Marriage (Same Sex Couples) Bill

Baroness Royall of Blaisdon Excerpts

Wednesday 10th July 2013 Lords Chamber

[Baroness Lister of Burtersett]

My Lords, I support the first amendment for reasons of principle, about which the noble Lords have spoken. The principle of equality is very important. It seems to me that, in Committee, the Minister was unable to respond with any arguments at all based on principle. They were purely pragmatic arguments, which I do not think noble Lords found very convincing.

Amendment 84A, which I support, is very much in line with the recommendation of the Joint Committee on Human Rights, which argued that,

“we consider that the Government should carry out a full review of pension provisions in relation to survivor pension benefit entitlements of same sex married couples and civil partners to ensure that there is no unjustifiable discrimination in pension scheme provisions”.

[Baroness Royall of Blaisdon]

My Lords, I have added my name to manuscript Amendment 84A, tabled by my noble friend Lord Alli, because we believe that this is the most sensible course of action at this stage. Like my noble friend, we want to ensure that there is no discrimination in the Bill and that there are not two tiers of marriage. I, too, am extremely grateful to the Minister for managing to arrange a meeting with the Pensions Minister yesterday.

We have always accepted that there would be some direct cost to private pension schemes. However, £18 million, which is the figure often quoted, is a drop in the ocean for schemes worth an estimated £76.4 billion. The Government have asserted that equalising pensions benefits for civil partners and married couples of the same sex after this Bill could leave the public sector liable for costs of up to £3 billion to £4 billion. However, they have been far more reluctant to explain where those costs might come from.

As my noble friend said, the Government have already acted to equalise survivor benefit entitlements for civil partners with those of widowers for public sector and contracted-out schemes. The £3 billion to £4 billion estimate is based on the assumption that the removal of the legal exemption for civil partners will leave the Government being forced to equalise the entitlements of widowers with widows, thus levelling everyone back to 1978. But why they believe this to be a significant risk remains unclear.

The 1978/1988 distinction between widowers and widows was based on the historic position of women as being largely dependent on their husbands for income. Indeed, the courts have only recently upheld this distinction in the case of R v Iain Cockburn and Secretary of State for Health, where the judge ruled that there was an “objective and reasonable justification” for this because there had been, as the Government argued, a progressive realisation of gender equality and the initial rules had been set up to recognise the weaker economic position of widows.

Without the provision within this Bill, female spouses of same-sex marriages would, we presume, simply be treated as widows for the purposes of survivor benefits and male survivors as widowers. But nothing in my noble friend’s Amendment 84 would affect the historic male/female distinction that the courts have so recently upheld. To argue against this on the basis of retrospectivity is also flawed as the Government violated this principle themselves when levelling civil partners back to the entitlements of widowers, as they quite rightly did for public service pensions and contracted-out schemes.

In some sense, it could be said that by creating a different entitlement for widows and widowers of same-sex marriages from those of opposite-sex couples the Government are actually weakening their case against future challenges to widow/widower distinction. However, despite agreeing with my noble friend that the Government’s argument here is extremely tenuous, we want to offer the Government an opportunity to remove this inequality in the most appropriate way, as noble Lords on the Benches opposite have also said, and that is why I have added my name to the manuscript amendment today.

By voting for Amendment 84A, noble Lords will be saying, “We are not happy about the provisions within the Bill as it stands so we are leaving them there in parenthesis, as it were, for now until the Government have come forward with firm proposals for how to deal with this clear inequality”. It is quite clear to us that, one way or another, the Government will have to sort this out. It is better to do this through a process that they can own rather than be forced by the courts to do it later, as undoubtedly they would have to do.

I urge the Minister to accept Amendment 84A. I realise that the Government may well have to come back with tweaks at Third Reading but we want to right this inequality and this is a very fine way forward. It gives the Government some space to reflect, to look, to review and then come back, using the order-making power, to get rid of this inequality. I trust that the Minister will be able to accept this amendment.

[Baroness Stowell of Beeston]

My Lords, I must first say to my noble friend Lord Elton that I am in charge of many things at the moment, but one thing I am not in charge of is flooding. I would rather not add that to my portfolio for now. Before I respond in detail to the debate, I need to make a correction to the figures previously used by the Government in debates on this issue, about the number of schemes using the Equality Act exception relating to civil partners. The Government had stated that two-thirds of private occupational pension schemes already go further than the 2005 exception. This is incorrect. The correct figure is one-third. However, this does not change the estimated £18 million increase in liabilities that would arise from removing this exception, as that was already based on one-third of schemes.

The pensions system as a whole is full of differences in treatment as a result of changes in society and social attitudes. Such changes are introduced prospectively, so as not to place new unfunded burdens on pension schemes which could not have been taken into consideration in their funding assumptions. The current Equality Act exception, which this Bill also applies to people in same-sex marriages, recognises that pension outcomes in the present always reflect different accruals in the past, and that changes should be forward looking, rather than be retrospective.

Governments of all parties have sought to equalise pensions over time. What they have not done is try to equalise pension outcomes in the present, thereby breaking the link between past accruals and present outcomes. The standard approach is based on the principle that it is not right to impose costs on schemes, meaning they would have to pay out new amounts that were not promised in the past, whatever the exact scale of those costs.

Avoiding imposing retrospective costs on pension schemes is the standard principled approach which has been taken by successive Governments. That is the approach the previous Government took when civil partnerships were introduced in 2005, and when they brought forward the Equality Act in 2010. That is the approach we have taken in this Bill, by aligning the pension position of same-sex married couples with that of civil partners.

This approach means that pension schemes take time to catch up with societal changes, but over time the anomalies reduce and eventually disappear. Making any change to the position set out in the Bill would mean placing retrospective costs on the schemes. The Government understand that the current position is not perfect, but it is based on the principle that we should not seek to impose retrospective costs on private pension schemes—costs that were not planned for when benefits were being accrued.

The noble Lord, Lord Alli, seemed to try to dismiss the arguments that I was going to put forward before I had even had the opportunity to do so, but the Government’s case is quite clear. It is a strong one and I shall go through it properly. The two amendments in this group have different effects, as we have already established. Amendment 84, moved by the noble Lord, Lord Alli, would mean employers having to pay survivor benefits to civil partners in respect of their deceased spouse’s service prior to 2005, when civil partnerships first became possible. This amendment does not meet what I believe the noble Lord is trying to achieve, which is to give parity in provision of survivor benefits between same-sex married couples and opposite-sex married couples.

As well as going against the standard principled approach of avoiding imposing retrospective unfunded burdens, removing the current exception in the Equality Act would potentially lead to a much wider range of discrimination claims against pension schemes. There would be a significant risk of a domino effect, leading to full equalisation of survivor benefits at a significant cost to schemes and the taxpayer. The noble Lord, Lord Alli, said that no public money would be required to make this change. I disagree.

In addition to its impact on private sector schemes, the amendment would also impose a direct cost on public service schemes which would, at least, have to pay survivor benefits to surviving female civil partners based on pre-1988 service. This is because if the amendment were passed, not paying benefits to surviving female civil partners based on pre-1988 service would be discrimination on the basis of sexual orientation. To remove any such discrimination, public sector schemes would have to equalise pension benefits for surviving female civil partners and same-sex married couples with those for widows which are based on accruals from 1978. At the moment, benefits for those female survivors are currently based on accruals from 1988. Therefore, there is an immediate cost to the taxpayer.