Pensions (Divorce)

– in the House of Commons at 3:42 pm on 25th January 1995.

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Photo of Harry Cohen Harry Cohen , Leyton 3:42 pm, 25th January 1995

I beg to move, That leave be given to bring in a Bill to amend the law so as to provide for the equitable division of pensions in the event of divorce. I introduced this Bill at the end of the previous parliamentary year, on 1 November, but because that happened at the end of the Session, it fell and it was not even possible to publish it. I hope to make better progress this year. I do not wish to restate all the provisions of the Bill, as they were contained in my speech of 1 November and can be read in Hansard, but I shall restate its main purpose and principles.

The Bill seeks a fairer distribution of assets, especially pension assets, in the event of divorce. The current system is unfair, because at present most pension fund rights are personal to the individual in the fund. On divorce, husbands often walk away with all the pension assets, while wives get nothing. One has a prosperous future; the other faces hardship.

In England and Wales, the decision whether to include pension rights in an overall settlement is entirely at the discretion of the court. More often than not, the court ignores those pension assets, either because they are not brought to its attention or because it comes up against the obstacle in the current law that it cannot overrule pension fund trustees and divide an individual's pension assets.

That is not the case in Scotland, Germany, Canada and elsewhere. In those countries, all assets, including pension assets, are considered as comprising the matrimonial assets, and divided equitably. That is what my Bill seeks for England and Wales.

The court would have the power to reallocate occupational and personal pension rights between the divorcing parties. It could arrange for a transfer payment from the pension fund member's account to the account for the benefit of the divorced spouse. She would then have a pension in her own right.

On "Women's Hour" last month, there was a statement from the Minister's office about that matter. It repeated the assertion that there is no clear evidence of the problem, that more research is needed, and that a survey had been commissioned to report at the end of 1995. That sums up the Government position.

I disagree—there is plenty of evidence. Two major reports have said that there is a strong case for a change in the law—that of the Pensions Management Institute in May 1993 and the Goode report in September 1993. The National Association of Pension Funds has added its weight in favour of a revision of the law.

The organisation Fair Shares says that it has counseled many more than 1,000 women in that situation, many of whom are desperate and forced to depend on the state against their will. Fifty-two per cent. of the organisation's members have no pension rights, in spite of having been married for a long time. Others, who receive the family house in a divorce trade-off, also receive the outstanding mortgage, and find themselves trapped on income support, with the permanent threat of losing that house.

"Women's Hour" gave some examples. One was of a 72-year-old disabled woman, who was married for more than 40 years. Her ex-husband receives a £25,000-a-year pension. He pays her £4,000 a year, but she is deeply anxious that, when he dies, her maintenance will end and she will be left destitute. Another woman described that general denial of pension rights as a "double betrayal"—first by her partner, then by the law.

There is plenty of evidence in my mail of the problem; I have received many letters about the subject. Mrs. M of Devon wrote: I knew my husband for 50 years and we were married for 45 years…During the divorce proceedings, his company would not divulge his pension rights. He paid up at first, but soon after, he remarried and the money was stopped.

Mrs. K of Bedfordshire was married for 32 years and, similarly, her husband stopped paying maintenance. She writes: I have no savings whatsoever. Just what does one do? Fall back on the State? Mrs. P of Essex was married for 20 years. She says: My husband has informed me he intends to leave me…to buy a bigger boat and live on that by himself. I asked about his pension and whether he would give me half…He said there is no way he will pay me any of his pension. This pension will amount to tens of thousands of pounds…plus a sizeable monthly income. Indirectly I feel I have been paying towards that pension but legally have no rights or access to it whatsoever. His financial future is assured. Mine holds nothing but question marks and fright". Mrs. W of Essex said: I divorced my husband after 31 years of domestic violence, mental cruelty and also living with a husband who was a pervert. It is the same story—she then had no rights to his pension.

Mrs. M of the Isle of Wight, married for 43 years, with five children, went to court to obtain her pension rights and found herself denied legal aid. When she applied, she was refused, on the grounds that your prospects of deriving any benefit from defending the divorce petition are too slight to justify the issue of a certificate. Her husband, incidentally, with a larger pension, obtained his legal aid for the proceedings.

After 27 years of marriage, Mrs. L of Truro lost her pension rights under the existing law. She states: Through no fault of my own I now face a future of emotional and financial insecurity…In Scotland and in several other countries the courts have the power to divide a pension on divorce, and recent reports have urged the Government to alter the law in England and Wales to grant women their fair share of the pension to which they have contributed in kind. My experience shows that the courts cannot be relied upon to use the powers embodied in the Matrimonial Act to protect women in my situation. There is no substitute for an index-linked pension". There is plenty of evidence, and it is crystal clear—the Government must know that.

The Government's survey, which is to report at the end of 1995, merely kicks the matter into touch for another decade. The Pensions Bill is before Parliament this year. If the change is not made now, there will not be another Bill and another opportunity for many years. I understand that an amendment to the Bill is to be tabled in the House of Lords and that it will be supported by peers from all parties. In the interests of fairness, I urge the Government to accept such an amendment and such a change.

In my last few seconds, and as it is Burns night, I thought that I would quote a bit of Burns, like the true cockney I am, and tell the Government not to be a Wee, sleekit, cow'rin', tim'rous beastie, and accept the legislation, so that Should auld acquaintance be forgot, it can be a case of O, gie the lass her fairin', lad".Question put and agreed to.

Bill ordered to be brought in by Mr. Harry Cohen, Mr. Tony Banks, Mr. Malcolm Chisholm, Mr. Jeremy Corbyn, Ms Jean Corston, Mr. Neil Gerrard, Ms Mildred Gordon, Mr. Bernie Grant, Mrs. Helen Jackson, Mrs. Alice Mahon, Ms Clare Short and Mrs. Audrey Wise.