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Baroness Hollis of Heigham: My Lords, I am sorry if my noble friend thought I was being evasive. She asked a Question about Section 18 but the widows' benefit changes to which she refers come under Section 19. Knowing my noble friend's expertise in SERPS and social security Acts, I took the Question at face value. I agree with everything my noble friend said. In 1986 the previous government halved the potential entitlement to widows from 100 per cent to 50 per cent of SERPS. They took no action whatever to publicise the effects of the changes to their policies so that people could make decent alternative arrangements. A heavy responsibility lies with the Benches opposite. It is for us to seek, if we can, to rectify the failure of the previous government to publicise and inform. We are seeking to do that. We are taking legal advice. However, the proposal of my noble friend to delay introduction of the changes for a further 10 years would cost in the region of £5.5 billion. The Government are taking advice and exploring the avenues. As soon as I am able, I shall inform the House of the Government's proposals.

Lord Higgins: My Lords, is it not the case--as was clear when we previously had exchanges on this subject--that the correct information was not being given by the department under this Government as little as a few weeks ago? Having said that, can the noble Baroness confirm that the Minister of State said very clearly in another place that so far as concerns the lack of information on SERPS the Government are taking steps to ensure that no one suffers as a result of inadequate information? Can the Minister confirm that there is no possibility whatever of the Government reneging on that commitment?

Baroness Hollis of Heigham: My Lords, I had hoped that what I have just said would explain the situation to

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the House. We are taking legal advice about the implications of compensation on the one hand or a possible delay in the introduction of these proposals on the other in order to try to rectify the errors and mistakes made by the previous administration. My honourable friend in the other House has made the Government's position clear. I confirm that.

Lord Goodhart: My Lords, I welcome the statement in the other place. Will the Minister confirm that the compensation scheme which is to be provided will be full and generous and not be a mean scheme slipped out to the press on a Friday in August?

Baroness Hollis of Heigham: My Lords, I have not made any commitment that there will be a compensation scheme or any other form of recompense--a deferral or whatever. All these options are being explored by my right honourable friend the Secretary of State. Whatever way the Government may choose to go, the previous administration dumped us with a multi-billion pound problem, the bill for which is being picked up collectively, presumably, not only by the DSS but by widows and people currently in SERPS who have lost the opportunity, thanks to the previous administration's neglect, to build up alternative financial provision for the future.

Lord Rix: My Lords, will the Minister please explain how the change to spouses' benefits under SERPS which cuts back accrued rights is compatible with the United Kingdom's obligations under Article I of the First Protocol to the European Convention on Human Rights? Is it not a fact that Article I protects the proprietary rights of everyone against arbitrary and retrospective interference by the state?

Baroness Hollis of Heigham: My Lords, I am assured that the 1986 law is compatible with the European Convention. The problem is that the previous administration failed to inform the public about the implications of their policies so that people were unable to make decent alternative arrangements. That is where the problem lies. We are doing our best to rectify it.

Lord Davies of Coity: My Lords, is my noble friend the Minister aware of the words spoken by my right honourable friend Margaret Beckett in 1986 when responding to the Minister at the time, the right honourable John Major? She said:

    "It is extraordinary that the Government should place people in such a position. I do not believe that the Government could not make the change transitional. They will be taking away the rights that have been earned. Once the change takes effect, the pension that has accrued will be halved. The whole pension will not be inherited".--[Official Report, Commons Standing Committee B, 27/2/86; col. 470.]

In view of the principle that what applied then applies now, does my noble friend agree that the Government should either make changes so that the halving does not take place or, alternatively, introduce a transitional arrangement which displays a greater degree of justice and less discrimination?

Baroness Hollis of Heigham: My Lords, as I said, the Government are looking at all the options. But to

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defer, for example, the introduction of these changes by another 10 years would cost us--the Government and the DSS--£5.5 billion. It would cost that amount to rectify an error made by the previous administration. We are exploring the options but any move in that direction is extremely expensive.

Car Hire and Elderly Drivers

2.53 p.m.

Lord Lucas of Chilworth asked Her Majesty's Government:

    Whether the practice whereby car hire firms refuse to hire cars to over-70 year-olds is contrary to United Kingdom or European legislation or any conventions to which the United Kingdom is a party.

Lord McIntosh of Haringey: No, my Lords. Car hire firms would not be prevented from refusing to hire cars to individuals over 70 years of age by any UK or European legislation, or conventions to which the UK is a party. Informal inquiries have indicated that such a practice is by no means universal. Where it happens, it is a consequence of commercial decisions.

Lord Lucas of Chilworth: My Lords, I thank the Minister for his reply, which is a little disappointing in that there is evidence of a growing practice among car hire companies of refusing to hire cars to those over 70 years of age and, where they do hire a car, enhancing the insurance premiums for those over the age of 70. Those companies are denying that group of people--they make up 39 per cent of motorists today and the percentage is increasing--the opportunity of relinquishing the use of their own motor car in order to use public transport or occasionally to use a hired motor car.

Lord McIntosh of Haringey: My Lords, the Government are sympathetic to those who are denied the opportunity of car hire or who have to pay higher premiums. But even when this Government are widely being accused of being control freaks, we would be going a little far if we were to instruct insurers whom they had to insure and whom they did not insure. We would be entering the insurance business ourselves if we did that.

Baroness Thomas of Walliswood: My Lords, if these 70 year-olds have driving licences, is it not the case that they are likely to be insured anyway, so their insurance is not in any doubt? This seems to be a special discrimination on insurance. Is the noble Lord aware that, for example, visitors of this age group from the United States, where such a practice would be unheard of, are astounded to find that they are unable to hire a car in this country?

Lord McIntosh of Haringey: My Lords, under the Road Traffic Act 1988, the insurance which people of any age must legally have is only third party insurance. What the car hire companies and their insurers are

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presumably doing is protecting their property, which is the vehicle. As to the issue of visitors from the United States, I am not at all sure that I agree with the noble Baroness. When I first tried to get insurance for a car in the United States--I was under the age of 25--I found that only one insurance company in the whole of the state of Ohio was willing to give any insurance for the under 25s.

Lord Borrie: My Lords, does my noble friend agree that, if there is an agreement between car hire firms not to hire out to those over 70 years of age, or indeed an informal arrangement to do that, or instead to charge higher insurance premiums to anyone over 70 years of age, that may be illegal under the Treaty of Rome and under the Competition Act of last year when it is implemented?

Lord McIntosh of Haringey: My Lords, since the Question was tabled we have been able to make only informal inquiries rather than carry out a full survey. But we are not aware of any agreement to deny opportunities to people over 70 years of age. If there were any such agreement, the Consumer Credit Act 1975 might also come into force and the Office of Fair Trading might have something to say about it. On the present information, we have no evidence that the law is being broken.

Lord Bruce of Donington: My Lords, I declare a personal interest in this matter in that I am marginally over the age mentioned in the Question. I ask the Government to inquire whether, if this practice exists on any scale, the age discrimination Act might come into operation. It seems quite intolerable to me, as one whose no claims bonus is awarded every year, that people should be treated in this manner, particularly when they reach the age of wisdom.

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