Chief Political Correspondent
The Government was warned it could face a Tory backbench rebellion and a defeat in the Commons if it seeks to overturn the vote in the Lords to give wives who divorce a share in their husband's pension.
The Lord Chancellor, Lord Mackay of Clashfern, strongly hinted that the Government will seek to drop the measure for pensions splitting, which was forced into the Family Law Bill by Labour peers, and Tory rebels, including former ministers.
Ann Winterton, one of the Tory MPs opposed to the Bill's main provisions to reform the divorce laws, said she would be prepared to vote for the amendment on pensions splitting to stay in the Bill when it goes to the Commons.
"I have a great deal of sympathy with the amendment. In this change to the divorce law ... the definition of the assets of the couple, the pension does figure very strongly.
"I think the Lord Chancellor should take to heart the decision in the Lords and say that, although this amendment may be flawed, they will do something about it, either by a separate piece of legislation or by something in this Bill."
Although Labour will vote for the Bill in the Commons, it will support the amendment leaving the Government facing the threat of having its wafer- thin majority wiped out by a backbench rebellion.
Lord Mackay said: "I doubt very much whether anyone is suggesting it [pensions splitting] can be done properly within the timetable of this Bill ..." The issue is being passed to the Secretary of State for Social Security, Peter Lilley, to sort out, but yesterday his department stressed the problems may prove impossible to deal with in the Bill.
The practical difficulties include a three-year delay in putting pensions on the Government computer. The Department of Social Security also said pensions splitting would create a tax advantage, compared with married couples, for those who were divorced; that anomaly would undermine the Government's policy on the family.
The defeat has further undermined the Lord Chancellor's standing with Tory MPs, who are opposed to the main thrust of the Bill to reform the divorce laws. One Tory MP said: "The whole thing is a disaster. He ought to scrap it all."
There is no immediate threat to the Lord Chancellor's position, but the Bill is proving a thorn in the Government's side.
The Lord Chancellor yesterday said it would be better to deal with pensions splitting "properly by issuing a Green Paper to consider all these matters fully.
"The problems are very real and nothing can be done to bring this into effect ... for quite a considerable time.
"I would say it's better to have the legislative provisions clearly thought out before you put them in the statute book."
Frank Field, Labour chairman of the Commons Select Committee on Social Security, said the Lords made the right decision on the principle of pension splitting, in spite of the practical difficulties.
"There is the initial difficulty of computing a value to what pension entitlement up to the point of divorce is, and then splitting that and allowing some of those funds to be taken from the scheme," he said. "The Lords made the right decision, one of principle."Reuse content