Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Oakeshott of Seagrove Bay: My Lords, I am sure that I speak on behalf of my right honourable friend the Member for Northavon in welcoming these amendments which properly reflect the modern world.

Lord Higgins: My Lords, as I was also heavily engaged in the Civil Partnership Bill, perhaps one understands this a bit better than the general public may initially do.

I have just a couple of questions. First, is the noble Baroness saying that the PPF will in some circumstances pay out benefits that the recipients would not have received under the scheme of which they are a member? Secondly, is it proposed to make provision for unmarried opposite-sex couples regardless of whether the scheme of which they are a member and which has been taken over does so? More particularly, will unregistered same-sex couples be in the same position as unmarried opposite-sex couples? I think that that is rather important, not least as far as the intended operation of the Civil Partnership Bill is concerned.

Baroness Hollis of Heigham: Basically, my Lords, we will be giving all widows and widowers 50 per cent rights. I think that there may be one or two schemes that still do not do that, which is very odd, but in that case it is a question of the scheme rules overriding the rules of the scheme. In some cases, widows may receive less than 50 per cent, rather than more, but they will receive 50 per cent under the PPF. Civil partners will, accordingly, be treated in the same way.

Where an existing scheme has survivor's benefits for unmarried partners, regardless of whether it is a heterosexual or single-sex couple, they will take the rules of their scheme into the PPF. In other words, we will not take away any rights that people currently enjoy in their existing scheme. However, if their
 
4 Nov 2004 : Column 479
 
existing scheme does not provide protection for unmarried partners in either heterosexual or single-sex couples, neither will the PPF.

On Question, amendment agreed to.

Baroness Turner of Camden moved Amendment No. 172:

The noble Baroness said: My Lords, in moving Amendment No. 172 in the name of myself and my noble friend Lady Gibson of Market Rasen, I shall speak also to a number of other amendments in this group to which my name has been put: Amendments Nos. 173, 177, 178, 183, 184, 188, 189, 191, 194 to 197 and 200 to 203. I think that, in total, we have 14 amendments in this group, because the specific sentence that we wish to amend occurs about 14 times in the schedule.

The reason for the amendment is that we want to ensure that widow's and widower's benefit paid by the PPF are the same as widow's and widower's benefits would have been had they been paid by the scheme. As I am sure noble Lords will know, different schemes provide greater or lesser proportions of the member's pension to a surviving spouse on the member's death. In order to contract out of the state second pension, the proportion must be greater than 50 per cent.

Many schemes provide two thirds, which is the Inland Revenue maximum. However, the provision in Schedule 7 requires the proportion to be 50 per cent in every case. The purpose of the amendments is to reinstate the proportion as two thirds where that is what the scheme would have paid. I hope that my noble friend will regard this as a reasonable and sensible amendment. I beg to move.

Baroness Noakes: My Lords, I should like to speak briefly in favour of the noble Baroness's amendment, which I think is about fairness to women more than anything else. The provision in the Bill means that, very largely, it is women who will lose out. The noble Baroness referred to schemes that pay out higher amounts than 50 per cent. There are indeed some.

Over the summer, I corresponded with the noble Baroness, Lady Hollis, about a slightly different position where a widow's pension was based on a proportion, but a proportion of the pre-commuted pension of her husband. Consequently, the proportion of the pension that she received was even higher than two thirds, because of the way in which a pension sacrifice had been taken earlier in retirement in order to provide for my mother. If this Bill is passed, her income could be sliced by almost a half. So the Bill could bear very unfairly on people whose expectations are that they will have a certain income level. It could come down very significantly on them.

The Minister said that it is too complicated to take in all the individual arrangements. If it is not too complicated to take in the primary pensioner's arrangements, I cannot see why it should be excessively complicated to take in the arrangements that apply to widowers or indeed dependants.
 
4 Nov 2004 : Column 480
 

2.30 p.m.

Baroness Hollis of Heigham: My Lords, I do not know whether I shall be able to answer the noble Baroness. I may be given the advice that perhaps the noble Baroness should write to me with the circumstances. I am not quite sure where tax-free lump sums came in and so on. Perhaps I may respond to the amendment of my noble friend Lady Turner, which in a sense revisits a previous discussion. Perhaps it should have been grouped with other amendments. If that is the case, the fault lies with me and I apologise.

Essentially, my noble friend is arguing that we should import into the PPF the same level of widows' benefits as existed in the previous schemes. As I say, we did go round this point. I am sorry but we are not going to do that; the PPF will not replicate it. However, our policy mirrors the survivors' benefits offered by the majority: 75 per cent of schemes covering 84 per cent of members of private sector DB schemes will do as we shall be doing. We have tried to keep a balanced package between a meaningful level of compensation and something that is affordable and easy to administer. Some schemes pay less, although I accept that, for the most part, they may pay slightly more.

I am afraid that we have made an administrative decision that the simplest way is to pay 50 per cent because what goes into the PPF is pooled assets. Logically, that could have led to excluding the payment of unmarried partners. We thought long and hard about what we should do there, when some schemes have it and some do not, unlike survivors' benefits. In that exception only—there are still quite strong feelings about it and in some schemes one pays additional money to receive those benefits—we decided that we would import that characteristic into the PPF only in so far as existing schemes had it.

I am afraid I have to say to my noble friend that we believe that what we are offering reflects what the vast majority of schemes do. There are schemes that can be more generous and there are schemes that are less generous. We thought that this was simple to understand and that people would know what their expectations would be after going into the PPF. It would not depend on some complicated assessment of 90 per cent of X and so on.

On the question posed by the noble Baroness, Lady Noakes, the PPF survivors' benefits will be post-commutation. That may help. If she cares to write to me with the details, I shall try to obtain a more careful answer for her. I do not believe that it is unfair to women. On this issue I believe that most women will have a fairly secure and predictable pension.

At the moment individual trustees make quite complicated decisions on whether a child is a dependant when he or she goes to university and such matters. We are trying to establish rules that apply to everyone so that people know what they are and reflect the situation in which they are engaged at the moment. I cannot help the noble Baroness beyond inviting her to write to me if she wishes, except to say that it will apply only to post-commutation.
 
4 Nov 2004 : Column 481
 

To my noble friend I say that I am sorry, but in the name of straightforward administrative simplicity, the only exception where the details of the scheme will affect what comes out of the PPF will be in the situation of unmarried partners.

Baroness Turner of Camden: My Lords, I thank my noble friend for that explanation. I am a little disappointed because, as the noble Baroness, Lady Noakes, said, this relates largely to women. I thank her very much for her support. Of course, I am pleased that something is to be done for unmarried couples and I am delighted that same-sex couples will also be looked after in the way indicated by my noble friend. That still leaves widows, in many instances, with a much reduced expectation than they would have had, had the pension scheme still been in existence and able to provide for them. However, it is not my intention to press this matter this afternoon. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 173 not moved.]

Baroness Hollis of Heigham moved Amendment No. 174:


Next Section Back to Table of Contents Lords Hansard Home Page