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12.52 pm

Mr. John Whittingdale (Maldon and East Chelmsford): I join other hon. Members in congratulating the hon. Member for Falmouth and Camborne (Ms Atherton) on her good fortune in coming third in the ballot for private Members' Bills and on the way in which she has presented her case to the House.

A number of speakers have pointed out that age discrimination has occupied quite a bit of the House's time in recent years. Three Bills have been introduced on the issue in this year alone and one was introduced in each of the previous five years. It is worth noting that two of those Bills were introduced by Conservative Members, five by Labour Members and one by a Liberal Democrat. None of them proved successful, but their introduction indicates a widespread desire, which extends across all parties, to see a debate on the issues that the Bill raises.

However, there is another reason why it is very important that we should reconsider age discrimination. Almost exactly a year ago, the European Union Employment and Social Affairs Council adopted the equal treatment in employment directive, which will prohibit discrimination in employment on a number of grounds, including age. Member states have until 2 December 2006 to implement the provisions on age and disability. I am slightly surprised that no more of our debate has concerned the EU directive. It has been mentioned by a number of hon. Members, but it is a looming presence that we cannot ignore.

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The directive is wide ranging and will cover selection, recruitment, working conditions, training opportunities, promotion and employment benefits. Only the armed forces are specifically exempted from it, although it will not cover membership of occupational pension schemes. It will reverse the burden and proof in civil cases of alleged discrimination so that when an allegation is made, it will be up to the employer to show that discrimination has not occurred.

There has been an obligation for a year to introduce legislation on age discrimination. There has been no shortage of employment law proposals, which include consultation documents on part-time work, fixed-term contracts, parental leave entitlements and dispute resolution. Next Tuesday, the Employment Bill, a major measure, will be considered on Second Reading. However, the Government have been largely silent about age discrimination, apart from an explanatory memorandum in January from the then Department for Education and Employment. It stated that the directive required legislation and that the extended implementation period until 2006 will allow time for research and widespread consultation with employers, individuals and expert groups to clarify the differences in treatment on the ground of age that are justified and those that are not.

It is a pity that, apart from establishing a working group, nearly a year has passed and the consultation process has barely started. I am pleased that the Minister said that the Government intend to publish proposals for a first round of public consultation in the next few weeks. I am sure that he will give details of that shortly. However, much time has already been lost.

Several hon. Members said that the Select Committee on Education and Employment usefully dealt with the issue. It produced a helpful report, which drew attention to the difficulty of determining the extent of discrimination in the work place on the ground of age other than through anecdotal evidence. It pointed out that although it may seem that discrimination is taking place on the ground of age, there may be other underlying reasons. For example, a higher proportion of the work force aged over 50 may have worked in traditional heavy industries, which have experienced more redundancies. That may have had a greater impact on those people. The Select Committee accepted that discrimination existed and called for further research, which I support.

The Select Committee highlighted two valuable points, which I endorse. Some of the contributions have dealt with them. First, discrimination against employees because of age is likely to lead to economic inefficiency. Those who use age criteria to judge individuals' ability will have a narrower choice of applicants from which to recruit. Those who judge individuals on their ability, not according to their age, are likely to manage resources more effectively by minimising staff turnover. They are better able to build a flexible work force and they will have access to a wider range of experience. Their work force will be better motivated if employees do not believe that they are necessarily reaching the end of their employment. Increased productivity will mean that their costs are reduced.

Those clear advantages, which most hon. Members accept, inevitably lead us to ask why employers have not recognised them more widely. Hon. Members have pointed to the shining example of B&Q. Why is Government intervention necessary? I favour a voluntary

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approach, which would educate employers, rather than compelling them through the blunt instrument of anti-discrimination legislation.

My hon. Friend the Member for Gainsborough (Mr. Leigh) made a powerful and persuasive case. He explained why legislation involves dangers and that it is much better to focus on the market to achieve greater efficiency through ruling out discrimination. The previous Conservative Government mounted several campaigns to educate businesses about the advantages of employing older workers and the Government have continued that practice. They adopted a similar approach through the voluntary code of practice on age diversity. None the less, I accept that progress has been disappointing. My hon. Friend the Member for Croydon, South (Richard Ottaway) mentioned specific areas where not nearly as much progress as we would like has been made.

The second reason why age discrimination is damaging is demographic: we have an ageing population. Currently, about 35 per cent. of our work force is aged over 45, but in 10 years time that proportion will have risen to 40 per cent., so it is essential that we make full use of the abilities of older workers. That will have implications for retirement ages, which I shall discuss shortly.

As I have said, there are dangers in adopting a statutory approach. When the Education and Employment Committee carried out its investigation, it received evidence from several business organisations. The Confederation of British Industry pointed out that there is considerable uncertainty about what constitutes unfair treatment. Detailed guidance is needed to give employers certainty and there must be a long lead time before legislation comes into effect if widespread compliance is to be achieved.

It is self-evident that some occupations demand a high degree of physical fitness and that, similarly, physical risk factors escalate significantly with age. Examples cited by the CBI include aircraft pilots, divers and offshore riggers, and I would imagine that firemen, who have been mentioned several times today, fall into the same category. Those much higher actuarial risks are likely to affect employers' liability both for insurance and for health and safety requirements.

The CBI rightly points out the danger that legislation will leave employers vulnerable to high levels of costly—and potentially spurious—litigation. One of the main purposes of the Employment Bill, which is to receive its Second Reading on Tuesday, is to reduce the number of cases that go unnecessarily to employment tribunals, but if it is passed, the Age Equality Commission Bill will create a new cause under which employees can take a case to a tribunal. In the evidence to the Select Committee, it was pointed out that it is extremely difficult to show that age discrimination has not occurred—indeed, anyone leaving a job could claim that age discrimination had played a part, whether they were replaced by a younger worker or an older one. Age discrimination is likely to be thrown in among all the other causes under which cases are taken to tribunals.

There are many unanswered questions: for example, will it be fair to offer seniority-based pay, or to offer more attractive redundancy packages to older workers? The Institute of Directors has pointed out that the provision in the directive for prohibiting apparently neutral provisions, criteria and practices that are likely to affect adversely a

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particular age group is likely to entail costs for business. Some of the practices that may be prohibited are not at all obvious. It has been suggested that graduate recruitment schemes, recruitment by word of mouth, and advertising in particular places or publications may be held to be indirectly discriminatory. Most of us will be familiar with the "milk round", whereby employers go to universities specifically to recruit graduates. That, too, might be ruled to be indirectly discriminatory on the ground of age.

There are doubts about the effectiveness of existing anti-discrimination legislation. The United States of America, France, Canada, Finland, Spain, Australia and New Zealand have age discrimination legislation, but only in America and New Zealand are unemployment and inactivity rates for the over-50s lower than in this country. Clearly, more research is needed.

It is extremely likely that employer-imposed compulsory retirement ages will become unlawful unless they can be objectively justified. The evidence to the Select Committee states that that will be the case. I am strongly in favour of promoting flexible and phased retirement ages—indeed, the demographic factors that I have mentioned make them essential—but I note the view of the CBI that employers would strongly oppose a ban on contractual agreements to retire. Such matters should be left to negotiation and agreement between employer and employee.

During the debate, my hon. Friend the Member for Bexhill and Battle (Mr. Barker) made an interesting observation about whether the Government's proposed age ceiling for membership of the House of Lords would prove to be discriminatory under the terms of the directive. I am sure that the Government will examine that issue.

Many questions urgently need to be addressed. Every single one of the employers organisations has called for consultation and clarity. That is one reason why I welcome the opportunity that the Bill has given us to have an informed debate. It might be helpful to establish a body such as the hon. Member for Falmouth and Camborne suggests. I have not always been a great fan of commissions, and I share some of the reservations that were set out by my hon. Friend the Member for Romford (Mr. Rosindell). However, an advisory body might be able to bring about the national debate that is needed and could prove valuable. That view is shared by Help the Aged and Age Concern, and—like most hon. Members here today—I have been approached by Age Concern in my constituency to support the Bill.

I have focused on the employment aspects, but the Bill covers other aspects, some of which have been mentioned in the debate. I am sure that we all share the views of the hon. Member for Brighton, Kemptown (Dr. Turner) about evidence of age discrimination in the NHS, and the appalling stories of "Do not resuscitate" notices. Nobody could condone that.

My hon. Friend the Member for South-West Bedfordshire (Andrew Selous) made a helpful contribution on the issue of insurance, bringing in his expertise in that area. In some areas, insurance may be more expensive for older people. In the case of health insurance, there may be good reasons for that, based on actuarial calculation. It is undoubtedly the case that the

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average cost of health care for someone over 50 will be higher than for someone under 50. Indeed, the cost continues to rise as people grow older. In some markets, it is cheaper for older people to obtain insurance. For example, some motor insurance schemes are targeted specifically at older people who are less likely to have accidents. I suspect that older people would not wish to have such schemes ruled illegal under anti- discrimination legislation.

The whole issue raises huge questions and we have had the chance to mention some of them today. The need to address the issue is urgent, because we are not alone in considering it. It has already been covered by a European directive and we are under an obligation to legislate soon. I hope that the debate will have served to illuminate some of the issues that have been raised. I also hope that the debate will continue in Committee. It is important that we have a full discussion of all the issues raised and, for that reason, we do not intend to stand in the way of the Bill being given a Second Reading.

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