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Baroness Royall of Blaisdon: My Lords, I welcome this debate on the report on Sexual Equality in Access to Goods and Services. While I am a newcomer to your Lordships' House, I am long acquainted with the excellent work of the European Union Committee and its scrutiny of European legislation.
I also very much welcome the proposal for a directive tackling sex discrimination in the provision of goods and services. As is the case in so much EU legislation, it was made in response to a request from the European Council. Its primary purpose is to ensure the implementation of the fundamental principle of equal treatment between men and women, which is of primary importance for a fair society.
As the noble Lord, Lord Williamson of Horton, pointed out, some people are frustrated by the pragmatic position that has been agreed by the committee, the Government and the Equal Opportunities Commission. Perfectionists may argue that there should be no deviation from the principle of equal treatment between men and women. However, while I fervently believe in the principle, I acknowledge that it cannot be achieved overnight in the real world.
The long journey towards equal treatment began when the principle was enshrined by the Treaty of Rome. We have not yet reached our destination, but amendments to the treaties followed by legislation and
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case law have taken us a long way towards it. In the UK, we now have relatively comprehensive legislation in that area, and I celebrate that.
I was interested to learn from Professor McColgan's evidence to the committee that the proposed directive will help to fill some of the gaps in our legislation. In addition, without the catalyst of EU legislation, real discussions about ending gender difference in insurance and annuities simply would not have begun.
It is right that the Commission should have made a radical proposal, but it is also right that practicalities should be considered in the member states. That is not because I wish to cosy up to the insurance industry; quite the contrary. I deplore its intransigent position, its unwillingness to adapt and to embrace change and the way in which it has used the media seemingly to whip up fears.
I accept the pragmatic position of the European Union Committee because that is the best way ultimately to achieve equal treatment for men and women. Yes, insurance companies will be able to depart from the principle of equal treatment, but only in strictly limited circumstances where up-to-date, relevant actuarial data indicate that there are very clear gender differences at risk. I am confident that with socio-economic change and careful monitoring of risk assessment and insurance practices in this area, within a few years the insurance companies will have to change because they will have to reflect the new realities.
As usual, I was saddened and frustrated by the way in which this directive was dealt with by both the press and the industry. Indeed, I seem to spend too much of my life being sad and frustrated because of tabloid treatment of the European Union.
"The 'Girl wanted to share flat' adverts which fill the accommodation to let columns are to be outlawed by Brussels",
said the Daily Mail. Even worse, the press has evoked fears of vulnerable women by alleging that, "hostels for battered women will be forced to take in men as well as women".
In fact, "Girl wanted to share flat" ads are not to be "outlawed by Brussels", and they never were. More important, there is no chance, and there never has been, that hostels for abused women will be "forced to take in men". I am sure it is right, as the report points out, that the wording should be strengthened for the sake of clarity, but it is utterly wrong and disingenuous to state, as some have done in another place, that this directive will mean, "less accommodation on the market and more women worried about safety".
The recommendations made in the report certainly improve the draft directive, and that is one of the purposes of scrutiny. We are particularly fortunate to have a European Union Committee that works in such a serious and effective way. While I am a strong supporter of the European Union, my support is not blind and uncritical. I recognise that in the past not all European legislation has been proportionate, and it could be argued that it has not always respected the principle of
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subsidiarity. The enhanced role for national parliaments under the constitutional treaty and their greater involvement in European decision making would, I am confident, help to avoid unnecessary legislation.
I also recognise that sometimes, as in the case of the proposed directive on sexual equality in access to goods and services, the rationale for the proposal is sound, but the consultation and analysis is sometimes inadequate and the text frequently sloppy. The Commission is vastly improving its consultation efforts, but clearly there is more to be done. I have to say, however, that draft Bills in our national legislative system are often imperfect and this House expends much time and effort in improving UK legislation. The fact that the directive, when ultimately agreed by the Council, will be rather different from the proposed directive is demonstrable proof that the decision-making powers of the European Union are quite properly firmly in the hands of the Council and the European Parliament, both of which are democratically accountable.
The European legislative process is undoubtedly complex, but it is becoming more transparent. I have to say that this contrasts sharply with the practices of insurance companies and actuaries. The committee itself expressed concern about the apparent lack of transparency in actuarial practices and the difficulty for non-specialists in understanding the basis on which actuarial decisions are made. Many witnesses shared this concern. Indeed, as a layperson and a consumer, I was struck by three points in relation to insurance companies.
First, their methods of calculation are opaque. They do not explain the basis on which their decisions are taken and their communications are unintelligible. Secondly, they seem unwilling to embrace any change, even when it might enable them to shape and better take advantage of developments in relation to the single European market in insurance and financial services. Thirdly, while it is clear that for the moment gender should continue to be used as a factor in life insurance and pensions, I wonder to what extent the industry really is willing to adhere to the principle of equal treatment and depart from it only in limited circumstances.
Like other noble Lords, I received a briefing note from the Association of British Insurers which said, among other things, that,
That is absolutely correct and I urge my noble friend on the Front Bench to ensure that "limited circumstances" really does mean limited circumstances. As a member of the Merits of Statutory Instruments Committee, I will certainly take an interest in future statutory instruments.
The subject of annuities is complex and I am no expert. Having read the evidence to the European Union Committee and the research undertaken by the Equal Opportunities Commission, I realise that at present there would be little advantage to most men and women in
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changing the basis on which life assurance and annuities are calculated. I also realise, as the report points out, that it would be inappropriate to use this directive as a mechanism for dealing with the very real problem of inadequate female pensions. However, as tomorrow is Carers Rights Day, I take this opportunity to highlight the fact that one of the reasons that women's average retirement incomes are just 57 per cent of that of men is because they are more likely to have caring responsibilities and therefore either to work part-time or to be absent from the labour market for long periods. Action must be taken to right these wrongs, but clearly we must use different tools.
In relation to life assurance and annuities, it is clear that much more independent work needs to be done on the assessment of risk factors when calculating premiums and benefits so that the principle of equal treatment can be achieved. It must be possible to take more account of risk factors, especially if the difference in lifestyle between men and women continues to lessen, and the gap between male and female longevity narrows. Why should an unmarried woman who smokes and lives in Wales, who statistically will be dead by the age of 73, pay higher premiums than a man?
The issue that received most press coverage when the proposal was adopted was that of motor insurance. We were urged to believe that the intention of the "meddlesome" Commission was to increase motor insurance for all women, whereas of course the real intention was to take sex out of the equation so that neither men nor women who drive safely should lose out. I accept that, for the moment, gender should still be considered for very young drivers where there is irrefutable evidence that most young men do not drive as safely as young women. However, past the age of 35, why should men who drive safely be penalised for their gender and why should bad women drivers be rewarded with lower premiums?
In conclusion, I warmly welcome this report from the European Union Committee as well as the proposed directive on sexual equality in access to goods and services. The latter is an important step in opening up the single market in insurance and financial services, and in achieving equal treatment for men and women across the 25 member states of the European Union. Where insurance and actuarial calculations are concerned, it is clear that at present there should be provisions for insurance companies to depart from the principle of equal treatment but, as I said earlier, only in strictly limited circumstances. Again, I urge my noble friend the Minister to ensure that the circumstances are truly limited.
Finally, I would specifically ask my noble friend for her assurance that the Government will consider favourably the recommendation made by both the Equal Opportunities Commission and the European Union Committee that independent monitoring should be undertaken in accordance with the principles of this directive, and in order to provide reassurance for consumers.
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