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Mr. Curry: We are now embarking on a subject that is central to the Bill. We must address the disparity between the treatment of men and women. I have listened to the Minister's comments, and her arguments are well put but intellectually tenuous. She admitted that a similar investment made by someone of either gender would result in a different outcome in terms of the income paid annually. Because women live longer, that would accumulate, so the total amount paid would be greater.

We could take this point to a more logical conclusion, of course, and open the gap between the rates much further. Then you, Madam Deputy Speaker, who I hope will live to a ripe old age, would say about your private pension, "It was a pretty miserable income year on year but, by gum, it didn't half add up at the end of my life, so I did very well out of it." What matters is people's expectation of the amount they have to live on which supplements their other pensions. The annual income is what counts in these calculations, not just the length of time over which it is paid.

I have introduced the idea of a unisex annuity because I think that it must be addressed. I accept that it has some penalties and could depress the rate available for men. Because most people buy flat-rate annuities, because most people who buy such annuities are men and because men

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have a shorter life expectancy than women, women get a raw deal. More and more women are acquiring their own pensions and they are surprised at how low some yields are.

Equally, the life expectancy gap is closing. There has been much explanation this morning of what life expectancy is, including the seemingly perverse phenomenon that the longer one lives, the longer one is going to live. However, that gap is closing between the two sexes and, as a member of the male sex, I am rather relieved. So increasing numbers of women will see themselves as being penalised.

The Minister will say that our proposal has all sorts of nefarious consequences. I think that if there is a will to address this issue, and if we say that we must overcome the disadvantage for women, the industry will find a way of delivering. It is a matter of equity.

This is the first Government to appoint a Minister for Women. It is a daft thing to do—I have always opposed such a notion. So it is curious that they are resolutely reaffirming their ability to continue discriminating against women. Yet here am I, from the side of the House that is supposed to be frightfully traditional about these matters, saying that we must break this cycle of disadvantage. We must at some stage grasp the nettle. That is why this proposal is in the Bill; I am very happy to defend it and to oppose the Government's attempts to remove it.

Mr. Gardiner: I hate to go back into history any further than we have already done, considering that we have talked about the destruction of the temple in 70 AD under the Emperor Vespasian and the letters of St. Paul. However, I wish to refer to the Marine Insurance Act 1906 which, as the right hon. Member for Skipton and Ripon (Mr. Curry) is aware, is the consolidation Act upon which all insurance policies have to be written. It is one of the features of insurance that distinguishes it from activities such as gaming and gambling; they are based on risk, not certainty, and on the pooling of risk.

I believe that the right hon. Gentleman is inviting the House to breach one of those fundamentals. I know that he does not lack understanding about the functioning of actuaries, but he is seeking to gloss over why actuaries act in the way they do. Of course, it is the job of an actuary to predict the life expectancy of particular classes of people who want to make provision through annuity for their retirement. As my hon. Friend the Economic Secretary ably pointed out, on average, women live longer than men, and that is a fact of which the actuaries must take account.

Mr. Flight: Will the hon. Gentleman step back and deal with a conceptual issue? I cannot see why there should be any insurance regulation or law stating that people must pool risk on a gender-divided basis. Such provision was a custom in the past because of differences between the legal positions of men and women going back to the beginning of the century. However, whether one likes that or not, is there any argument for requiring in insurance regulation or law that the pooling of risk be divided between the sexes?

Mr. Gardiner: Let me give the hon. Gentleman some clear examples of distinctions that the insurance industry rightly and properly makes between classes of people for

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insurance purposes. Actuaries must take account of all sorts of distinctions. If a known factor that affects mortality exists in respect of somebody who is applying for a policy, it would be against the law for that person not to notify the provider. Indeed, annuities are one of the rare aspects of insurance on which one can say, "I am more likely to die," and receive a corresponding benefit as a result. It seems perverse, but curtailed life annuities with a known finite term rightly bring increased immediate short-term benefits for the years of life that remain to the policyholder.

As actuaries must work on the information that they have and project into the future the income base that is available to them to achieve a certain outgoing over the period projected for the class of person they are considering, it is absolutely right that they should take account of age profile discrepancies.

Mr. Flight: I think that the hon. Gentleman will find that certain ethnic minorities in our country have different life expectancies from those of indigenous people. Is he arguing that there is some obligation for those providing annuities to work out for particular ethnic minorities packages that are different from those for white Caucasians? The same point of principle is involved.

Mr. Gardiner: I am trying to make this simple point: actuaries work out expected revenue against expected expenditure. On that basis, it is proper that they should take account of the profile of the class of the customer in question in order to deliver the maximum benefit to that customer. I find it staggering that an hon. Member who is so well known in the House for his views on the freedom of the market and on ensuring that commercial activity is unfettered and unconstrained should be trying to impose restraints. A benefit is being provided to customers by allowing a differentiation that will accrue over time to the person who takes out the annuity.

1.30 pm

Mr. Curry: I am slightly puzzled about why there are so many challenges to such rules, which appear to discriminate against women, including challenges that end up in the European Court. As we are speaking actuarially, what odds would the hon. Gentleman give that in 10 years' time we will still be able to differentiate according to gender in the rates that are set for annuities?

Mr. Gardiner: As the right hon. Gentleman will have heard me say, I come from an insurance background, not a gambling one, so I shall not accept his wager.

Returning to ancient Greece, Conservative Members are proposing a Procrustean way of achieving equality. Procrustes was the—hopefully mythical—character who used to lay people down on his bed to see how they measured up to it. If their feet went off the end, he chopped them off; if they did not quite reach it, he attached a couple of ropes and dragged them out until they measured up exactly. The right hon. Gentleman said that there is currently inequality between men and women, but that is not so—actuaries are there precisely to resolve

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such inequalities. Amalgamating women and men would mean stretching out the women and chopping the legs off the men to achieve a kind of unitary Procrustean equality.

Mr. Curry: I hate to challenge the hon. Gentleman's mythology, but surely the present rules do precisely that. The way in which they operate short-changes women—in a sense, a constant shaving of ladies' feet.

Mr. Gardiner: I did not buy the company, as Mr. Ronson would say, and I do not buy the right hon. Gentleman's argument. There is short-changing over a short period, but exact equality over the whole period. The actuary's job is to ensure that somebody who has a lifespan of, say, 12 years, gets £100 a year, whereas somebody with a lifespan of 10 years gets £120 a year, so that each person ends up getting the same benefits. That is the current situation in law, which the right hon. Gentleman wants to change.

Conservative Members want to ensure that instead of those with shorter life expectancies getting more each year, but the same overall, those with longer life expectancies—who at present get slightly less each year, but the same overall—should be amalgamated down to a kind of middle way. I cannot believe it—here I am, a good new Labour politician opposing the middle way. Nevertheless, on this occasion I must do so, because that is what Conservative Members seek to impose through their misguided proposal.

Mr. Dismore: Having first declared an interest as a man—at least, I was last time I looked—I remind Conservative Members that there are certain biological differences between the sexes, one being that women live longer than men. My hon. Friend the Member for Brent, North (Mr. Gardiner) eloquently described the effect that that has on the arithmetic of calculating annuities. I remind the right hon. Member for Skipton and Ripon (Mr. Curry) of the point that I made on Second Reading, because he has still not come up with an answer to it. I said:

That is the essence of the argument. The right hon. Member for Skipton and Ripon is at risk of creating inequality between the sexes for the reasons eloquently set out by my hon. Friend the Member for Brent, North.

It seems paradoxical that Labour Members should advocate a position that, on the face of it, is contrary to our deeply held belief in equality for everyone. To achieve equality for everyone, we must recognise the fact that people are not equal in certain biological respects, such as age, and that can be done through the existing system of annuities. I passionately believe in equality, and the state clearly has a role to play in that, but should we regulate private sector rights?

The Select Committee on Work and Pensions has been discussing the State Pension Credit Bill, and we have produced a report on that subject which was published a

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couple of hours ago. We have made some important points about the need to ensure that women are properly catered for under the pension credit scheme, especially bearing in mind the fact that pension credit will probably favour women. We have also considered take-up. Those are important points for the state to take into account. On national insurance and old age pensions, it is vital and right that the state should have that equalising mechanism. However, is it appropriate for us to impose the state's will on the private sector?

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