New Schedule 2

Pensions Bill – in a Public Bill Committee at 2:00 pm on 21st February 2008.

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‘Pension compensation on divorce etc: Scotland

1 The Family Law (Scotland) Act 1985 (c. 37) is amended as follows.

2 In section 8 (orders for financial provision)—

(a) in subsection (1)—

(i) after paragraph (baa) insert—

“(bab) a pension compensation sharing order;”,

(ii) after paragraph (ba) insert—

“(bb) an order under section 12B(2);”,

(b) subsection (4A) is repealed,

(c) after subsection (7) add—

“(8) The court shall not, in the same proceedings, make both a pension compensation sharing order and an order under section 12B(2) in relation to the same PPF compensation.

(9) The court shall not make a pension compensation sharing order in relation to rights to PPF compensation that—

(a) derive from rights under a pension scheme which, at the time the Board of the Pension Protection Fund assumed responsibility for the scheme, was subject to an order made under section 12A(2) or (3) in relation to the marriage or (as the case may be) civil partnership or a previous one between the same persons,

(b) derive from rights under a pension scheme which were at any time the subject of a pension sharing order in relation to the marriage or (as the case may be) civil partnership or a previous one between the same persons,

(c) are or have been the subject of a pension compensation sharing order in relation to the marriage or (as the case may be) civil partnership or a previous one between the same persons, or

(d) are or have been the subject of an order made under section 12B(2) in relation to the marriage or (as the case may be) civil partnership or a previous one between the same persons.

(10) Where, as regards PPF compensation, the parties to a marriage or the partners in a civil partnership have in effect a qualifying agreement which contains a term relating to pension compensation sharing, the court shall not—

(a) make an order under section 12B(2); or

(b) make a pension compensation sharing order,

relating to the compensation unless it also sets aside the agreement or term under section 16(1)(b) of this Act.

(11) For the purposes of subsection (10)—

(a) the expression “term relating to pension compensation sharing” is to be construed by reference to section 16(2AA) of this Act; and

(b) a qualifying agreement is one to which section 84(2) of the Pensions Act 2008 relates.”

3 After section 8A insert—

“8B Pension compensation sharing orders: apportionment of charges

The court may include in a pension compensation sharing order provision about apportionment between the parties of any charge under section 91 of the Pensions Act 2008 or under corresponding Northern Ireland legislation.”

4 In section 10 (sharing of value of matrimonial property or partnership property)—

(a) in subsection (5A), for the words from “compensation payable” to “that Chapter” substitute “PPF compensation”,

(b) for subsection (8B) substitute—

“(8B) The Scottish Ministers may by regulations make provision for the purposes of this Act about—

(a) calculation and verification of PPF compensation,

(b) apportionment of PPF compensation.

(8C) Regulations under subsection (8B) may include provision—

(a) for calculation or verification in a manner approved by a prescribed person,

(b) by reference to regulations under section 86 of the Pensions Act 2008.”

5 In section 12A (orders for payment of capital sum: pensions lump sums), in subsection (7ZC), for the words “Notwithstanding the provisions of section 8(4A), for” substitute “For”.

6 After section 12A insert—

“12B Order for payment of capital sum: pension compensation

(1) This section applies where the court makes an order under section 8(2) for payment of a capital sum (a “capital sum order”) by a party to a marriage or a partner in a civil partnership (“the liable person”) in circumstances where the matrimonial or (as the case may be) partnership property within the meaning of section 10 includes any rights to PPF compensation.

(2) On making the capital sum order, the court may make an additional order requiring the Board of the Pension Protection Fund, if at any time any payment in respect of PPF compensation becomes due to the liable person, to pay the whole or part of that payment to the other party or (as the case may be) other partner (“the other person”).

(3) Any such payment by the Board of the Pension Protection Fund—

(a) shall discharge so much of its liability to the liable person as corresponds to the amount of the payment, and

(b) shall be treated for all purposes as a payment made by the liable person in or towards the discharge of the person’s liability under the capital sum order.  

(4) Where the liability of the liable person under the capital sum order has been discharged in whole or in part, other than by a payment by the Board of the Pension Protection Fund, the court may, on an application by any person having an interest, recall the order or vary the amount specified in such an order as appears to the court appropriate in the circumstances.

(5) The court may not make an additional order under subsection (2) in relation to rights to PPF compensation that—

(a) derive from rights under a pension scheme which, at the time the Board of the Pension Protection Fund assumed responsibility for the scheme, was subject to an order made under section 12A(2) or (3) in relation to the marriage or (as the case may be) civil partnership or a previous one between the same persons,

(b) derive from rights under a pension scheme which were at any time the subject of a pension sharing order in relation to the marriage or (as the case may be) civil partnership or a previous one between the same persons,

(c) are or have been the subject of a pension compensation sharing order in relation to the marriage or (as the case may be) civil partnership or a previous one between the same persons, or

(d) are or have been the subject of an order made under subsection (2) in relation to the marriage or (as the case may be) civil partnership or a previous one between the same persons.”

7 In section 13 (order for periodical allowance), in subsection (2)(b), after the words “pension sharing order” insert “or pension compensation sharing order”.

8 In section 16 (agreements on financial provision)—

(a) in subsection (2)(b), for the words “does not contain a term relating to pension sharing” substitute “contains neither a term relating to pension sharing nor a term relating to pension compensation sharing”,

(b) in subsection (2)(c), after the word “sharing” in the first place where it occurs insert “or pension compensation sharing”,

(c) in subsection (2)(c)(i), after the word “sharing” insert “or (as the case may be) the term relating to pension compensation sharing”,

(d) after subsection (2A), insert—

“(2AA) For the purpose of subsection (2), a term relating to pension compensation sharing is a term corresponding to provision which may be made in a pension compensation sharing order and satisfying the requirements set out in section 84(1)(g) of the Pensions Act 2008.”

9 In section 27 (interpretation)—

(a) in subsection (1), before the definition of “pension sharing order” insert—

““pension compensation sharing order” is an order which—

(a) provides that one party’s shareable rights to PPF compensation be subject to pension compensation sharing for the benefit of the other party, and

(b) specifies the percentage value to be transferred;”,

(b) after subsection (1A) insert—

“(1B) In subsection (1), in the definition of “pension compensation sharing order”, the reference to shareable rights to PPF compensation is to rights in relation to which pension compensation sharing is available under Chapter 1 of Part 3 of the Pensions Act 2008 or under corresponding Northern Ireland legislation.

(1C) In this Act—

“PPF compensation” means compensation payable under the pension compensation provisions,

“the pension compensation provisions” means—

(a) Chapter 3 of Part 2 of the Pensions Act 2004 and any regulations or order made under it,

(b) Chapter 1 of Part 3 of the Pensions Act 2008 and any regulations or order made under it,

(c) any provision corresponding to the provisions mentioned in paragraph (a) or (b) in force in Northern Ireland.”’.—[Mr. Mike O'Brien.]

Brought up, read the First and Second time, and added to the Bill.

Ordered,

That certain written evidence already reported to the House be appended to the proceedings of the Committee.—[Mr. Mike O'Brien.]

Photo of Mike O'Brien Mike O'Brien Minister of State (Pension Reform), Department for Work and Pensions

On a point of order, Sir Nicholas. We seem to have moved ahead at full steam and I had not thought that I would not be here for this part of our proceedings. However, everything has progressed faster than any of us perhaps expected, so I am here, and I am pleased that I am.

Members of the Committee are grateful to you, Sir Nicholas, and to your colleague, Mrs. Anderson, for your firm and fair steering of the Committee over the past three weeks. It has been a pleasure to serve as a member of a Committee chaired by you both. I would also like to extend warm thanks to all members of the Committee, especially my hon. Friends, but also Opposition Members, especially the hon. Members for Eastbourne, for South-West Bedfordshire, for Rochdale and for Inverness, Nairn, Badenoch and Strathspey, all of whom have made Front-Bench contributions. I particularly pay tribute to the hon. Member for Ryedale, who, along with the hon. Member for Bromsgrove, has made significant contributions with his knowledge and skill.

I thank my colleagues for their help. Pensions matters can get tedious, but I am sure that they have got through a lot of correspondence and that their constituents are well informed as a result. The debate has dealt with some important issues that will affect many millions of people. It is important that we deal with this in as consensual a way as possible and that we bring together stakeholders.

I was particularly pleased that we were able to have the oral evidence sessions at the beginning of our consideration of the Bill. A number of organisations were able to come forward: the ABI, Age Concern, the ACA, the BCC, the CBI, the EEF, and lots of other initials. The Equality and Human Rights Commission, the Federation of Small Businesses, Help the Aged, Which?, the TUC, the Pensions Policy Institute and others were all able to inform our debate. The result has been that the quality of the debate from both sides has been particularly good. The information that we received from the three pensions commissioners who gave evidence was invaluable, as was the help that we received from Paul Myners and Tim Jones from the Personal Accounts Delivery Authority. I thank them all for their contributions.

I thank the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Warwick and Leamington, for his contributions, and I extend a particular word of thanks to my Parliamentary Private Secretary, my hon. Friend the Member for Coventry,  South, and also to our Whip, who has made a very welcome contribution at various stages of our proceedings. I also wish to extend my grateful thanks to the officials in my Department who have briefed me, the parliamentary counsel who drafted the Bill with expertise, the police and other officials, Hansard and the Clerk of the Committee, all of whom have ensured that we were able to carry through an important Bill with a great deal of proper consideration and detailed understanding by members of the Committee. Our proceedings have taken place in a spirit of goodwill, good humour and consideration. I hope that we can look forward to the rest of the Bill’s progress through the House and the other place being conducted in a similar way.

Photo of Nigel Waterson Nigel Waterson Shadow Minister, Work & Pensions

Further to that point of order, Sir Nicholas. May I add my thanks to those of the Minister to your and your fellow chairman—I hope that you will pass those thanks on to Mrs Anderson—and to all the officials, the Hansard writers, the Clerks, the police and all the other staff who have made this such a smooth running Committee? I would like to thank the Ministers for their unfailing courtesy and their amazing ability to keep a straight face while advancing the most preposterous arguments—it was quite an achievement, but they have both had a lot of practice.

Mr. O'Brien rose—

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

Order. I am not sure that there can be an intervention on a point of order.

Photo of Nigel Waterson Nigel Waterson Shadow Minister, Work & Pensions

I would like to thank the Labour members of the Committee, particularly the Whip—the velvet fist inside the velvet glove. The hon. Member for Caerphilly has been the big cheese, as it were, of the Committee. He kept us all running to time, or slightly ahead of time, in fact.

I usually try to enliven these events by trawling through hon. Members’ biographies that are on the internet, but this time there have been fairly slim pickings. However, I was taken aback by the unconscious irony of the hon. Member for Brent, South, who sadly is not here. Her biography says:

“From an early age I knew that as a woman in a male dominated society you have to be active and assertive, or else you won’t be heard. I am part of a generation who grew up in the Thatcher years and didn’t like it.”

There is a bizarre contradiction there. Obviously she thought that the Thatcher years were those of a male-dominated society.

The Liberal Democrats, as always, have enlivened our debates. I referred before to the fact that the constituency of the hon. Member for Inverness, Nairn, Badenoch and Strathspey includes part of Loch Ness. It is rather reminiscent of Liberal Democrat pensions policy: sometimes through the mist we thought that we perceived a shape, but then we rubbed our eyes and saw that there was nothing there at all.

I thank my colleagues on the Committee. To match the efforts of the Government Whip, we have had to have two different Whips: my hon. Friends the Members  for Peterborough (Mr. Jackson) and for Rochford and Southend, East, both of whom served the Committee admirably and well. I pay particular tribute to my hon. Friend the Member for South-West Bedfordshire, who has worked extremely hard on a large part of the Bill. He brought his own expertise to discussions about the Territorial Army, among other things, and his personal commitments and beliefs to some of the other issues, too.

I am also grateful to my hon. Friend the Member for Ryedale, who has brought enormous experience and expertise to the Committee. In fact, sometimes I thought that he was doing a better job than Ministers in responding to some points. I also thank my hon. Friend the Member for Bromsgrove, who talked passionately about the pensions victims in her own constituency. I know that she has followed these issues closely for some time.

I entirely agree with the Minister about the benefits of oral evidence. There might be Bills on which that might not be so helpful, but in this case it put into context a lot of the discussions that we were to have. There were times when we had a big array of witnesses and they were almost all very helpful indeed. However, for those involved in pensions, life is one long seminar and I see the Committee as just another stage in that process. Of course, there is another seminar in a week or two, which has been organised by the indefatigable Pensions Policy Institute, to talk about means-testing and so on, so life goes on. Really, this is all part of the same process for people in the pensions world.

We regret that some of our more sensible ideas were not embraced by the Government, but as I have said before, we have pencilled them in for the pensions Bill that will be introduced under the next Conservative Government in a year or two. I thank you, Sir Nicholas, for your unfailing courtesy and helpfulness in allowing this Committee stage to go so well. We look forward to the next pensions Bill.

Photo of Paul Rowen Paul Rowen Shadow Minister, Work & Pensions

Further to that point of order, Sir Nicholas. May I also thank you and your co-Chair for the efficient and courteous way in which you have conducted proceedings? This has been my first pensions Bill, although I know that many hon. Members here have been through several and survived. We all are indebted to the Clerks, who assisted us in ensuring that our amendments made it on to the amendment paper. I am also grateful to members of Hansard and the police, who have helped to make our proceedings go well.

I would also like to thank the two Ministers. We have had a continuous dialogue throughout the Committee and have regularly had copies of letters that the Ministers have sent on issues that we have raised, so I thank them for that. I genuinely feel that we have had a proper dialogue in which they have agreed to change and look at various things. That demonstrates the best aspects of the Committee system, when everything is not a closed book and is open to debate.

Again, I support what has been said about the involvement of outside bodies in the oral evidence sessions, which informed the debate considerably. I have particularly enjoyed listening to the hon. Member for Ryedale, who obviously knows a great deal more  about pensions than I do. I thank the Government Whip and Labour and Conservative Members for the pleasant way in which we have gone about the proceedings.

Photo of John Greenway John Greenway Conservative, Ryedale

Further to that point of order, Sir Nicholas. I endorse everything that has been said and I am grateful for the comments that have been made about my contributions. However, there is one serious point that I want you to take from the Committee, given your membership of other Committees. I must confess that I found the evidence session, which preceded our normal scrutiny of the Bill, an extremely enlightening and constructive experiment. I have thought back to the first time that I was in Committee Room 10 in the autumn of 1987 when we were sitting on the other side of the room and not allowed to say anything. The yah-boo-sucks politics that took place in Standing Committees in those days was unconstructive, unhelpful and did not improve the quality of legislation. One of the reasons why this Committee has been so constructive and has ended up with better arguments is that so many issues were brought out in public during the evidence sessions.

From an Opposition point of view, in wanting to give the Government a run for their money, a lot of the foxes that we might have run with were shot by some of the evidence that we received. However, given that the collective objective of these occasions is to end up with better legislation, I would urge you, Sir Nicholas, to ensure that when decisions are taken in this place, the voice of reason calling for more oral evidence sessions at the start of Public Bill Committees should be heeded with real vigour. I know that you will share my view and that we can leave it in your capable hands to make sure that point is duly registered.

Photo of Mike O'Brien Mike O'Brien Minister of State (Pension Reform), Department for Work and Pensions 2:15 pm, 21st February 2008

Further to that point of order, if you will permit me, Sir Nicholas. I do not want to delay the Committee, but you ought to be aware of a minor incident that occurred during the course of these proceedings yet might have escaped your notice. At one stage, the hon. Member for South-West Bedfordshire put forward a very constructive point to which my hon. Friend the Under-Secretary responded by reading the wrong note and setting out an answer to a point that was not raised—he did so with great eloquence. Interestingly, the hon. Member for South-West Bedfordshire said in response that he was greatly  reassured. I can therefore say that the spirit of co-operation and constructive engagement during the course of this Committee has been unlike anything that I have ever experienced. Our proceedings have been very good humoured and I am grateful for that.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

The Chairman of a Committee always gets the last word.

May I thank members of the Committee for their generous comments about myself and my co-Chairman, Janet Anderson, which I shall pass on to her? I am sure she will be as happy as me to have received such generous comments.

I congratulate the Committee on the work that it has done during the past month. It has been a great pleasure to chair this Committee, and I would like to thank all members of the Committee, particularly the Front-Bench Members—that includes the Liberal Democrats, of course—and those with special knowledge. For example, the hon. Member for Ryedale has added very considerably to the knowledge of the Committee, which, ultimately, has been to the benefit of the legislation that we have been considering line by line. The hon. Member for Bromsgrove and even the hon. Members for Stoke-on-Trent, South and for South Ribble have put forward proposals succinctly that have added to the tenor and constructive nature of the debate.

I thank my Clerk, and those who have sat in when he has not been here, for their support and advice. I also thank the Official Report and the police: clearly they have added to the way this particular Public Bill Committee has gone so smoothly.

I think that this Committee has been an example to the people of this country of how Parliament actually can, in the right situation, do the job that it is here to do. We have considered a very important piece of legislation line by line. It has been done constructively. The usual channels have worked together and—uniquely one might say—the programme order has proved to be adequate, although, sadly, on many other occasions such orders are not. I believe that this Committee and the way the Government and the Opposition have worked together are examples that I hope will be understood and taken to heart by the House. I congratulate all Members on the contributions that they have made.

Bill, as amended, to be reported.

Committee rose at nineteen minutes past Two o’clock.