Part of Pensions Bill – in a Public Bill Committee at 1:30 pm on 21 February 2008.
I beg to move, That the clause be read a Second time.
It is my duty to give my hon. Friend the Member for Eastbourne the odd rest during our proceedings as he has borne the brunt of our efforts for a while.
New clause 21 would ensure that there are provisions for the sharing of personal accounts on divorce or the ending of a civil partnership. It has been supported by the Equality and Human Rights Commission, and I am grateful for the brief that it provided.
The new clause is simple. I am well aware of the concerns expressed by both Ministers, and indeed by Tim Jones and Paul Myners of the Personal Accounts Delivery Authority in the evidence sessions, that we need to keep the administration of personal accounts simple. They do not want a mass of transfers in and out, which I believe are barred until 2017. If there is a criticism of new clause 21, it is probably that it is modest in scope, too restrictive and would not help enough people because it relates only to couples when they both have a personal account. The issue is not easy, and we are not talking about new money coming into the personal account scheme or money going outside in its entirety.
Paragraph (b) allows transfers by mutual consent, which I hope the Minister has noted. That is important because I learned from the Equality and Human Rights Commission briefing that although pension sharing rules on divorce were introduced in December 2000—since they were introduced there have, sadly, been more than 1 million petitions for divorce—figures from the Department for Constitutional Affairs reveal that in the year to September 2007, less than 8 per cent. of divorcing couples obtained pension-sharing orders. That tells me that there is a real problem in this area, and that an asset, which in many cases may be worth as much or perhaps more than the former matrimonial home, is not being fairly shared. A wife may have contributed greatly to a marriage over many years or may have taken time off to look after children or a sick relative, and it is absolutely right and important that she should enjoy the proceeds of pension contributions to which she has a right, given her part in the marriage over many years. This is an area that couples often find contentious, and believe will be complicated, or perhaps they are not even aware that it is possible to have a claim on a former spouse’s pension.
I hope that the new clause commends itself to the Minister. I know that there is a bar on transfers before 2017, but I repeat that we are not talking about transfers out of or into the personal account scheme. We are talking only about changing the fair sharing of pension pots within the personal account scheme. I think that in 2017 it would probably be necessary to go beyond the provisions in new clause 21 and perhaps look at other cases. I hope that the Minister, perhaps when he replies, will give the Committee an indication of whether the review of transfers in and out, in 2017, will take into account that very important aspect.
I hope that I have set out where we are coming from in tabling new clause 21. I hope that the Minister realises the seriousness of the matter, given that, as I have just said, less than 8 per cent. of divorcing couples currently obtain pension sharing orders. If he cannot accept the new clause, as drafted, I hope very much that he will reassure us that the Government are aware of the importance of the matter and intend to do something about it.