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Third Reading

Part of Marriage (Same Sex Couples) Bill – in the House of Lords at 3:16 pm on 15th July 2013.

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Photo of Baroness Stowell of Beeston Baroness Stowell of Beeston Lords Spokesperson (Department for Work and Pensions), Lords Spokesperson (Women & Equalities), Baroness in Waiting (HM Household) (Whip) 3:16 pm, 15th July 2013

My Lords, I will speak also to Amendments 2 to 5, on the subject of occupational pension benefits. I am grateful to my noble friend Lord Lester, the noble Lord, Lord Alli, and the noble Baroness, Lady Royall, for adding their names to this group of amendments.

The Government have listened carefully and understand the concern that has been expressed that same-sex married couples will be in a different position from opposite-sex married couples as regards occupational pension benefits. The effect of the difference in treatment, which is permitted under the exception in Schedule 9 to the Equality Act 2010, is that currently civil partners and, by virtue of the provision made in Schedule 4 to this Bill, people married to someone of the same sex may not benefit from their civil partner or spouse’s pensionable service prior to 2005 in respect of any survivor benefit payable on the death of their civil partner or spouse.

We discussed this issue at some length in Committee and on Report, when we had a full debate on Amendments 84 and 84A, tabled by the noble Lord, Lord Alli. I am grateful to him and other noble Lords for highlighting this important issue and for engaging in constructive discussions during the passage of the Bill, which have led us to bring forward this group of amendments.

I will begin by making clear that we are talking here about which period during which contributions were actually made to a pension scheme will be taken into account when calculating survivor benefits on the death of the pension scheme member. Therefore, this issue does not affect people whose pensionable service began in 2005 or later. For those whose pensionable service began prior to 2005, the concern is that contributions that they have made will not benefit their partner on their death. I should also make clear that if the Government were confident that equalising these benefits was straightforward and sustainable, we would be happy to support a move towards equalisation. But as a matter of principle, and as I have explained previously, successive Governments have avoided imposing retrospective costs on pension schemes, particularly private sector pension schemes, which have not been taken into consideration in their funding assumptions.

It would be irresponsible of any Government to commit themselves to imposing potentially significant costs on businesses and the taxpayer without first undertaking an assessment of all the implications and knock-on effects, and assessing the scale of the costs involved. This group of amendments therefore requires the Government to arrange a review of the differences in survivor benefits in occupational pension schemes between opposite-sex couples and same-sex couples in legal relationships, both marriage and civil partnership. It will look at the issue in the round and will include looking specifically at the effect of eliminating differences in treatment because of sexual orientation in terms of survivor benefits between people married to someone of the opposite sex and people married to someone of the same sex. I can therefore assure the House that the review will include an exploration of the issue which is the focus of the concern of the noble Lord, Lord Alli.

As I have said, we must also look at the full costs and implications of any change. This means looking at the effect of equalisation across the board, because any changes made for one group could have significant wider implications. The review will therefore also consider the differences in treatment between widows and widowers of marriages of opposite-sex couples and the impact of removing the current exception permitting these gender-based differences of treatment provided by Section 67 of the Equality Act. It is important to emphasise, however, that these existing gender-based differences in treatment for widows and widowers in relation to survivor benefits arise from changes that have been made over time as a result of societal change. These longstanding differences reflect the historical fact that in the past many women were not economically active and relied on their husbands for their pension. These differences are therefore not consequences of the measures in the Bill, but it is important that the review considers all the interdependencies between the arrangements for different groups in occupational pension schemes in the round.

It is also important that interested parties are consulted and that all relevant voices are heard. The review will also therefore include consultation with those interested parties that the Secretary of State considers appropriate. This point was raised by my noble friend Lord Higgins. I can assure him and the House that consultation will include, for example, pension scheme trustees and industry bodies, as well as organisations representing the interests of lesbian and gay employees.

Following this comprehensive review, the amendments require the Secretary of State to publish a report of the outcome before 1 July 2014. The amendment also includes an order-making power. This ensures that if on consideration of the outcome of the review the Secretary of State thinks that the law needs to be changed in order to reduce or eliminate differences between survivor benefits, this can be achieved through secondary legislation, subject to the affirmative procedure.

I hope that these amendments reassure the House that we have listened to the strength of feeling on this issue and have responded in good faith with a sensible and measured way forward. The Government’s amendments will ensure that if we were to make any changes to the existing arrangements for differences in survivor benefits we would do so with an understanding of the full implications of such changes and of the potential costs both to schemes and to the taxpayer. I beg to move.