Conservative MP Mike Freer raised the issue of pensions inequality during Tuesday’s same-sex marriage Commons debate and said it was right to settle the discrepancy “whatever the cost”.
At the moment pension providers can discriminate against same-sex married couples as well as those in civil partnerships, by ensuring they receive far less survivor benefits than their straight counterparts.
The government resisted attempts to immediately fix the problem as part of the passage of the Marriage (Same Sex Couples) Bill through Parliament.
In May, Equalities Minister Helen Grant said: “We’re very conscious that these [pension] schemes already face difficult economic conditions.” The government estimated that the cost of equalising pensions would be £18 million.
Yesterday, Conservative MP Mike Freer told Labour’s Shadow Home Secretary and Shadow Minister for Equalities, Yvette Cooper, it was right to settle the discrepancy “whatever the cost”. He also said it was important to work out how the Department for Work and Pensions had calibrated its £18 million figure – a figure which the MP has questioned.
Ms Cooper replied: “The Honorable Gentleman makes exactly the right point about the principle of equality that we should be pursuing. That is why we wanted to see progress made on the legislation. We supported the compromise position proposed by the government so that we did not delay the bill but could make progress towards ensuring that the costings were set out and we would have the power to make the changes and establish the equality we all want. That is the right approach.”
Mr Freer later expanded his argument saying: “It is worth revisiting why the pension inequality has to be addressed. The inequality between survivor benefits of civil partners and married couples is simply not sustainable, but it is worth repeating that this issue relates to contracted-in schemes. The key point is that for a man or woman in what some would call a traditional marriage, the pension rights in the event of the partner’s death go back to the date the pension scheme was joined. If, however, someone is a surviving civil partner, even though the partner might have been in the scheme for 20 years, the pension rights go back only to the date when civil partnerships became law. I must point out that this is not just a fractional difference. In the example of John Walker, his civil partner would get a surviving pension of £500 a year. If the civil partnership were dissolved and he married a woman, she would be entitled to £41,000 a year in the form of a widow’s pension. That discrimination is simply not defensible.
“The important message to remember is that although survivor benefits are currently unequal, contribution rates are not. Two men—one straight, one gay—both pay in at the same contribution rate. If their contribution rate is not determined by their sexuality, why should their pension be?”
Earlier in the debate, Culture Secretary and Minister for Equalities Maria Miller said: “The House is fully aware that historically there are many pre-existing discrepancies within the pensions system. To equalise these benefits would come with a considerable price tag.” But she stressed that the government was committed to reviewing the issue and making a decision in due course.