7 Equal treatment of women and men as
regards goods and services
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14812/03
+ ADD 1
COM(03) 657
| Draft Directive implementing the principle of equal treatment between women and men in the access to and supply of goods and services.
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| Legal base | Article 13(1) EC; consultation; unanimity
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| Department | Trade and Industry
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| Basis of consideration | SEM of 23 April 2004
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| Previous Committee Report | HC 42-iv (2003-04), para 1 (7 January 2004)
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| To be discussed in Council | 1 June 2004
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information requested
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Background
7.1 Article 2 of the EC Treaty specifies establishing equality
between men and women as part of the task of the European Community.
Article 3(2) of the Treaty requires the Community to aim to eliminate
inequalities and to promote equality between men and women. Article
13(1) authorises the Council to take appropriate action to combat
discrimination based on (among other things) sex.
7.2 When we considered the draft Directive in January,
we noted that the Commission's explanatory memorandum said that
equal treatment is a fundamental right and that the exclusion
of individuals from access to the goods and services of their
choice is at best damaging to their self-esteem and may lead in
the worst cases to the compounding of social exclusion. In the
Commission's view, therefore, Member States should prohibit discrimination
in the access to and supply of goods and services which are available
to the public. Men and women who are the subject of proven discrimination
should be able to receive compensation.
7.3 The Commission's explanatory memorandum commented,
in particular, on the insurance industry. The Commission noted
that it is common for the insurance industry to offer women insurance
on terms different from those offered to men. Actuarial factors
are broken down by sex in order to evaluate separately the risks
of insuring men and women, especially in the life, health and
car insurance markets and in the calculation of annuities. Many
companies argue that the prices for and benefits from private
insurance products should reflect the real risks the companies
carry. In the Commission's view, however, differences of treatment
based on actuarial factors directly related to sex are not conducive
to the principle of equal treatment and should be abolished.
7.4 Article 1 provides that the Directive is to apply
"to all persons in relation to the access to and the supply
of goods and services which are available to the public, including
housing, as regards both the public and private sectors, including
public bodies". The Article goes on, however, to exempt from
the application of the Directive education, the content of the
media and advertising and goods and services intended wholly or
mainly for one sex (for example, single sex sessions in swimming
pools or the membership of private clubs).
7.5 According to the Commission's explanatory memorandum,
"goods and services available to the public" could include
access to premises open to the public; all types of housing; services
such as banking, insurance and other financial services; transport;
and the services of any profession or trade.
7.6 The Secretary of State for Trade and Industry
and Minister for Women and Equality (Ms Patricia Hewitt) told
us that the Government supports the Commission's proposal to
implement the principle of equal treatment between women and men
in the access to and supply of goods and services. The Directive
would ensure that all Member States operated the same standard
of legal protection against sex discrimination. Except for the
proposal to prohibit the use of sex as a factor in the calculation
of insurance premiums and benefits, the draft Directive is broadly
in line with the UK's existing legislation on the access to and
supply of goods and services.
7.7 Among other things, the Minister said that the
Government wished to explore both the intended meaning of "goods
and services" in Article 1 and the omission from the draft
of any mention of discrimination on grounds of gender reassignment.
The Government would be consulting the insurance industry and
consumer groups about the implications of the proposed application
of the Directive to insurance.
7.8 The Minister noted that the draft Directive proposed
that Member States should transpose its provisions into national
law within two years, with discretion to take up to another six
years to implement the ban on the use of sex-based actuarial
data. She said that these periods might need to be considered
further during negotiations.
7.9 The Minister provided us with an interim Regulatory
Impact Assessment and said that a full one would be submitted
later.
7.10 When we scrutinised the draft Directive in January,
we questioned whether the requirement in Article 10 for Member
States to "engage in dialogue with appropriate non-governmental
organisations which have … a legitimate interest in contributing
to the fight against discrimination on grounds of sex" was
consistent with the principle of subsidiarity. Moreover, quite
apart from the merits of Article 4 (banning the use of sex-based
data to determine insurance premiums), we considered that the
Article raised questions of proportionality.
7.11 We decided to keep the document under scrutiny
until we had heard the outcome of the Government's request for
clarification of the text, there had been progress in the consultations
with the insurance industry and consumer groups, we had received
the full Regulatory Impact Assessment and we had considered the
Minister's response to our points about subsidiarity and proportionality.
The Minister's supplementary Explanatory Memorandum
7.12 In reply to our question about whether Article
10 (the requirement for Member States to engage in dialogue with
appropriate non-governmental organisations) is consistent with
the principle of subsidiarity, the Minister of State (Industry
and the Regions and Deputy Minister for Women and Equality) at
the Department of Trade and Industry (Jacqui Smith) says that
the Government believes that the requirement does not go beyond
what is necessary to achieve the objective of combating discrimination
based on sex (Article 13 of the EC Treaty). If the issue were
left to each Member State, the dialogue might occur only in some
of them rather than across the whole of the Community. The Minister
also tells us that Article 10 is precedented by, for example,
Article 14 of the Council Directive on equal treatment in employment
and occupation.[13]
7.13 Commenting on the proposed application of the
Directive to insurance, the Minister says:
"The Commission has clarified the impact of
the Directive by stating that the only annuities to which this
Directive will apply will be those purchased from third pillar
pension schemes (ie those that are voluntary, private and not
part of an employment relationship). The Commission has also
said that insurers may take into account the relative proportions
of men and women in its portfolio of insurance contracts when
setting prices, provided that the prices charged do not vary according
to sex.
"The UK remains concerned that while much of
the debate around Article 4 has centred on the Commission's proposal
for unisex annuities, the proposal would affect all types of insurance
and related financial services, with consequences that have not
yet been fully identified. Following the Commission's clarification
as to which annuities will be affected, there is also a practical
difficulty in distinguishing between those annuities which will
be affected by this Directive and those which will not. The effect
on consumer behaviour of having some annuities priced according
to unisex rates and others, according to current UK commercial
insurance practice, is not known. However, the Commission's acknowledgement
that insurers can take sex into account (provided it does not
result in price differences based on sex) is a welcome development
that provides a measure of protection against adverse selection
for insurers and their policyholders.
"The UK currently has the benefit of solid,
successful, domestic legislation with regard to sex discrimination
in goods and services that enables insurers to use objective risk
calculations by reference to actuarial [and] other data on which
it is reasonable to rely. We believe that we should build on this
and that the Commission should undertake further research into
the costs and benefits of unisex insurance pricing covering the
[whole] range of types of insurance and related financial services
affected by these proposals. The Commission has said that the
Directive is not intended to apply to occupational pension or
social security schemes and is considering an amendment to make
this clear."
7.14 The Minister tells us that the Government and
other Member States are continuing to seek clarification of the
meaning of "goods and services" for the purposes of
the Directive. So far, the Commission has resisted calls for a
definition but it has proposed a new Recital referring to the
meaning of the words in the EC Treaty.
7.15 The Minister adds that the Commission considers
that discrimination on grounds of gender reassignment is covered
by the Directive even though it is not expressly prohibited by
the text.
7.16 The Government has held initial discussions
about the draft Directive with a number of insurance and consumer
organisations, including the Association of British Insurers,
the Women's National Committee, the Equal Opportunities Commission,
and the Consumers' Association.
Conclusion
7.17 We are grateful to the Minister for her helpful
replies to our questions. We note her views about Article 10 and
see no need to pursue the question of the subsidiarity of the
provision.
7.18 It would undoubtedly be useful if the Commission
were to do further research into the costs and benefits of unisex
insurance pricing. Indeed, this seems to us essential to the proper
consideration of the proposal to apply the Directive to insurance
and related financial services.
7.19 It remains our view that a clear definition
of "goods and services" is needed. It may be that the
new Recital to which the Minister refers will be sufficient, but
we reserve our views on that until we have seen the text.
7.20 We note that the Commission has provided
clarification of some aspects of the draft Directive, such as
the types of annuities to which the Directive would apply and
whether the prohibition on discrimination extends to discrimination
on grounds of gender reassignment. In our view, these assurances
need to be reflected in the text itself when it is next revised.
7.21 It appears that there is still a long way
to go in the negotiation of the draft Directive. We should be
grateful if the Minister would provide us with regular progress
reports. We also wish to see the Regulatory Impact Assessment
as soon as it has been completed. Meanwhile, we shall keep the
document under scrutiny.
13 Council Directive 2000/78/EC; OJ No L 303, 2.12.00,
p.16. Back
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