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Mr. Gardiner: If the amendment were passed, it would mean that, although men and women for the same annuity payment would receive the same return each year, women, who on average live longer, would on average gain substantially more than men. That is why the effect of the amendment would be to provide not equality but inequality.
Mr. Dismore: I entirely agree with my hon. Friend, but the amendment goes beyond that. To achieve that objective, we have to rob Peter to pay Pauline, because the money must come from somewhere. Nothing in the amendment creates a bigger pot of money to allocate. It equalises things between men and women. The only way to do that—as the woman has to get more for her contribution—is to take the money away from the man's annuity.
Mr. Curry: The hon. Gentleman asked whether it is right for the state to impose its will on the private sector. That is a welcome statement from him. As the Government keep boasting about minimum income and minimum wage, I am glad that he has had a Pauline conversion. [Interruption.] I do not know whether that is from Corinthians as well.
The Equal Pay Act 1970 has been amended by the Government. A series of measures show that they believe that they have a specific role to intervene in this area.
Mr. Dismore: At the risk of being sent off down the highways and byways of equal opportunities, I should say that the right hon. Gentleman points up the distinction between the right role of the state—in trying to regulate the balance between the sexes—and the wrong role. If a woman is doing work of equal value to that of a man, it is appropriate that she should get the same rate of pay. That is the position we are considering now. It is right that if a woman buys an annuity she should have the product of that annuity. It is right that if a man buys an annuity he should also have the product of that annuity. To achieve the same amount year on year, the woman would have to pay more.
The right hon. Gentleman is not trying to achieve equality through equal work for equal value, or in this case equal pension for equal contribution. He is taking money away from the man to meet the aspirations of the woman for her annuity.
Mr. Curry: The hon. Gentleman stated that one of the consequences of what we are proposing would be more demand, as it were, for a pot that was unchanged. The hon. Gentleman should read the Bill in its entirety. As people would not have to commit the whole of their
pension funds to an annuity, that part that would not be necessary to maintain them above the level of income could be used for other purposes. There would not be the same volume of demand chasing the same pot.
Mr. Dismore: In the end, there is no more money available in the overall pot. We can fiddle round the edges as much as we like and we can talk about taking an annuity to a later date. As I said on Second Reading, I have great sympathy with the right hon. Gentleman's overall objective of achieving annuity reform. At the risk of making a Second Reading point, the Bill does not provide a mechanism for doing that. As I mentioned to the right hon. Gentleman on Second Reading, I hope that the Select Committee on Work and Pensions will conduct an overall inquiry into private sector pension provision later in the year. I hope that the problem of sorting out annuities will form part of that inquiry.
I return to my basic bull point. Money is being taken away from one gender to compensate the other. The right hon. Gentleman referred earlier to Europe. The counter-argument is that in this context Europe—there was an earlier discussion about the convention on human rights—favours the view that is being advocated by Labour Members rather than the one advanced by Conservative Members. Has the right hon. Gentleman considered the implications of the Human Rights Act 1998, especially in relation to part II of the first protocol of article 1, which deals with the protection of property? It is straightforward:
- "Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."
Mr. Gardiner: I follow carefully and agree fundamentally with what my hon. Friend is saying. Does he agree that it is important that the movers of the amendment recognise that while they might talk about the class of people for actuaries to consider, and take a different class, they are proposing to introduce regulations that force actuaries to class all people together rather than, as at present, to determine for themselves, as providers of insurance, how they will classify their customers, unfettered by legislation?
Stringent regulation is being proposed of an industry that at present is able to offer diversity of service to its customers. If there were an insurance company that wished to pursue the proposals put forward by Conservative Members, and thought that it was commercially viable to do so, it would be free in the market to adopt that policy. However, there is not a
company that wishes to take that course. As good free marketeers, I am sure that Conservative Members will agree that that is why their proposals are wrong.
Mr. Dismore: I am grateful to my hon. Friend for his intervention. There is good reason why a company would not adopt that approach, and that is that it would go out of business extremely quickly. It would not be meeting the needs of its customers, whether men or women. My hon. Friend makes some important points, to which I shall return, concerning retrospectivity and the disincentive to save.
I return to the point that I was making in the context of the Human Rights Act.
Mr. Flight: There is an important principle in relation to the human rights argument. That is why I asked earlier what rules or laws were involved. Everyone understands that women live longer than men and why the situation is as it is. If white men lived longer than black men and white women lived longer than black women, we would not permit the insurance industry to offer different rates on the grounds of people's colour or skin. If we believe that men and women are equal, is there not a similar logic that we should not apply prejudice on the ground of sex, one way or the other, among all human beings?
1.45 pm
Mr. Dismore: I am grateful for that intervention. Again, the hon. Gentleman is mixing up the roles of the state and the private sector. The state cannot, must not and should not discriminate between gender or race along the lines that the hon. Gentleman mentions. Indeed, the state does not do so. We have been working very hard as a Government to improve sex and race discrimination legislation in a variety of sectors, including its applicability to government itself, to ensure that there is no discrimination, but I come back to the basic point that has been advocated by my hon. Friend the Member for Brent, North. A pension contract is an individual contract based on an individual annuity assessment between the individual pensioner and the pension-providing company, the life insurance company.
I took out my pension scheme with, I regret to say, Equitable Life—and thereby hangs a tale—many years ago when I was in my late 20s. Even though I was hale and hearty, I was required to undergo a medical examination so that it could determine, presumably through its annuity projections, how long I was going to live. I had to fill in a detailed questionnaire about my family history, what my grandparents died of, my parents' family history and my brother's medical history. The company wanted to calculate my life expectancy to ensure that I pay the right amount of money in my contributions and receive what I would like to receive at the other end. The same goes for when it calculates the annuity itself.
No doubt when I come to cash in what is no doubt a very diminished fund with Equitable Life, I will again have to undergo all the rigmarole to work out how much it will pay out. If I do not have to do so, so much the better. Nevertheless that is an individual contract between me and Equitable Life. That is why we all had to have the ballot on the Equitable Life solution.
Mr. Gardiner: Does my hon. Friend not agree that the hon. Member for Arundel and South Downs (Mr. Flight)
is wrong? The fact is that under legislation any insurance company is allowed to break down by ethnicity or by any other feature which it considers appropriate its class for annuitisation. For his own personal interest, he may care to note that ethnic minorities have differing life expectancies, and it works to their advantage on the whole because they get more each year on their annuity as a result. The point is that the hon. Gentleman is—
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