Marriage (Same Sex Couples) Bill

Baroness Noakes Excerpts

Monday 17th June 2013 Lords Chamber

[Lord Higgins]

My Lords, two themes have run through the debate. On one there is almost universal agreement that we must seek to achieve equality. We also have to recognise that there are differences between the two forms of marriage. Having said that—and I am sorry that I do not carry the noble Lord, Lord Alli, with me—it seems to me that we need effectively to recognise both the need for equality and the point that I have just made. I led from the Front Bench on the Civil Partnership Bill, which was a great step forward. None the less, it is perhaps unfortunate that its terminology did not recognise the aspect of equality, and it has certainly not been recognised by the country as a whole. What we need, therefore, is some recognition that there are two forms of marriage. If we do that, marriage will appear on both sides of the equation, representing equality. As suggested in Amendment 34, we need to have traditional marriage on the one hand, and same-sex marriage on the other. If we do that, we can achieve both of the objectives we seek, and reconcile the differences which have otherwise been apparent in the debate. One hopes that both the gay community and the community as a whole will recognise the status of these two forms of marriage as equal. I see no reason why this can not be done.

[Baroness Noakes]

My Lords, normally I agree with everything my noble friend Lord Higgins says. I am in profound disagreement with him today. He has emphasised that he believes that marriages between same-sex couples and heterosexual couples are different. There are all kinds of marriages that are different: marriages between divorced people; marriages with and without children; death-bed marriages. However, we do not find different terms for those. Noble Lords need to ask themselves serious questions about why they wish to continue to emphasise sexual orientation in the names that they give certain statuses. By perpetuating giving a different name to marriage in the context of gay and lesbian people, we are wishing to continue to regard them as different from us. Inclusion is what this Bill is about, and what we should be about in society generally, because that is what will make us a stronger society.

[Lord Singh of Wimbledon]

My Lords, the legislation itself refers to two different types of marriage. It is there in how it is written. I am concerned that the attempt to find some common ground between deep divisions is being interpreted as some sort of wrecking amendment. The idea of union is fine; it says everything. I cannot see any difference. The English language is very rich in giving precision to meaning, but sometimes it is not precise enough. We do not want to make it less precise. For example, the Indian languages Hindi and Punjabi have different words for “uncle” and “aunt” depending on which side of the couple they come from, the mother’s or the father’s. These words give precision so that you know what you are talking about. Here, if you use the words “union” and “marriage”, that is fine; we know what we are talking about. There is nothing to suggest that one is less equal than the other, which would be totally wrong.

Marriage (Same Sex Couples) Bill

Baroness Noakes Excerpts

Tuesday 4th June 2013 Lords Chamber

[Baroness Noakes]

My Lords, it is a privilege to start our second day of debate on this important Bill. Yesterday our debate was a wonderful demonstration of this House’s ability to tackle difficult issues with restraint and respect, and I hope that we may continue in that vein today.

There are three main reasons why I support the Bill. First, I support it because I am a firm believer in marriage. Enduring relationships between couples, based on love, respect and responsibility, are good for the people involved and, in turn, strong relationships are good for society. Couples who want to share their lives together do not have to get married, and the Bill will not change that, but many value the sustainability and stability that marriage offers. I believe that marriage is a great environment in which to raise children but, for all kinds of reasons, marriage today is not defined by children or even by the possibility of procreation. Marriage is a much bigger concept than that.

Being gay or lesbian is not a lifestyle choice but an essential fact about a small but significant minority. It is as natural for them to seek lifetime relationships with a person of the same sex as it is for most of us to share our lives with an opposite-sex partner. As a happily married woman, I will gladly extend marriage to committed couples who happen to be of the same sex. I genuinely find it difficult to work out why other happily married people want to deny them the privilege of marriage, and I certainly reject the suggestion made yesterday that same-sex couples should invent their own name in place of marriage.

My second reason is that same-sex marriage has popular support. The House of Commons Library note on the Bill makes it clear that polls can be skewed by the questions asked, but the clear evidence from the various polls that have asked straightforward questions about same-sex marriage is that there is a majority, and an increasing one, in favour. The most important feature is that support is huge in the younger age groups, and only those over 65 show net opposition. I hope that noble Lords will reflect today that same-sex marriage will have its greatest impact on age groups that are barely represented in your Lordships’ House.

Freedom is my third reason for supporting this Bill. We have to ask very serious questions about why the law should deny people the freedom to do things that they want to do. Of course, there are strong public policy grounds for stopping people from doing all sorts of things, but I struggle to see what public policy grounds should prevent same-sex couples from being married. If we embrace the freedom to marry in the Bill, it will surely bring happiness to a minority. I have heard nothing in the debate thus far that points to clear and specific harm to other groups in society.

I could have seen a public policy reason for objecting to the Bill if it rode roughshod over the ability of the established religions to maintain their own concepts of marriage, but the quadruple lock arrangements in the Bill seem to me—and to the Church of England, if I read its announcement last month correctly—to provide robust protections for religious freedoms.

Marriage is a great institution that belongs to society as a whole, not to particular groups. Parliament is the right place to guard access to marriage. We have the privilege of a free vote and we must use it with wisdom, for the benefit of society, regardless of our personal preferences. If the noble Lord, Lord Dear, decides to divide the House, I hope that we will respect the clear decision of the other place on a free vote. We can then move on to the job that we are good at, as a revising Chamber, testing all the detailed concerns that have rightly been raised by noble Lords in this debate.

EU Report: Women on Boards

Baroness Noakes Excerpts

Tuesday 13th November 2012 Lords Chamber

[Baroness Noakes]

My Lords, I congratulate my noble friend Lady O’Cathain on her report and on this debate. I support getting more women on boards but I want to achieve that through merit not discrimination. The effort to get women on long lists is fine, but that is where discrimination should end. The debate often equates diversity, which is a good thing on boards, with more women. This is wrong. Female board members are not automatically more diverse than their male counterparts. Concentrating on gender diversity risks losing sight of what real diversity can contribute to board success. The report is brave to say that the economic case for more women on boards has not been made. The enthusiasts have confused correlation with causation, and I hope that Ministers, including my noble friend on the Front Bench this evening, will stick to the evidence in future and not make assertions about improved performance and productivity.

I believe that focusing on the proportion of board membership achieves diversity box-ticking without achieving sustainable change. Because the proportion of executives on boards has declined from around one-half to around one-third over the past 10 years, the focus has therefore been on non-executive appointments. However, in my view the debate needs to shift decisively towards the much more difficult issue of women executives. Why is it that management boards still look unbalanced? Why are the women who are there are often in functional roles rather than general management ones? This is partly about working practices, as the report suggests, but also about culture—as the report also suggests—and the hidden barriers in workplaces and the implicit assumptions about career patterns. These are not areas that board percentages can tackle.

Lastly, I cannot support even a reserve right of Brussels to legislate on quotas. The report should have used a little more Anglo-Saxon directness in telling the Commission where it should put its quotas.

Pensions Bill [HL]

Baroness Noakes Excerpts

Tuesday 15th February 2011 Lords Chamber

[Baroness Noakes]

My Lords, I support this Bill. It is a bit of a ragbag of measures but I think that it has two main themes. The first is the need for pensions to contribute to deficit reduction and, importantly, to the restoration of our economy to a sustainable path for the future. The second is to support the need, which is supported on all sides of the House, to generate more savings to contribute towards retirement.

I shall start with restoring the nation’s financial health. I fully support the proposals in the Bill to increase the state pension age to 66. That is long overdue. Taxpayers currently spend about 5.5 per cent of GDP on state pensions alone. Bringing forward a planned increase of the state pension age will be a useful contribution to controlling the inevitable upward trend in that cost.

My concern is that increasing the age to 66 does not go far enough and that instead we should be looking at accelerating and extending the current plans to increase the state pension age to 68 by 2046. The Government should be bolder and reflect the fact that life expectancy continues to outpace cautious expectations. Can my noble friend the Minister say why the Government are not using the Bill to go beyond this first step of accelerating the age to 66?

Last year, the European Commission published proposals to increase pension age automatically in line with life expectancy. Although I do not think it is any business of the EU to tell member states what they should do in this area, I think that it has some promise as an idea. Do the Government believe that there is merit in creating a more automatic link in future so that further increases in state pension age can be a matter of evidence rather than a matter of politics?

I also support the Government’s decision about converging the pension ages of men and women. I support it despite the small transitional impact on some women, to which other noble Lords have already referred and doubtless more will do so. The initial plan to bring women and men into line was far too leisurely. I never understood why women were allowed to draw a state pension much earlier than men, because their life expectancies have always been longer than those of men. Doubtless that was due to some misguided notion about the weaker sex. Your Lordships' House is proof that such ideas are long past their sell-by date.

Another key aspect of controlling the cost of pensions for taxpayers is dealing with the increasing cost of public sector pensions. Like many noble Lords with an interest in this area, I am looking forward to the final report of the noble Lord, Lord Hutton, later this year. His commission recognises that there has to be some way of controlling the burden of public sector pensions on taxpayers. If most public sector pensions were funded rather than unfunded, I have no doubt that the logical path would be for public sector pensions to follow private sector pensions and move away from defined benefit terms. Since the previous Government took power, the number of active members in open private sector defined benefit schemes has plummeted by about 80 per cent to about only l million people. By contrast, almost all of the 5 million or so active members in public sector schemes are in defined benefit schemes. The Government must deal with this inequality. Taxpayers simply will not tolerate funding public sector pensions at levels significantly beyond the opportunities available to them.

The real barrier to change is that the majority of public sector pensions are funded on a pay-as-you-go basis. If we shift to a defined contribution basis, we might have to pay out in cash on both bases simultaneously, which is of course impossible in the context of the nation's poor financial position. So I support the initial emphasis on pragmatic ways of reducing the cost of those pensions. This must inevitably involve greater employee contributions, as the interim report of the noble Lord, Lord Hutton, recognised. For this reason, I support the provisions of the Bill which bring judicial pensions into the real world of employee contributions. I hope that the Government will ensure that the contributions will be realistic relative to the very significant benefits which are obtained by members of the judicial schemes. I also hope that the Government will remain resolute when the inevitable judicial lobbying starts and that they will not cave in, like their predecessors.

Let me turn now to the improvements to auto-enrolment which underpin the policy, which has always had cross-party support, of generating more pension savings. I support auto-enrolment because it should dramatically increase the numbers saving for their retirement but my support has always been subject to the caveat that the very real needs and concerns of employers have to be recognised. If we overburden employers, we will kill jobs, which will defeat the object of increasing work-based pension provision. I do not believe that the previous Government always gave due weight to the concerns of employers.

The current Government were absolutely right to initiate a review of auto-enrolment, and the changes being made in this Bill are welcome. In particular, I welcome the higher earnings trigger and the optional waiting period, both of which will make it easier for employers to accommodate the new requirement.

I particularly welcome Clause 10, which introduces alternative self-certification requirements. The noble Lord, Lord McKenzie of Luton, may well recall the many discussions that we held during the passage of the Pensions Act 2008, when I tried, with only partial success, to shift the Government from their stance of requiring private schemes to match the Act's curious calculations at the level of every single employee. The best was very much the enemy of the good, and I applaud this Government's decision to help good private schemes to exist on a much more pragmatic basis. I hope that the Government will also ensure that the impact of phasing does not undermine the good work that they have done in Clause 10 and that phasing can be allowed to go alongside meeting the new self-certification tests.

My greatest regret is that the Government have not heeded concerns about micro-employers. We are talking about the vast majority in terms of numbers of employers—probably two thirds of the total—but, of course, a far smaller proportion of affected employees. The Government have decided to include micro-employers fully within auto-enrolment, notwithstanding the very much higher cost burdens on them. Many of these people are simply private individuals employing personal staff. Real burdens will be imposed. I am aware that the Government's review recommended no change on micro-employers, but that was hardly surprising given the composition of the review team. I do not believe that flagging and communications, which have been put forward as solutions to the problems of micro-employers, have any beneficial impact. They are bureaucratic activities which will do nothing to reduce the regulatory burden on micro-employers, let alone to reduce the cost of auto-enrolment, and we have to remember that the Pensions Regulator has no experience of dealing with micro-employers. I predict that there could well be a backlash from micro-employers once they understand the requirements. I hope that the Government will keep an open mind and be prepared to be flexible as the impact of this policy unfolds.

I should declare that I am a sceptic on the value of NEST. I believe that there were alternatives to one big nationalised pension scheme which could have been pursued. I have seen nothing to suggest that NEST will be incentivised to do other than behave like all monopolies—that is, in an inefficient and unresponsive way—but it is not a part of this Bill, and I do not, in many ways, blame the Government for taking the line of least resistance, given the large amounts of money that have already been invested in the development of NEST. We shall see whether NEST justifies the trust that the Government are placing in it.

The last topic that I would like to address is the use of CPI rather than RPI in revaluation and indexation. First, I support the Government's decision to use CPI to uprate public sector pensions and many benefits. It should provide a welcome contribution to reducing the costs of those items over time. However, as the Minister pointed out, that is not in this Bill. I regret the fact that the Government are not using this Bill to help private sector employers shift from RPI to CPI, and I disagree with the noble Lord, Lord German, on this. If CPI is a proper measure of inflation for the purpose of increasing benefits and public sector pensions, it is difficult to see why the Government have not helped private sector employers to make an equivalent change. The Government know full well that without statutory help it is not easy for employers to make this change, except by very costly negotiation. Having said that, I support the intention of Clause 14 in trying to avoid the ratchet effect on private sector revaluation and indexation when CPI exceeds RPI. I have already mentioned to my noble friend the Minister that the CBI is concerned that this clause may not quite achieve the clear policy intent set out for it, and I hope that he will consider an amendment in Committee to put this right.

Pensions: Automatic Enrolment

Baroness Noakes Excerpts

Thursday 10th June 2010 Lords Chamber

[Baroness Noakes]

My Lords, for the avoidance of doubt, I draw the attention of the House to my interests as shown in the register. I do not believe that any of them constitutes a relevant interest for the purposes of my participation in today’s debate, but in these difficult times it is always better to be safer and certain. I congratulate the noble Lord, Lord Kirkwood, on securing this debate so early in this new Parliament. I also congratulate my noble friend Lord Freud on his appointment as Minister and I look forward to his response.

As my noble friend Lord Fowler pointed out, pensions are one of those topics that attract only a small group of usual suspects, who usually know rather a lot about the subject, and so it has turned out again today. It was certainly the case when we considered the Pensions Act 2008, which I am sure is engraved on the heart of the noble Lord, Lord McKenzie of Luton, who so ably led for the Government on that Bill. I support what the noble Lord, Lord Kirkwood, said about the noble Lord, Lord McKenzie of Luton, and his handling of the Bill—indeed, the whole of his portfolio—as Minister.

When I took part in the debates on the Pensions Act 2008, sitting in the seat now occupied by the noble Lord, Lord McKenzie of Luton, I was grateful for the briefing provided by a number of outside bodies, but in particular that from the Confederation of British Industry and the Association of British Insurers. I am grateful to those bodies for briefing me again today for the purposes of this debate. It is a pity that the noble Lord, Lord Lea of Crondall, is no longer in his place after intervening earlier and implying that the attitudes of industry were inimical to auto-enrolment. I can certainly confirm that the Association of British Insurers and the Confederation of British Industry support auto-enrolment and are trying to work on the practicalities of making it a success.

As has already been said in the debate, there was a broad consensus around the Pensions Commission’s proposals for auto-enrolment as the basis for achieving a significant increase in the number of those saving towards their retirement. My party always registered some caveats about the scheme, in particular in relation to costs, to which I should like to return later. I understand that the coalition’s Pensions Minister in another place, Mr Steve Webb, has said that the Government will go ahead with auto-enrolment but that they will review the specifics of the scheme. Like the noble Lord, Lord Kirkwood, I hope that my noble friend can give some more details today about that review. He must be aware that employers and the pensions industry need to know what this review will entail, who will undertake it, when it is expected to be completed and who will be consulted. If there is any substantial uncertainty about the way ahead, that will inevitably affect the willingness of the business community to devote significant resources to continuing to prepare for something that may change. I hope that we can have more clarity on this today.

In my view, the previous Government’s approach had one fundamental flaw. They built their scheme of auto-enrolment around the proposition that every employee earning above the threshold should be included. I believe that this is an unrealistic approach, which in practice has produced real difficulties. The prize for society as a whole is to get a significant number of people saving for their retirement and saving more than was the case in the past—but not every last one. Policies that try to do too much often run into problems, as we have seen with many grandiose projects in the public sector. In the world from which I come, achieving an 80/20 solution—that is, 80 per cent of the benefits for 20 per cent of the costs—would be regarded as an excellent outcome. However, the former Government pursued the last percentile of benefit regardless of its cost.

Auto-enrolment is due to start in 2012, which does not leave much time to sort out the remaining details. The business community believes that the Government should look again at the draft regulations. The previous Government’s first shot at the draft regulations was pretty dreadful and business bodies and the pensions industry have been working with the department to try to get them into a shape that is acceptable. While this has largely been achieved, there remain aspects that cause disproportionate cost and complexity for employers. Will the new Government’s review be looking again at these regulations in order to see whether greater simplicity and lower costs can be achieved?

The noble Lord, Lord McKenzie, will recall our discussions about qualifying earnings, which have been alluded to. These had a particular impact on employers who already had good pension schemes but who used definitions that, although they are common in the private pensions industry, are quite unlike those used in the Act. The noble Lord was helpful and facilitated some amendments to the Bill, which allowed the regulations to accommodate the different ways in which employers are structured as regards their pensions, but that has simply deferred the problem to the regulations. I understand that the regulations in draft still do not recognise the difficulties for employers. The business sector has developed a self-certification approach that is practical and delivers a high degree of conformity, but that has not yet found favour with the Department for Work and Pensions. I ask my noble friend to ensure that his department will start to operate in a pragmatic way that supports employers who are trying to deliver good workplace pensions rather than penalises them for not guaranteeing the last percentile of benefit.

In addition to the qualifying earnings problems, the timing arrangements for auto-enrolment into personal accounts are also a problem. It is inefficient if, as currently planned, the rules require the enrolment of people who are likely to opt out—short-term workers, for example. Business would like enrolment to be delayed for, say, 30 days, which would avoid most of the unnecessary paperwork. To date this has been resisted, so will my noble friend ensure that the department looks at this again? The Government also need to look again at the impact on very small businesses. Again in their zeal to pursue the last percentile, the previous Government included even the smallest employer, including someone employing one person, such as a nanny or a housekeeper.

The previous Government also rejected using HMRC to administer the scheme alongside PAYE and, in so doing, they created an administrative cost for the scheme and a burden for small employers that are disproportionate. I hope that my noble friend will say that the new Government will look again at taking micro-employers out of the ambit of auto-enrolment.

The previous Government never faced up to the very real threat to workplace pensions of employers levelling down to the personal accounts scheme. Every time the Department for Work and Pensions insists on an employer-unfriendly rule, it makes it harder to maintain an existing workplace pension scheme and increases the likelihood that employers will simply default into the personal accounts scheme. This will hurt employees because most workplace schemes contribute more than is required under the 2008 Act. Our Government need to recognise that encouraging workplace pensions means encouraging employers, not hitting them with administration and regulation. This is part of a bigger theme of government action harming workplace pensions. It started in a big way with the ACT raid of 1997 and has got worse over the past 13 years. I hope that we can return to those broader issues on another day.

I emphasise that there is one area in which the business community does not want change—the timetable for implementation. I know that when my party was in opposition we criticised the previous Government’s draft timetable, which will delay full implementation of the employer contribution until 2017, but I believe that it is a pragmatic approach that allows a reasonable time for employers to plan for the cost implications of auto-enrolment. I hope that my noble friend can confirm today that the new Government will not shorten the timetable.

I turn now to costs. In opposition, my party did not believe that the personal accounts scheme could be delivered for the 0.3 per cent annual charge that the Pensions Commission calculated, and so it has proved. While there will be an annual charge of 0.3 per cent, there will be a whopping 2 per cent upfront charge in order to cover the set-up costs. In addition, according to a Written Answer that I received from the noble Lord, Lord McKenzie of Luton, just before the Dissolution of the previous Parliament, the personal accounts scheme will start this summer with a debt of more than £60 million and over the following five years will borrow another £400 million from the Government. There is no sign that when we get to 2015 the appetite for public money will have run out.

While the 2 per cent upfront charge may be necessary to keep these huge borrowing figures from ballooning even further, no date has been set for its removal. The CBI is concerned that the 2 per cent charge will increase opt-out rates and thereby defeat the purpose of the policy. The perceived returns on saving will simply not be sufficient, particularly for older workers being enrolled. Is my noble friend satisfied that the costs that underpin the need for this upfront charge and the massive borrowing are reasonable and that the scheme has not been overengineered?

Perhaps more worrying is that the previous Government announced in March that they proposed additionally to subsidise the scheme to an unspecified extent on the basis that it would have to accept all comers, which the commission had not thought necessary when it produced its 0.3 per cent costing. Can my noble friend say today what this proposed subsidy will cost? Do the new Government sign up to the subsidy on top of the high lending that has to be provided to the scheme?

Lastly, there will also be costs to the Pensions Regulator for policing auto-enrolment. I understand that those costs, too, will be met by further public money. Will my noble friend say how much that will cost? Why is the cost of regulation not borne by pension savings, as happens with other forms of pension saving?

I do not have to remind my noble friend that we live in an age when public expenditure must be cut and that we cannot afford, as the previous Government planned, to carry on spending regardless of the consequences. That may mean that the scheme for auto-enrolment and personal accounts has to be trimmed in order to fit what can be afforded. We cannot have everything that we want. I support auto-enrolment, but not at any cost. I have major concerns about the cost to employers and the cost to the public purse. I hope that my noble friend will be prepared to take radical action when the Government review their inheritance on auto-enrolment. When they do that, I hope that they will also abandon the notion of chasing every last percentile.