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28 Jan 2003 : Column 852—continued

Compulsory Retirement Ages (MoD)

Motion made, and Question proposed, That this House do now adjourn.—[Charlotte Atkins.]

8.28 pm

Mr. David Laws (Yeovil): I am pleased to be able to raise this extremely important issue on behalf of a number of my constituents, although it will also be very relevant to many other people across the country.

The compulsory retirement age for people working for the Ministry of Defence was raised with me at my advice centres in Yeovil by a number of constituents who were employees working in the Ministry of Defence in the constituency area. I was surprised when they first told me that they would be forced to retire at the age of 60 because that appeared to go against the thrust of Government policy, including the Department for Work and Pensions Green Paper that was published recently. I told the individuals who came to see me that I would check matters with Departments but that I would be surprised if the Ministry of Defence was not about to change its view.

The Government's position is that we should no longer have a compulsory retirement age of 60 and that we should consider not only increasing it to 65 but giving people the option to work beyond that age if they wish. I refer hon. Members and the Minister to a statement that the Minister of State, Cabinet Office made to the House of Lords on 22 November 2000. He clearly said that:

"it is Government policy that there should be no unfair discrimination in the Civil Service on the basis of age."—[Official Report, House of Lords, 22 November 2000; Vol. 619, c. 807.]

The Treasury confirmed that policy as recently as this month in response to a question from me about compulsory retirement ages. In a written answer, it stated:

"Government policy as set out in last year's pensions green paper is to encourage people to work up to the age of 65 and beyond if they wish. Public service employers are reviewing their retirement policies to take account of that."—[Official Report, 23 January 2003; Vol. 398, c. 429W.]

The Department for Work and Pensions underlined the position of the Treasury and the Cabinet Office in a Green Paper in December and in a parliamentary written answer to me on 15 January, in which the Minister for Pensions clearly stated:

"The Government will continue to encourage all employers, including those in the public sector, to review their retirement policies to allow people who want to work beyond normal retirement age, and should they wish, beyond state pension age, to do so."—[Official Report, 16 January 2003; Vol. 397, c. 667W.]

Government policy in all the Departments that have primary responsibility for pensions—the Cabinet Office, the Treasury, the Department for Work and Pensions and the Department of Trade and Industry, which is conducting a review of the matter—is reinforced by the trend in European Union legislation. The Under-Secretary knows that the Green Paper that the Department for Work and Pensions presented last month confirms that the Government are developing proposals to outlaw age discrimination in employment and vocational training by December 2006.

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The Green Paper states:

"This accords with the EU Employment Directive on equal treatment. It will bring sharper focus on changing culture and attitudes regarding older workers, and offers us a significant opportunity to address wasteful discrimination that is damaging to the well-being of so many people in their fifties and sixties."

The Government confirm that, under the directive, which is due to be introduced at the end of 2006,

"compulsory retirement ages are likely to be unlawful unless employers can show that they are objectively justified."

In the light of clear Government policy, it is surprising and disappointing that the Ministry of Defence has declined to make any movement in its direction. I hope that I do not anticipate too much of the Under-Secretary's contribution from his letters to me on the subject in the past month or so. I should like to believe that he has had an opportunity to reflect on the powerful arguments that my constituents presented. Perhaps he will tell us that the Ministry of Defence will inch towards general Government policy.

I was disappointed to receive a response from the Under-Secretary in his letter of 23 January 2003. It suggested that, following a recent Ministry of Defence review,

"we had decided for the moment not to change our retirement policy . . . we believe we must strike the right balance between the business needs of the Department , the interests of our workforce as a whole, and the aspirations of those who wish to work for longer."

It is difficult to ascertain how that balance has been struck when the Ministry has so clearly rejected the trend of Government policy and EU law and declined to give people the opportunity to work beyond the age of 60 if they wish.

That is particularly surprising in the light of the fact that the Minister himself recognises in his correspondence with me that there is an EU review in this area and that under that review the Department will be forced to look again at this issue and probably to change its practices.

When we consider the reasons for the Ministry of Defence rejecting the Government's position in this area we find some even more surprising arguments being deployed by the Minister. I refer him to his letter of 30 October 2002 to me on this point, in which he appears to set out the policy of his Department and explain why it is different from that of the Government as a whole.

The Minister refers to four reasons for rejecting the movement of the Government as a whole towards giving people more choice in this area. The first is that there is, according to the Minister,

"no compelling business reason for us to retain people who currently have a normal retirement age of 60 beyond that age. Recruitment and retention in these grades is not generally a problem".

There are very many reasons to reject that line of argument. They are clearly set out in the pensions Green Paper. When I put that specific argument yesterday by telephone to one of my constituents and quoted the Minister's statement that

"Recruitment and retention in these grades is not generally a problem"

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my constituent told me that he did not find that particularly convincing, since he is being paid a recruitment and retention premium precisely because he is in a job where the Ministry of Defence needs his skills. Yet there is no presumption that he will be allowed to work on when later this year he reaches the age of 60. That seems completely irrational and unfair to him.

The second reason the Minister gives for sticking with the Ministry of Defence existing policy in this area is that, according to him,

"our review has highlighted the age structure imbalance in the MOD's civilian workforce which has arisen over the past 10 years".

The Minister goes on to explain that his Department, in particular areas, has a large number of more elderly people in employment and wishes to see that change.

That is a very strange argument. Many other Departments, many businesses, will have experienced the same sort of changes as the Ministry of Defence has experienced over the last 10 years, and their age structure will have moved in that way as well. The Ministry of Defence age structure will also in part have moved in that direction because the proportion of those in employment is becoming greater for the elderly age groups right across the economy.

Therefore, the reasons that the Minister gives seem particularly weak, and should seem particularly weak in this place, where the age structure would look rather similar—indeed, perhaps rather more serious from the Minister's perspective. It might be unsubtle of me, Mr. Deputy Speaker, to reflect upon the age and experience of those who preside over our proceedings, but if we applied the same sort of logic as the Minister is applying in this case we would lose many talented and experienced people who preside over, and are involved in, our activities.

The third reason the Minister gives for sticking with the existing Government policy in this area was linked to the second. It is that, according to the Minister,

"a higher retirement age would inevitably slow down the rate of upward movement through the organisation."

In other words, it would not create enough ability to bring on the good young people coming through.

The Minister himself at some stage in the not too distant future, perhaps shortly after the end of this Parliament, will begin to approach the age that we are discussing. I wonder whether it is in his mind that he should at that stage make way for some of the young people who were elected as Labour Members in 2001 and 1997. I wonder whether he is putting that proposal to the Prime Minister. He is nodding his head. I am willing to let the Prime Minister—the right hon. Gentleman is always faced with this sort of difficulty at reshuffle time—that the Minister, in spite of all his skills, is willing to put his post at the Prime Minister's disposal in order to make way for the able young people in the Labour party.

I do not find that particularly convincing. The Minister has a great deal of skill and experience; he knows his job well. We should retain such skills and abilities, and not assume that at the age of 60 people should be cast adrift in the way that the Minister appears to imply in his correspondence with me.

The final argument of the Ministry of Defence for sticking with the existing Government policy is that it may have to make further manpower reductions, that it

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does not want to have to make additional people unemployed, and that therefore it wants to focus its efforts to reduce the workforce on those aged 60.

To me, it is clearly ageist and clearly prejudiced to judge whether people should work in an organisation not according to their ability, competence and the skills that they have accumulated, but simply on the fact that they have reached some age that has been chosen arbitrarily. That is precisely the reasoning that the Department for Work and Pensions is seeking to challenge in its Green Paper.

I refer the Minister to chapter 6 of that document, which is entitled "Extending opportunities for older workers". He will see that the Department cites, with some admiration, employers who continue to employ many people who have reached or gone beyond 60. Employers such as the packaging company in south Wales referred to on page 97 point out:

"Our continuing profitability and success is a testament to the commitment, loyalty and productivity of our older workers."

The Minister is missing something there.

I am also disappointed because one of the final paragraphs of the Minister's letter acknowledges:

"There are good arguments on the other side too".

However, he merely mentions

"promoting age diversity and lessening hardship for those who have to leave".

He does not mention the importance of experience, talents, fairness and the fact that those individuals have accumulated experience, and therefore that training and other costs would necessarily be lower.

The Minister is missing a number of key points here, and the penultimate paragraph of his letter to me of October 2002 says:

"I cannot agree that our policy discriminates unfairly on the grounds of age."

That is very odd indeed, and it puts him in direct conflict with Ministers at the Department for Work and Pensions.

Today, I received a letter from the deputy general secretary of the Civil Service Pensioners Alliance on enforced retirement at 60 in the MOD. Mr. John Amos states:

"Our understanding is that the MOD is now the only one of the major Departments, which has refused to move from its policy of requiring all people to retire at age 60.


Some of our members have been victims of that policy, having been required to retire at age 60 irrespective of the fact that they were still doing a good job and irrespective of their financial commitments. Such a waste of commitment and expertise."

He points out:

"The MOD is going to have to fall in line eventually. It should have the good grace to do so now."

Discrimination on the basis of age should be no more acceptable in our society than any other discrimination. The reasons that the MOD is giving for sticking with its existing policy are weak and unconvincing. It must get its act together in this area. Its policy is out of step with that of the Department of Trade and Industry, the Cabinet Office, the Treasury, the Department for Work and Pensions, stated Government policy and the emerging EU legislation. It is wasteful, unfair, out of date and inefficient.

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In a few years, the Minister will have to come back to the House, or one of his successors will have to do so, to tell us—

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