Although Lord Mackay of Clashfern, the Lord Chancellor, said last month he would "consider sympathetically" amendments to bring in pension-splitting, Government sources said yesterday he would not bring forward changes to this Bill.
The pensions industry, which has promoted the change, expressed "disappointment" last night that the Government would only publish a consultation paper on the issue.
Jonathan Evans, the minister for the Lord Chancellor's Department in the Commons, met the National Association of Pension Funds last week to outline Government objections.
But an association spokeswoman said: "Every time they put up an objection, we knock it down." She added: "We recognise that there will be a need for a long implementation period, but that is no reason for not legislating now."
Amendments to the Bill to require pension rights to be split on divorce were presented by Baroness Hollis, Labour's Lords spokeswoman on social security, and won cross-party support. Lady Hollis said the present system was a "gamble" that left former wives "traded in for a younger model" dependent on their husbands.
"If he dies early she may get nothing, and when eventually after retirement he does die, she will get nothing," she said.
She withdrew her amendments when Lord Mackay promised to look at them sympathetically. Lord Mackay has tabled amendments to meet the objections of right-wing Conservatives, but has decided the practicalities of pension- splitting are "too complex".
He is said not to want to pass an amendment on the principle which would then have to be put into practice through Government orders. "That leads to bad law," said a source.
Instead, the House of Lords will debate an amendment on Thursday which will write into the Bill that "the institution of marriage is to be supported". This appears to reflect a Daily Mail campaign against the Family Law Bill on the grounds that it "undermines the institution of marriage".
Lord Mackay has also tabled minor amendments to give greater prominence to the interests of children in divorces.
The decision to put pension-splitting on the backburner will anger some Tory peers, and Lady Hollis said last night that she would table similar amendments for the report stage.
She said: "I hope very much that the House of Lords will continue to speak with one voice and persuade the Lord Chancellor to change his mind."
Lord Mackay was believed to have been generally supportive of the change, but met severe resistance from the Department of Social Security and the Treasury.Reuse content