Equality Bill

My Lords, the intention of Amendments 102 and 103 is to abolish the default retirement age. Many noble Lords have, this afternoon, made a compelling case for doing this, but I am grateful to the noble Baroness, Lady Morris, and to my noble friend Lord Campbell-Savours for rightly alerting us to the practicalities. I was interested to hear the noble Lord, Lord Monson, talking about aptitude tests; I have worried fearfully about Members of this House and aptitude tests, I have to say. Through the 2006 Employment Equality (Age) Regulations, this Government implemented, for the first time, a ban on age discrimination for the workforce. The ban covers recruitment, training and promotion. In addition, all employees were given a new right to ask to continue working beyond their employers’ retirement age. The regulations also extended protection from unfair dismissal to over-65s, except in the case of a genuine retirement. Prior to 2006, employees had no protection from age discrimination, employers were free to set an earlier retirement age and over-65s had absolutely no protection from unfair dismissal. The regulations have therefore improved the legal position of older workers. The default retirement age was introduced as one part of this overall package, and in response to significant concerns expressed by stakeholders during the consultation. A default retirement age is very different from a forced retirement age, as I am sure all noble Lords realise. The principal aims of the default retirement age were to facilitate workforce planning practices that businesses told us were essential, and to avoid an adverse impact on the provision of occupational pensions and other work-related benefits, such as group health insurance. We considered that it would help fulfil other policy objectives, including: protecting the dignity of workers at the end of their working lives; improving the participation of workers in the 50-64 age group, and encouraging culture change. We will need to reconsider those issues through the review of the default retirement age. The Government, of course, welcome the fact that more people want, and are able, to remain in the workplace for longer, and that many employers are already adopting more flexible approaches to retirement. We are seeking to encourage that through initiatives such as Age Positive, linking with influential stakeholders, key business leaders and directly with employers to encourage the recruitment, training and retention of older workers, and flexible approaches to work and phased retirement. As the noble Baroness, Lady Morris, said, retirement should be a process rather than an event. We should indeed take into account better appraisal, management and training. In addition, we have announced a new national guidance initiative to provide help for employers to plan and implement flexible retirement and flexible working practices. Through the review of the default retirement age, we will consider what further can be done to provide support for flexible retirement; there is much potential for win-wins here. Last July, we announced that we would bring forward the review of the default retirement age from 2011 to 2010. Moving swiftly after the High Court’s judgment on 25 September, we announced on 15 October last year a call for evidence to be submitted by 1 February to inform the review. In his introduction the noble Lord, Lord Lester, said that the High Court had said that 65 was unjustified. We believe that much is being made, understandably, of the comments by Mr Justice Blake at paragraph 128 of the judgment. The judge expressed some reservations about whether a default retirement age of 65 was justifiable in 2009; he did not advocate abolition of the DRA altogether, yet I well recognise that his comments carry weight. While I am on legal issues, but on quite a different subject, the noble Baroness, Lady Howarth, asked whether the draft directive being negotiated now would allow removal from a job at 65. The new draft directive relates to goods and services only, and the existing framework directive allows an employer to objectively justify a retirement age. I return to the review, which will consider not only whether the default retirement age is still appropriate and necessary, but these questions. How has the default retirement age operated in practice? What might the costs or unintended consequences of different policy options be, and how can they be mitigated? What more can be done to facilitate retirement planning and flexible retirement options? It is only through a proper review that these issues can be addressed. We believe it is right that policy decisions are based on evidence that is as robust, wide-ranging and detailed as possible. Of course, all the points raised by my noble friend will have to be taken into consideration. We need to include the Government’s own survey of employers, policies, practices and preferences, which is about to begin its analytical phase and involves a sample of over 2,000 employers. We have always said that we would review the need for the default retirement age and that our aim is to encourage a culture change away from set retirement ages. If, having considered the evidence, our review shows that the default retirement age is no longer necessary, we will abolish it. Equally, there may be other policy options that would better achieve the aim of encouraging participation in the workforce and the widest possible opportunities for all age groups, and I pay heed to the point made by the right reverend Prelate about younger people. I recognise that most noble Lords in the Chamber today wish us to act very swiftly. The review will need to analyse a considerable volume of evidence but I assure the House that the Government are not dragging their heels on the issue. We will need to reach a conclusion based on the evidence and consult on any proposals that flow from this. It is right that businesses are given time to prepare for potentially significant changes. We would, therefore, expect any changes resulting from the review to be implemented in 2011—not 2026 because that is quite a different issue. For that reason, while I understand why the noble Lord, Lord Pannick, mentioned the need for a sunset clause, I believe that would be rather a blunt instrument. It will be important to implement the findings of the review expediently but to have some sort of flexibility, and that is the best way forward rather than having a sunset clause. Whatever the way forward, we do not need to make changes or take a power in the Equality Bill; we can rely on Section 2(2) powers. A review based on all the available evidence is a better way forward than summary abolition and we should be wary of unintended consequences caused by abrupt changes to the law with no opportunity to consider them.