Examination of Witnesses (Questions 20
WEDNESDAY 14 FEBRUARY 2001
20. That brings up a question and then I will
hand on to Richard, if I may, about the future of the code of
practice. You gave a relatively upbeat assessment of its success
so far but you also admitted in your own evidence just a moment
or two ago that obviously, everything in the garden was not lovely,
otherwise, you would not have been progressing this in the way
that you are doing. In the intervening period, between now and
the legislation, what plans do the Government have to increase
awareness of the code of practice among employers?
(Ms Hodge) Until legislation comes into force, and
we successfully negotiated this six-year transposition period,
the code will actually remain our primary instrument of change,
so we intend to use it with vigour. You ask what we will do. We
will build on what we have done. We have done much more research
to highlight the issue. We will continue with our awards. We will
continue with a culture change strategy. We will continue to try
and work with people like the recruitment agencies or the larger
firms to try and encourage action down the supply chain. We will
continue to look at other ways to reach particularly small and
medium-sized enterprises. We will also continue to promote our
New Deal for 50-plus and the New Deal for Disabled People and
further publicity campaigns.
21. Minister, turning to the issue of the EU
Directive on Equal Treatment and the Government's plans for legislation,
which came first? The EU Directive or the Government's desire
to legislate? In other words, did you jump or were you pushed?
(Ms Hodge) I think the answer is they came together.
We committed ourselves in our manifesto to tackling age discrimination.
We tried first working through the code and, although we think
it has been effective, I have said before I think speed is of
the essence in this, given the demographic changes and the extent
of disadvantage, so there was a happy togetherness.
22. So the Government is wholly supportive of
legislation within the terms of the EU Directive on Equal Treatment?
(Ms Hodge) What we want to do with the legislation
is ensure that we develop best practice and make best practice
the norm. What we also want to do is to ensure that we can actually
work together. The reason I have set up this working group with
a very wide range of people working with me is so we can find
the best balance that works in practice to tackle age disadvantage
but to retain business competitiveness. So we want to bring people
with us but we want to work through what will be some very difficult
issues together with the business community and those with a particular
interest in this issue. We want to ensure we get something which
is workable, practicable and balances business efficiency with
tackling age discrimination.
23. Can I ask why it is going to take so long?
You have already referred, I think, twice to the fact the Government
was successful in negotiating this long period until 2006, if
we look at those who suffer from disability discrimination, they
have an Act on the statute book, those who suffer from race discrimination
have legislation on the statute book and will have to have it
up-dated, those suffering from discrimination on grounds of sexual
orientation will have to have legislation on the statute book
under the same Directive by 2004, surely there is a case for older
people in this country saying, "The Minister says on the
one hand that speed is of the essence because of demographic change,
yet the Government is actively putting us way down the queue behind
(Ms Hodge) It may be your presence in Parliament is
short, we are hoping our presence will be long, so for us those
additional six years is a sensible transposition period. Why?
Because there are a lot of complex issues. We have talked, even
around this table this afternoon, about some of the issues Jon
Trickett raised as to why an employer might feel it is to his
advantage or her advantage to use age as a factor in taking certain
business decisions, so we have to think about those issues and
see how we can bring that together. We have talked a little bit
about age discrimination in young people which of course will
be covered in the legislation, and there are some difficult issues
there we have to think about. Some of the issues are easier and
others are pretty complex. We want to get them right. We want
to bring people with us. We want legislation really to reflect
practice rather than be distant from practice, and I think for
all those reasons it is a good idea to do it over a long period.
The other thing I would say is that I am having the first meeting
of this working group in a couple of weeks' time, so we are starting
straight away. I worked in a similar way around disability, in
that I chaired a Disability Rights Task Forcein fact I
came to talk to this Committee about itfor about 18 months,
and my predecessor chaired it before me, and we in the same way
worked through a lot of disability discrimination issues in this
collaborative way, then produced a report. The response from the
Government to that report is about to come out, and then legislation
could follow from that. That has been, I think, a very good model
of how to build consensus around some changes which some people
may be worried about.
24. Minister, to be clear on the timescale,
in the memorandum you said, "Employer groups were concerned
about confusion and a rush to litigation ...", which I think
is understandable, "... and age representative groups expressed
concerns about ineffective legislation". That is not quite
the same thing as saying they want to take five years to get something
through. Are any of the age representative groups saying they
are happy? Have they actually said to you they are happy to wait
five years or have they suggested they would prefer to see it
sooner if at all possible?
(Ms Hodge) You will have to ask them that question.
I have to say I have had a warm welcome from all sides to the
way in which we intend to move forward. Indeed the fact I have
been very swiftly able to put together this very broad range of
people demonstrates I think a commitment to working with us to
get it right. Everybody has welcomed it, that is all I can say
to you. You will have to ask them direct.
25. Moving on to the issue of implementation
when the legislation is on the statute book, at this stage do
you envisage having separate commissions, so there will be a new
Age Commission to run alongside the commissions already in existence,
like the Equal Opportunities Commission, the Race Equality Commission,
or do you think this debate and the Equal Treatment Directive
may move us towards a position of having a single-Anti-Discrimination
Commission rather as they have in Northern Ireland at present?
(Ms Hodge) Nothing in the European legislation and
therefore necessarily in our legislation demands a commission.
One of the issues I will want to consider with the group I have
convened, once we have decided the framework for the legislation,
is how it should be implemented and what the structure should
be. That is the first thing to say. The second is, there has been
a lot of thought given to our structure on anti-discrimination
and we do have three commissions at present. This is a very personal
view, but when I first got this job I was told by everybody, "Look
at the American model, look at the Australian model", so
I did look at them and I am not sure that the single commission
is the most effective way of tackling the disadvantage that various
people meet in society, for two reasons. One is that the focus
is always on litigation and very rarely on culture change and
education and promotional work. Secondly, the focus tends to be
on the issue of the day, so the less powerful disadvantaged groups
tend to get lost in it. People are tending to look at the Northern
Ireland model now because it is the latest around, but it has
hardly been working for very long, so I shall watch how it operates
with interest. Again with my hat on as Minister for Disabled People,
those who are involved in the disability world have only just
achieved their own commission and have been struggling for it
for generations and at this point they want to use that to promote
civil rights for disabled people, and I think they would be pretty
fed up if they felt they were being submerged into one commission.
So it is an issue which is around and I think it is an issue which
will be debated over the coming years but my view at present is
it is not one on which we should move.
26. We have talked about other discrimination
which exists, such as sex discrimination legislation, and the
other legislation which exists, and you have said already it has
not got rid of the problem in 25 years. Do you see other mechanisms
working alongside age discrimination legislation as well, or do
you have any view as to how you can make it more effective than
that which is already in place, which has had some effect but
not been entirely successful?
(Ms Hodge) Yes, I will repeat the ones which I think
are the key ones: our labour market interventions; the New Deal
for 50-plus; the New Deal for Disabled People; attempts to encourage
progressive retirement; looking at how to encourage employers
to change their training programmes and ourselves through the
Learning Skills Council; ensuring there is access to training
and qualifications for older people; attitudinal change and promotional
change. Those are the sort of things. You cannot do it on its
own. Legislation alone will not change the current structure,
I am absolutely convinced of that.
27. I think, Margaret, I really ought to shield
Richard, although he has not complained, from your uncharacteristically
cruel riposte about the length of time he might expect to be here.
(Ms Hodge) You know what I am like, Chairman!
28. If a week is a long time in politics, six
years must run into the Keynes' definition of, "In the long
run we are all dead". I am sure you did not intend to be
so cruel to Richard.
(Ms Hodge) I was being slightly facetious, but what
is true is that six years may seem a long time to us but I do
not think in terms of what we are trying to achieve it is that
long, and I think it is appropriate to get it right, I really
do. The worst thing you can do with legislation is get people
just complying with the letter and not the spirit. If we want
people to apply the spirit then it is very important they should
feel some ownership of that legislation when it is enacted.
Mr Allan: Water and ducks' backs, Chairman!
29. In reply to an earlier question you said
you were absolutely certain that legislation on its own will not
change the age structure of the labour market, and I accept that
entirely, it is a matter of changing the culture and all manner
of other things. One of the main things which has to be addressed,
I think, is an individual's financial calculations about his or
her financial security when he or she finally retires. No doubt
from the point of view of the employer, similar calculations are
made in terms of the occupational pension scheme, and there again
the state will be making fiscal calculations and if a percentage
of the elderly continue to work beyond the age of 65, what are
the fiscal implications of that as well. You introduced the idea
of progressive retirement or flexible and phased retirement, and
I am just wondering if you can guide us on any work which has
been done so far in advice which might be given to the individuals
considering this idea of flexible and phased retirement over a
period of time. How will it affect their state pension and, secondly,
their occupational pension? What are the fiscal implications of
people working beyond 65? Thee must be a fiscal calculation in
terms of tax generated and pensions not paid possibly. Finally,
what implications are there on occupational pension schemes, most
of which are time-limited? Are we talking about people being able
to continue for longer to contribute to an occupational pension
scheme, bearing in mind there is a ceiling on the amount one can
accrue? What will happen in that circumstance? So a series of
questions there but in how much detail have we done the work to
ensure this is a realistic prospect, which I think is an exciting
prospect, people being able to be flexible about their work and
(Ms Hodge) These are some of the issues we are going
to have to consider in the working group. Secondly, both state
social security benefits and occupational pensions are exempt
from the age discrimination legislation. That was another triumph
for the UK in our negotiations around article 13. The third thing
to say is that what we are trying to do is bring in flexibility
and choice for individuals, that must be our aim, and what we
have done so far is that the DSS impediments for progressive retirement
were included in the Child Support, Pensions and Society Security
Act, 2000, and we have the Inland Revenue and the DSS currently
discussing practical issues together with the pensions industry,
the National Association of Pension Funds. I hope that work will
come to fruition in the not-too-distant future. When you talk
about complexity, these are just some of the issues we will have
to think through very clearly to make this legislation practicable.
30. Do you envisage that when a person reaches
65 they may continue in work and receive a state pension simultaneously?
If so, will they continue to pay into the national insurance fund,
because they will be employees even though the national insurance
fund is intended for pensions contributions which they are already
receiving? It seems to me this is a complicated issue. I sat on
the Bill you have just referred to and I must admit it went totally
over my head and I do not remember addressing those kind of issues.
Have we thought that through or are we looking at that as well
at the moment?
(Ms Hodge) I am not sure what the answer to that is.
Just to make one thing clear, your entitlement to state pension
will not change, so you will continue to be eligible for state
pension as at present. On the other issues I think we will have
to write to you. You are just demonstrating the beginnings of
that conversation in the working group.
(Mr Richardson) It must be the case that things do
not change, because plenty of people work beyond 65 now and their
income is taken into account for tax purposes along with the state
pension. Subject to confirming that, I think nothing will change.
31. Before we let you go, can we touch on this
issue of compulsory retirement ages which will be illegal once
the Directive has been implemented. What impact do you think this
will have upon an employee's ability to make contributions to
occupational pension schemes over a reasonable time period?
(Ms Hodge) Can I clear up something, Chairman? There
is nothing for us to abolish, to be absolutely honest, because
there is no such a thing as a national retirement age. There is
a state pension age and that will not change. What we will need
to do is to look at the issue of discrimination and our purpose
will be to try and ensure choice and flexibility for the individual,
so any discrimination that arises out of a whole range of current
practices will need to be examined. One of those will be a contractual
retirement age which an individual employer may have, but there
are all sorts of other things involved. But the idea there is
a national retirement age is just wrong. It is one of those areas
where it might have been better to have given the evidence.
32. Is your view then, Minister, that it is
likely that the legislation may make illegal something such as
happens currently within the NHS where, once somebody reaches
the age of 65, they cannot be employed, which is a term and condition
within that particular area of service? Alternatively, where a
private sector employer says, "At age 65 I will get rid of
you". Those are the sort of things which you are saying may
be made illegal?
(Ms Hodge) What we will have to look at, and again
this is why we are taking our time over it, is where there is
an occupational requirement for there to be a specific age. Let
me give you an example, a television show which is geared towards
youth, it may be appropriate to have as the compere of that show
somebody who is young, so where there is an occupational requirement
to have a specific age, that might be an issue. The other thing
is that there has to be an objective justification, and we will
have to work through those situations where an objective justification
would make an age limit for retirement an issue. There are all
sorts of other issues like specifying age in adverts, which will
be one we will have to think about; redundancy schemes would be
another one. There are a huge range of very, very complicated
33. The standard contractual terms and conditions
which say, "You will retire at 65", which is very common
now, aside from all this objectivity, will be the sort of thing
we can expect to be made illegal?
(Ms Hodge) My quote here is, "Compulsory retirement
based on age would only be possible where it is objectively justified
by a legitimate aim."
34. In thanking you, Margaret for addressing
our questions so well, can I ask if I am right in believing that
it is the Government's intention to promote flexibility in retirement,
that is where it is both in the interests of companies and individuals
to retire before the age of 65, whatever its proper designation
is, and also to go on beyond that, and you are presently addressing
all the tax and benefits issues which impinge upon achieving flexibility?
(Ms Hodge) Thank you for the opportunity to reconfirm
that, Chairman. Flexibility and choice are what I hope will inform
the deliberations as we consider how to take the legislation forward.
Something which perhaps I should have said earlier, it could beand
you and I might like thiswork combined with leisure, volunteering,
further educationI have this desire to learn the harp and
do a good science A-level which I missed outor indeed caring.
So there are all sorts of flexibilities we want to bring in. Equally,
on the other side, it is an outrage that we are not making the
best use of the widest pool of talent by ensuring that people
have the opportunity to participate in the labour market whatever
Chairman: Thank you very much indeed on behalf
of all of us here.