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You can find the current article at its original source at http://www.guardian.co.uk/politics/reality-check/2013/may/20/civil-partnerships-pensions-how-much-will-it-cost
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| Version 1 | Version 2 |
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| Gay marriage bill: will extending civil partnerships really cost £4bn? | Gay marriage bill: will extending civil partnerships really cost £4bn? |
| (35 minutes later) | |
| Almost 50 years ago the Beatles sang, "you can't buy me love". Half a century on love still isn't for sale but according to the government, the associated costs to the taxpayer are rising fast. | Almost 50 years ago the Beatles sang, "you can't buy me love". Half a century on love still isn't for sale but according to the government, the associated costs to the taxpayer are rising fast. |
| In the continued parliamentary ding-dong over permitting gay couples to get married, Tory backbenchers have introduced an amendment to the current bill to extend civil partnerships to heterosexual couples. | In the continued parliamentary ding-dong over permitting gay couples to get married, Tory backbenchers have introduced an amendment to the current bill to extend civil partnerships to heterosexual couples. |
| Taking the arguments (and politics) at face value, this move is about making sure that gay or straight, everyone gets equal treatment and equal choice under the law. | Taking the arguments (and politics) at face value, this move is about making sure that gay or straight, everyone gets equal treatment and equal choice under the law. |
| On Sunday night Labour said that it would support the amendment but DWP pensions minister Steve Webb has reported that this legislative addition is going to cost a lot of money - £4bn to be precise - in associated pension costs. | On Sunday night Labour said that it would support the amendment but DWP pensions minister Steve Webb has reported that this legislative addition is going to cost a lot of money - £4bn to be precise - in associated pension costs. |
| The figure first cropped up last week in the human rights committee hearing when Steve Webb was giving testimony. My colleague Caroline Davies was one of those to pick up on it whilst covering it last Tuesday" | The figure first cropped up last week in the human rights committee hearing when Steve Webb was giving testimony. My colleague Caroline Davies was one of those to pick up on it whilst covering it last Tuesday" |
| "We have costed that at roughly a £3bn-£4bn cost to public service pension schemes," Webb said. | "We have costed that at roughly a £3bn-£4bn cost to public service pension schemes," Webb said. |
| So if MP's want civil partnerships to be extended to all couples, the government has warned the whole bill will be unaffordable and will have to be shelved for the meantime. In the world of pensions, £4bn isn't all that much money. We spend over £100bn in a year just on the state pension. However Labour sources noted how the size of the "price tag" had grown from £3bn to £4bn in five days. So is it realistic at all? | So if MP's want civil partnerships to be extended to all couples, the government has warned the whole bill will be unaffordable and will have to be shelved for the meantime. In the world of pensions, £4bn isn't all that much money. We spend over £100bn in a year just on the state pension. However Labour sources noted how the size of the "price tag" had grown from £3bn to £4bn in five days. So is it realistic at all? |
| Last night former children's minister Tim Loughton who opposes gay marriage and tabled the amendment tweeted that the government were "scaremongering" by bandying around the £4bn "fag packet estimate" | Last night former children's minister Tim Loughton who opposes gay marriage and tabled the amendment tweeted that the government were "scaremongering" by bandying around the £4bn "fag packet estimate" |
| He then tweeted this: | He then tweeted this: |
| If Govt claim there is no demand for extending equal civil partnerships how can they calculate it would cost £4bn? #canthaveitbothways | If Govt claim there is no demand for extending equal civil partnerships how can they calculate it would cost £4bn? #canthaveitbothways |
| So if there is expected to be little demand for civil partnerships from straight couples why would the costs be that high? It's a good question especially given that one of the main reasons why gay rights campaigners want access to marriage is because it offers more generous pension entitlements. | So if there is expected to be little demand for civil partnerships from straight couples why would the costs be that high? It's a good question especially given that one of the main reasons why gay rights campaigners want access to marriage is because it offers more generous pension entitlements. |
| To quote from a gaystar news article by sometime Guardian contributor Ray Filar: | To quote from a gaystar news article by sometime Guardian contributor Ray Filar: |
| Civil partners do not have the same pension rights as married couples. If one civil partner dies, the pension share that the surviving partner receives is often lower and lasts for less time than with married couples. | Civil partners do not have the same pension rights as married couples. If one civil partner dies, the pension share that the surviving partner receives is often lower and lasts for less time than with married couples. |
| The reason for this is the pension a surviving partner is entitled to is measured differently depending on whether they have been civil partnered or married. | The reason for this is the pension a surviving partner is entitled to is measured differently depending on whether they have been civil partnered or married. |
| For civil partners, public sector schemes are dated back to 1988. For private sector schemes, it need only be backdated to the Civil Partnership Act 2004. | For civil partners, public sector schemes are dated back to 1988. For private sector schemes, it need only be backdated to the Civil Partnership Act 2004. |
| But for married couples, a surviving partner is entitled to a pension based on the number of years their spouse paid into the pension fund. | But for married couples, a surviving partner is entitled to a pension based on the number of years their spouse paid into the pension fund. |
| Here's the issue brilliantly explained with Lego: | Here's the issue brilliantly explained with Lego: |
| Now there is a real quandary. Why would extending a less generous pension scheme create a larger liability for the government? | Now there is a real quandary. Why would extending a less generous pension scheme create a larger liability for the government? |
| We're going to try and figure this out in the next few hours (and I'd stress 'try' because we don't have our own actuarial advisers to hand). But please do leave any helpful leads below. | We're going to try and figure this out in the next few hours (and I'd stress 'try' because we don't have our own actuarial advisers to hand). But please do leave any helpful leads below. |
| UPDATE 1: | |
| Steve Webb's full quote from last Tuesday's committee hearing starts to shed a little more light on it all: | Steve Webb's full quote from last Tuesday's committee hearing starts to shed a little more light on it all: |
| Just to think through...If you allow opposite sex couples to form civil partnerships, the question would be then do their pensions rights in respect of each other look like each other look like a married opposite sex couple? And there would be a strong argument for that - I don't know what the government would decide. | Just to think through...If you allow opposite sex couples to form civil partnerships, the question would be then do their pensions rights in respect of each other look like each other look like a married opposite sex couple? And there would be a strong argument for that - I don't know what the government would decide. |
| But if it decided then you'd have a whole set of people who at the moment have no set of survivor pension rights at all who would suddenly have survivor rights. | |
| By survivor rights, Webb means the ability for people to claim the pension of their partner once they are deceased. But what he means by a "whole group of people" isn't entirely clear. It seems he is talking about gay couples currently in civil partnerships who don't have full survivor rights at the moment. | By survivor rights, Webb means the ability for people to claim the pension of their partner once they are deceased. But what he means by a "whole group of people" isn't entirely clear. It seems he is talking about gay couples currently in civil partnerships who don't have full survivor rights at the moment. |
| Webb goes on: | |
And it's pretty clear that as soon as you'd gone down that route you might end up in the position of full equality for example widowers expecting the same rights as widows. And we've costed that as of the order to 3-4bn pound cost to public service pension schemes. So once you'd opened that up, that's one potential scale of impact. | And it's pretty clear that as soon as you'd gone down that route you might end up in the position of full equality for example widowers expecting the same rights as widows. And we've costed that as of the order to 3-4bn pound cost to public service pension schemes. So once you'd opened that up, that's one potential scale of impact. /> |
| UPDATE 2: | |
| My colleague Mona Chalabi has done some sterling work on the other non-pension costs associated with the bill. She writes: | |
The government's official impact assessment, part of its 13 week consultation on the gay marriage bill last year suggested that the costs could be anywhere between £3.3m to £4.7m. | |
| But this doesn't include the amendment in questions. There are two critical elements of that cost that aren't being highlighted: | |
| Firstly, those cost figures refer to a 10 year transition period and secondly the impact assessment also considers the economic benefit (from things like "additional spending on ceremonies") - and they put this number at £0.1m at a low estimate and £15.7m at a high estimate. | |
| So how can last year's impact assessment help us get to the bottom of the costs of the proposed amendment? Well it's likely that some of the transitional costs might also apply were opposite sex couples to be granted civil partnership rights. | |
| For example the Office for National Statistics might again have to receive the £150,000 to £200,000 needed to reform their IT systems for recording marriage data. | |
| Local authorities may also require anywhere between £190,000 and £670,000 that it was indicated would be needed to familiarise registrars to marriage procedures for same sex couples. | |
| That said, some of these processes could cost less if reforms relating to civil partnership for straight couples could be done at the same time as reforms resulting relating to marriage for same sex couples. | |
| Simply put, you might get a bit of two for the price of one legal reform on some administration costs. | |
| But even if that weren't the case the upper estimate that we've totted up so far is of £870,000. |