the noble Baroness, Lady Hollis, will be found.

4.15 p.m.

Lord Meston: My Lords, I hope that the House will allow another contribution from a practitioner in the field of matrimonial law. I wish to support Amendments Nos. 174 and 175 in the name of the noble Baroness, Lady Hollis, in preference to Amendment No. 225 to be moved by the noble Baroness, Lady Young, even if the valuable Amendment No. 226 is added to it. Although one may have reservations about the drafting of Amendment No. 174, it appears to provide a selection of solutions, including proper pension splitting on divorce. I regret to say that in reality it appears that Amendment No. 225 adds little to the existing law that governs matrimonial finance and property distribution in England and Wales. Under existing law the courts can and will in appropriate cases take account of resources which a party to a dissolved marriage may then have, or may have in the foreseeable future. The courts recognise a pension as such a resource, and their existing powers can be used to try—and I emphasise "try"—to compensate the wife for the disparity in positions in terms of pension rights.

Having read Amendment No. 225 and asked myself and, more importantly, other practitioners whether it will make any difference to the way in which most cases will be decided or settled, the response is: precious little. At best, it tells the court to have a little more regard to pensions on divorce and adds emphasis to the powers which the court already has. The fact is that without proper specific machinery for both evaluating and splitting pensions the loss of an actual or potential pension right or benefit will continue to be an imprecise, makeshift argument in most divorce cases. Alternatively, there will continue to be a temptation to defer orders relating to pension benefits, thus storing up

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future litigation for the parties who really want certainty and as clean a break as the law now allows and encourages.

It has been said at previous stages of the Bill that the problem has been recognised and the merits and solutions discussed for over 25 years. In May 1993 there was the publication of a most comprehensive report of an independent working group appointed by the Pensions Management Institute. That diverse body of experts was able to produce a unanimous and authoritative report with firm recommendations. It is therefore unfortunate that against that background the noble Baroness, Lady Young, does not feel able to be a little less cautious. It is a great shame that such scant regard has been had by the Government to the detail of the PMI report.

Many other countries have or are introducing pension-splitting. I suggest that the time has come for this country to make a radical change, certainly something more radical than Amendment No. 225. There is no good reason why a sophisticated society should not be able to provide for pensions acquired in the course of a marriage to be fairly divided and for direct access to a pension fund to minimise litigation and manipulation by the other party. There should be a clear power to adjust designated pension rights and benefits.

Having said that, I recognise the concerns that the noble Baroness, Lady Young, has expressed and the benefits of what she proposes. But I hope that the House will prefer the amendment of the noble Baroness, Lady Hollis. The amendment of the noble Baroness, Lady Young, has the advantage, which practitioners will recognise, of dealing for example with the Armed Forces legislation. It is a great shame that there is not to be an express power, as the PMI report recommended, to provide orders that require the other party to the marriage to take out life assurance to cover loss of potential widow's pension. I support what has been said about the amendments to require direct payment from the pension fund rather than to require the wretched husband to continue to make payments long after the marriage has ended. The reaction of wife No. 2 to seeing a monthly cheque stub or standing order in favour of wife No. 1 may well be enough to send him into the arms of wife No. 3.

I hope that before this Bill leaves the House the Government will look again at the PMI Report to see what more can be done.

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