Draft Equality Act 2010 (Age Exceptions) Order 2012
The Committee consisted of the following Members:
Richard Benwell, Committee Clerk
† attended the Committee
The following also attended ( Standing Order No. 118(2) ) :
Equality Act 2010 (Age Exceptions) Order
May I say what a pleasure it is to serve under your chairmanship, Mr Owen? I am pleased to present this draft order, which contains exceptions to a ban on unjustified age discrimination in the provision of services and the exercise of public functions. These exceptions were approved by the other place before the summer recess. They go hand in hand with the ban on age discrimination that we announced on 12 June. The order will come into force on 1 October 2012 through the Equality Act 2010 (Commencement No. 9) Order 2012. Subject to this House’s approval, the exceptions will also come into force on 1 October.
Unjustified age discrimination is already prohibited in the workplace, and the Government have abolished the default retirement age. Equality of opportunity is a core coalition objective. If age discrimination is wrong at work, it is equally wrong outside work. Discrimination, including age discrimination, can form a significant barrier to people’s opportunities in life, preventing greater freedom, mobility and choice. It is time to complete the task and end such harmful discrimination in the provision of services, an objective that had cross-party support during the passage of the Equality Act 2010. Therefore, from 1 October 2012, it will no longer be lawful, without good and sufficient reason, to provide inferior private or public sector services, or simply to refuse to provide them at all, because of a customer’s age or perceived age.
Harassment related to age and victimisation are wrong in principle and in all circumstances. They will be banned without exception. However, as far as age discrimination is concerned, we need to ensure that the new law prohibits only harmful or unjustifiable treatment that results in genuinely unfair discrimination. It should not outlaw the many instances of justifiably different treatment, or end such treatment unnecessarily. The order therefore sets out a number of targeted exceptions to the age discrimination ban. The exceptions are made by adding provisions to section 195 of the 2010 Act, and to schedules 3 and 16 to the Act, under the power in section 197.
The exceptions specify particular types of age-based actions, measures and practices that we consider to be justifiable, beneficial or needed for good public policy reasons. They will provide legal certainty for service providers and their customers. The extensive consultation on this issue in 2009 and 2011 helped us to decide where
Article 2 of the order is an exception for immigration that allows immigration authorities to continue to consider age among other factors when determining a person’s eligibility to enter and remain in the United Kingdom. Article 3 is a qualified exception that allows financial service providers, such as banks, insurance companies and credit reference agencies, to continue to use age to determine, for example, their products and their prices. This is a common-sense exception, because age is a key risk factor in insurance, as people of different ages carry different risks. However, that exception is qualified, because it requires any age-related risk assessments to be based on relevant information from a source on which it is reasonable for the provider to rely.
We know that some older people are particularly concerned about access to insurance, so we have endorsed a voluntary agreement by the insurance industry to improve such access. The agreement, which started on 6 April 2012, commits insurance companies to signposting or referring customers to different insurance providers if they do not or cannot provide cover. It also commits the industry to showing how it prices products by reference to age.
Article 4, which allows concessionary services based on age to continue, is probably the widest-ranging exception. It is particularly welcomed by small businesses, because it allows any provider of goods and services to offer age-based concessionary services or discounts. It would allow, for example, a hairdresser or a DIY retailer to continue to offer discounts to pensioners, while students or younger travellers may continue to be offered cheaper travel.
Article 5, which is an exception for age-related group holidays, is aimed at companies such as Saga or Club 18-30 that provide holidays for people in certain age ranges. There are a number of conditions, because we do not intend to exempt all holidays from prohibition—only those where mixing with people of a similar age is a key element of the product. The exception applies to holidays that are targeted at people of particular ages, and not to standard holidays or holiday accommodation, such as hotels, self-catering chalets, or cottages.
Article 6 covers age verification schemes under which retailers selling age-restricted products challenge customers who look below a particular age. The exception allows retailers to continue to ask for proof of age before selling products such as alcohol without that being considered discriminatory. It allows, for example, retailers operating the “Challenge 25” scheme to continue to request proof of age from customers who appear to be under 25. This is a new exception, which is being introduced following the earlier consultation; it has been welcomed by retailers and will support the Government’s aim of cutting under-age access to age-restricted goods, such as alcohol.
Article 7 covers residential mobile homes. It applies where a caravan or the like is a person’s main residence, and not a holiday let. It allows owners or operators of residential park home sites to continue to include age
Article 8 allows clubs and associations, such as golf clubs, to offer concessions to members above or below a certain age. That includes discounts for those who have been members for a number of years regardless of their age, and it will be for individual clubs to decide limits.
Article 9 permits the use of age restrictions in sport. There are many examples of sports that are classified by age bands at local, regional, national and international level, and it obviously makes sense to allow such age-banding to continue. The exception covers intellectual activities, such as chess or bridge, as well as physical sports.
I shall briefly cover the notion of objective justification in order to give a complete picture of how the ban and its exclusions will operate. Under the Equality Act 2010, it will be possible to justify treatment that would otherwise be direct or indirect age discrimination where it is a proportionate means of achieving a legitimate aim. The service provider will have to show that the aim is legitimate, and that its approach was necessary to achieve that aim. However, if it is challenged, it will ultimately be for the courts to decide what constitutes a legitimate aim. For example, a car rental company might have had a number of its cars written off by drivers aged under 25 or over 75. The company might decide that it did not want to rent out cars to people in those age groups, or that it wanted to charge those drivers more. The provider could seek to justify its decision by saying that customers in those age groups were shown evidentially to have significantly more accidents, and that renting vehicles to them reduced the company’s ability to have enough roadworthy vehicles to run its business efficiently. Secondly, it could demonstrate that the approach was proportionate to the aim. If someone then took the company to court for not renting them a vehicle or for offering them a vehicle on inferior terms, the court would need to decide whether the company’s aim was legitimate and whether, in all circumstances, its action was proportionate—in other words, whether the extent of age discrimination applied by the provider as part of its sales policy was necessary.
Similarly, a holiday cottage owner could not automatically exclude people below the age of 21 or 25 from renting one of their cottages, but they could perhaps do so if they were able to show that there was a good reason for doing so. For example, their property may have been trashed by younger people in the past— I make no inference whatever from that, because that would be discriminatory—and they may be able to demonstrate that they have a legitimate reason for not wanting to rent their properties to those of a particular age. They would have to prove that it was legitimate.
The Equality Act 2010 allows others forms of differential treatment in particular circumstances. For example, service providers can take positive action to alleviate disadvantage experienced by people of particular ages, to reduce their under-representation in relation to particular activities, or to meet their needs. For example, a council might run special courses on computing and IT skills for older people.
The Act also contains a statutory authority exception, which allows differential treatment based on age when that is required or allowed by statute. Examples include
There is widespread acknowledgement that we need to move to deal with the growing evidence of poor or inferior treatment of older citizens by health and social care providers. I am by no means saying that all who work in those sectors provide poor treatment based on age—that is not so—but all Committee members are aware of the considerable shortcomings exposed in a series of recent reports on the sectors. We are therefore not providing any specific exceptions from age discrimination legislation for health or social care. The NHS and social care sectors are taking great strides to improve the experience of older customers, but where things continue to go wrong, the ban will provide a valuable new means of redress for patients and people in care.
From 1 October, whenever different treatment is proposed or provided for patients because of their age, the health or care provider will have to justify that objectively. It is reasonable to expect those who commission and provide such services to justify their decision making. The order meets our intention of eliminating harmful age discrimination in an area about which great concern has been expressed by those on all sides. We are preserving the ability to use age factors where it is right to do so. This approach will contribute to ensuring that high-quality, dignified and compassionate care services are provided on the basis of need. I assure Members who have any concerns about the ban that its effectiveness and the proposed exceptions will be considered in a wider review of the Equality Act 2010 over the next few years. We will consider effects on business and the experience of customers.
The order is targeted, fair and proportionate, and we are confident that the action that we are taking strikes the right balance between business and consumer interests. The vast majority of businesses and organisations will be able to continue to operate as usual, and those in certain areas will be exempt from the ban. The new provision prohibits only harmful or unjustifiable treatment that results in unfair discrimination because of age. It will not outlaw the many instances of different treatment that are either justifiable or do not give rise to harm. On that basis, I commend the draft order to the Committee.
The Opposition welcome the introduction of the order and will not oppose it, but we are concerned about the scope of some of the exceptions, as presented. Those concerns were alluded to in the debate in the House of Lords on 17 July, when Baroness Howe asked whether the Equality and Human Rights Commission was happy with what is proposed. The Minister in the debate, Baroness Verma, sought to offer reassurance on that point. During the consultation, which the Minister rightly reminded us took place last year, the EHRC was clear about its position: where certain types of age-differentiated treatment are permitted, they should satisfy the general objective justification test under section 13(2)
The order before us is somewhat different from the one on which the Government consulted. That is, to a degree, understandable, as it is the nature of consultation that changes may be made, but the view of the EHRC, contrary to the impression that may have been given in the debate in the House of Lords in July, is that the exceptions in the order relating to financial services and concessionary services may now not fully satisfy the objective justification test.
In the House of Lords debate, Baroness Hussein-Ece specifically raised a worry about the breadth of the exemption for financial services. Age UK also has concerns about it, and disagrees with the Government’s assessment that the complaints about the financial services sector largely represent a failure of perception rather than actual evidence of discrimination and harmful practices. Essentially, the problem with the exception in the order is that, while a provider is required to make reference to relevant information in assessing risk, as the Minister said, there is no requirement for the information to be statistically or actuarially sourced, or up-to-date. Nor need it be comprehensive. Even if all relevant information is considered, a provider is not required to give any particular weight to it. Indeed, it could effectively ignore that information if it chose to.
Let me offer a real-life example to give some reality to our concerns. It was reported to me earlier in the summer by my hon. Friend the Member for Airdrie and Shotts (Pamela Nash). A young constituent contacted her about how insurance premiums for younger drivers are calculated. It seems to her constituent that his age has had a disproportionate bearing on the premium he is being charged for motor insurance, and that consideration of his driving record is not being given sufficient weight.
It seems that it could be difficult under this order to challenge age-discriminatory treatment. The Minister pointed out that the Government believe that that concern could be satisfactorily met by the voluntary code agreed with the insurance industry to ensure that there is publication of information on product alternatives and transparency about pricing. In our view, however, that does not go far enough. It presupposes that there are alternatives available at competitive prices—or, indeed, at all. Age UK carried out a mystery shopping exercise that showed that half of attempts to obtain travel and motor insurance for people aged over 80 were unsuccessful. Evidence from Which? showed that 95% of insurers excluded customers above certain ages from worldwide travel insurance policies, while 60% of motor insurance policies were not available to drivers aged 81 or above. Will the Minister tell us what assessment has been made of the existence of a genuinely competitive market to ensure that the voluntary code can have real effect, and how that has informed the order?
It is also of concern that financial products and services that are not risk-based, and where age has no obvious impact on risk, are included within the exceptions. What is the rationale for that? Lady Hussein-Ece has cited an example of an older person unable to obtain a credit card. An even stronger example might be that of an older person who is unable to access a basic bank
As drafted, the order offers insufficient grounds for challenging such treatment. I understand what the Minister said about not wanting to inhibit justifiable discrimination, but the exceptions under the Equality Act relating to gender or disability discrimination are more limited in scope. In the case of disability, a provider seeking to rely on the exception must show that it is reasonable to do so. In the case of gender, the assessment of risk must be based on statistical or actuarial data, and the differential treatment must be proportionate. It would be helpful to understand why the Government have taken a different approach in respect of age.
The Minister will also be aware that the European Union is considering a draft directive covering age and insurance. Given the recent European Court ruling on gender and insurance, it seems at least possible that the outcome of that consideration will be that the age exceptions before us are unfit for purpose and will either not be retained or at least have to be time-limited. Will the hon. Lady explain whether any thought has been given to future-proofing the order, and say what representations the Government are making to the European Union on the draft directive?
Turning to the exceptions in respect of concessionary services, the initial consultation suggested that those exceptions would be limited by a test of reasonableness, and that a concession or more favourable terms would not have the effect of preventing persons of other age groups from requiring the service. Those limitations do not appear in the order, and as a result, we believe that it is possible for a provider to use the concessionary services exception to circumvent the age discrimination ban. For example, pricing structures could be devised to discriminate against particular age groups in a way that would effectively prevent them from using the service—pricing them out of the service, in other words. That would be contrary to our understanding of Ministers’ intentions—indeed, to the intentions that they stated when they consulted on the order—and to the policy intention of the Equality Act.
Given those serious concerns relating to financial services and concessionary services, we are disappointed that the regulations are being debated in Parliament just under four weeks before they are due to come into effect, because that clearly leaves little time for re-drafting, if indeed the Minister is minded to take our worries on board. We therefore support strongly Age UK’s call for the provisions on financial services to be reviewed fully one year after their implementation, and for steps to be taken to revise them if there is evidence that they have adverse effects. I should be grateful if the hon. Lady would say whether she is willing to commit to such a
We recognise that other forms of redress are available to those who consider that they have been discriminated against. Consumers with age discrimination complaints about financial products might have recourse to the Financial Ombudsman Service. We hope that the Government will take steps to ensure that the ombudsman collects and publishes data by reference to all protected characteristics, including age. We should also be grateful to know the impact on the provisions of the change of role proposed for the Office of Fair Trading, given its forthcoming merger with the Competition Commission and the fact that its consumer protection functions are moving to local trading standards.
In the debate in the House of Lords on 17 July, Baroness Thornton said that there would need to be concerted effort by the Government to communicate the effect of the order to all interested parties. Lady Verma said that there would be guidance to do that. The Government Equalities Office has published guidance for clubs, associations and small businesses, which is available on its website. That is welcome, but there is more to raising awareness than simply placing guidance on a Government website. For example, what steps are being taken through the National Council for Voluntary Organisations, chambers of commerce, the Federation of Small Businesses, industry bodies and so on to maximise awareness of the order? What steps are being taken to ensure that the effect of the changes is understood across all Departments, and how can the Minister assure herself that the provisions are being given full effect? What auditing is being put in place within Departments and across Government?
Baroness Verma told their lordships that the Treasury and the Department of Health would publish their own guidance on the provision of financial and health and social care services respectively. I have searched both Departments’ websites and was unable to find anything up-to-date. I do not claim that it has not been published—the Minister may be able to reassure me on that point—but if it does exist, it is pretty well hidden. Will she ask her colleagues in those Departments to take steps to make that guidance more visible? If it is not published yet, when will it be published, given that, as I have noted, the order will take effect in less than four weeks’ time?
In conclusion, the Equality Act 2010 represented a significant step forward in addressing long-standing age discrimination, and we welcome the order that will at last give its provisions effect. However, in our view, the order has some deficiencies, and although we will not oppose it today, given our long wait to get even this far since the passage of the Act, we regret the failure to give full effect to the Act’s policy intention. I hope that the Government will keep the legislation under close review, as the Minister has suggested they intend to, and that, if necessary, revisions to the order will be introduced by the Government if there is evidence that their drafting is having an adverse or limited impact.
We want some preferential treatment to continue, such as free bus passes and discounts for older people, on the basis that those practices are beneficial. We are confident that the combination of the age discrimination ban and the appropriate exceptions in the order strikes the right balance between business and consumer interests.
I will try to answer some of the hon. Lady’s questions. She asked about the concessions, and about financial services exceptions being too wide, in terms of the objective justification test. The exceptions must be flexible if they are to be of use to service providers. The whole point of an exception is to remove the relevant service provider from having to make objective justification assessments, not to try to isolate a specific set of individual circumstances. If we tried to do that, the exception would risk becoming hugely complicated and difficult to understand, and would be likely to become a burden.
Part of our objective is that the order itself should exert pressure on service providers to check that the service that they provide is proof against any possible and further challenge. I know that Age UK has raised concerns about it; on that point, we will have to disagree. We believe, for example, that the voluntary code will work effectively. As I said, we will review that as we review the Equality Act, because we all want to get this right.
Kate Green: I am grateful for that assurance. Does the Minister agree that there is an opportunity to review the impact quite quickly, given that, as she said earlier, the voluntary code has been in place since April this year? A year from the actual introduction of the order would mean that the voluntary code would have been running for 18 months, which would probably be long enough to make a reasonable assessment of the order’s effect.
Lynne Featherstone: I will not give a specific commitment to any timetable, but I expect to hear from Age UK if its experience is that this is not working. The Equality Act is huge and extremely wide-ranging, and there is much that we need to review and keep an eye on.
The hon. Lady asked what market research in insurance had been done. We are working with the industry on an ongoing basis—rather than waiting for a review at a particular date and time—to test whether the voluntary signposting agreement is working. That is an ongoing process to check whether it is working to provide appropriate access to the market for adults of all ages.
The hon. Lady asked whether the EHRC was satisfied with article 4 on exceptions for concessionary services, because it raised the concern earlier that, as drafted, the article could be used to create artificial pricing structures. We have consulted the EHRC and other interested stakeholders throughout the consultation on the order. We have tried to take account of its views and concerns. We do not believe that our drafting approach will
The hon. Lady had concerns about signposting and whether insurance was available to older people. Oxera’s research for the GEO showed that no age group is excluded from the insurance or personal loan market. The research showed that 60 different motor insurance policies were available for an 85-year-old, and there were 60 single-trip travel insurance policies for those aged 85. Product availability varies, but there was not a lack of products that would result in older people not finding them. It was a question of signposting, knowing which companies would provide the service, and the need to suggest another service provider if the original one did not provide the service.
On the guidance published by the Government, we have published an overview of the ban that should be of use to both service providers and their customers. We have also provided quick-start guides for small businesses, private clubs and associations, and the holiday sector. Those guides are available in the equalities section of the Home Office website. We are preparing guidance for the financial services sector, and we have sought industry views on the initial draft. We regret that it has not been
We have also worked closely with the insurance sector to devise effective arrangements for introducing signposting for older customers and increased transparency in how age is used by the sector. That has been an inclusive process. The NHS practice guidance on the ban on age discrimination has been available to the service since May 2010. In addition, the Department of Health, in partnership with the NHS Commissioning Board Special Health Authority and NHS employers, is producing new guidance for the service that will be disseminated through the NHS chief executive’s bulletin, but I will undertake to find out for the hon. Lady why it is not on the website. I have not checked it myself.
I hope that I have answered the questions. When something new and as important as this is implemented, we need to keep a watching brief, in order to ensure that the ban and its exceptions are fully and properly implemented. Our intention is to change the status quo in which older people have experienced discrimination, but to maintain the things that we would all want to keep, and that are beneficial to the groups to which they are offered. I hope that the Committee will join me in approving the order as an essential step towards greater equality and respect for people of all ages.