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Lord Monson: My Lords, I shall pick up the point made by the noble Baroness, Lady Morris, from the Conservative Front Bench. I ask the noble Lord, Lord Lester, whether, if his amendment were to be adopted, it would be entirely illegal for employers to require older employees, over the age of 65, to undergo periodic aptitude tests so as to determine objectively whether they are still fully up to the job. Some people in their

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late 60s or 70s, and even in their 80s, believe that they are just as efficient and on the ball as they were 20, 30 or 40 years earlier. In some fortunate cases, that may be so, as my noble friend has just pointed out-and good for them. Other people in their late 60s and early 70s also believe that they are just as good as they used to be but unfortunately are not; without realising it, they are slower, more forgetful, less able to lift heavy things, to drive in conditions of poor visibility, and so on. Unless some objective test is allowed to determine whether they are in fact fully up to it, I see endless scope for conflict and litigation, as the noble Lord, Lord Campbell-Savours, has just pointed out. If such tests were allowed, it would solve many problems.

The noble Baroness, Lady Morris, also mentioned flexible working. I can see that it might be possible for larger firms, but for a business employing one or two people it might be extremely difficult.

I should also like to ask the noble Lord, Lord Lester, about the Foreign Office, which requires diplomats to retire at 60, when they are at the height of their powers and experience and so on. What about the Armed Forces and the police? What about airline pilots? Surely there must be some occupations for which there has to be an age cut-off.

Baroness Howarth of Breckland: I was not going to intervene in this debate but I should just like to ask for a couple of points of clarification when the Minister replies and to add to the debate about the meaning of retirement and skills and ongoing appraisal. I should say to the noble Lord, Lord Campbell-Savours, that there is a real mismatch in this country between the skills required for jobs and the people available for jobs, so job-blocking is not about where people are sitting. Many of them are very young people who need to be in at the start and to have opportunities, which I believe that the Government are working hard to give. There are literally thousands of young people waiting for places on those programmes. I have been looking at that for an inquiry that I am undertaking for the EU Committee on the European Social Fund. There is an issue about job-blocking.

On whether people are fit for work and the kind of work that they do, the noble Baroness, Lady Greengross, made it absolutely clear that if employers undertook proper, ongoing appraisals, which all good employers should do throughout their employees' working career, at any stage they would discover whether they should move him to a different area of work, whether he was safe in what could become unsafe work, or whether he had the aptitude to undertake it. In another organisation for which I work, we have set up a new appraisal programme. We have some very good people working at age 70, but we find that some of the younger people are unable to carry out that task.

We know that the Government are engaged in Europe in discussing the proposed Council directive on implementing the principle of equal treatment, including in the area of age as well as in the areas of religion, belief, disability and sexual orientation. It is clear in the directive that different treatment connected with age may be permitted under certain circumstances if it is objectively justified. Do the directive and objective justification meet the requirement that you can be

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removed from your job and retired simply because you have reached 65? On that issue, I agree with the noble Lord, Lord Lester. As the Government are negotiating on this directive and I understand that the Equality Bill will be commensurate with it, will the amendment of the noble Lord, Lord Lester, meet the directive?

Lord Monson: Does the noble Baroness agree that while it may be possible for a large employer to move an older employee to a less demanding job, it will not be possible for a small firm which has only one, two or three employees.

Baroness Howarth of Breckland: I agree, and I know both small and large organisations. The issue is the same in that you have to treat an employee equally. Clearly, if an employee is in difficulties, in danger or has an aptitude that prevents him carrying out the job, one of the provisions under the directive is that they should be retired if there are not alternative jobs. That is an option at the end of the day.

Lord Campbell-Savours: Does the noble Baroness accept that it is extremely difficult to prove that a person is not capable in many circumstances?

Baroness Morris of Bolton: In response to the query of the noble Lord, Lord Monson, about smaller firms and flexible working, smaller firms are the original flexible employers; unless they were flexible with their workforces they simply could not exist. I speak as the daughter of a small shopkeeper.

Lord Mackay of Clashfern: My Lords, I appreciate the general problem that these amendments raise. It is important to have regard to many different types of circumstances. As I understand it, these amendments apply only to employment in the ordinary sense. However, they have implications for other situations, as the right reverend Prelate the Bishop of Chester has pointed out. The other day, Sir Sigmund Sternberg suggested that one of the difficulties of the banks had been that they did not have older and wiser people on their boards. I am not sure that everyone will agree that that experience was absent from the boards of the banks, but that was his comment. So there are situations in which age and experience may be of importance.

A relevant consideration is the age structure for the judiciary, which, in a sense, is based on principles not very different from those referred to by the right reverend Prelate the Bishop of Chester in connection with the clergy. My recollection-I may be wrong about this-is that when the noble Lord, Lord Pannick, raised a question about age in the judiciary, the noble Lord, Lord Lester of Herne Hill was against having older judges in the Supreme Court. For all I know, these principles may be reconcilable, but it escapes me as to what that reconciliation would be.

Lord Lester of Herne Hill: That is not quite right. It was the noble and learned Lord, Lord Mackay, who brought down the age of retirement for judges and then the noble Lord, Lord Pannick, wished it to be abolished or raised again because of a particular problem that had arisen. I made it clear that for special reasons, which I can explain, connected with the judiciary-and, I dare say, with the clergy and other command organisations of that kind-a fixed retirement age was a desirable

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feature. In the case of the judiciary, it was desirable to get diversity so that it did not become a gerontocracy of white men.

4.30 pm

Lord Mackay of Clashfern: I thought I was giving way to the noble Lord, Lord Lester; I had not quite finished what I wanted to say. The fact that the noble Lord, Lord Lester, explains it in this way shows that this is not a particularly easy problem. As he said, this is a probing amendment. The point is that the Bill contains a commencement provision, so that even if the amendment was agreed, it would be possible to postpone the date at which it became law. It does not necessarily mean that it must be brought in immediately because it is approved. However, this is a probing amendment and I look forward with great interest to hearing what the Government have to say about it.

Lord Lea of Crondall: My Lords, I think there is agreement in this debate on one broad point: the world is changing fast. I quote one paragraph from a very good report, Working Better: The Over 50s, the New Work Generation, published on Tuesday by the Equality and Human Rights Commission:

"A large number of older people would like to carry on working; this requires more supportive policies and practices from employers. Employers with experience of employing mature workers say they offer knowledge and experience as well as loyalty, maturity, productivity, reliability and empathy with the growing population of mature customers. Yet approaches to retaining older employees, where they exist at all, often tend to be piecemeal rather than comprehensive".

That has been coupled with another point that goes in a slightly different direction: comprehensive can mean "one size fits all". Several speakers-notably my noble friend Lord Campbell-Savours, but many others-have given some of the industrial reasons for saying that, but there is still a huge dilemma.

As a former employee of the TUC, I find it interesting that the TUC has two trains of thought at present. On balance, I think it is saying that it supports the approach of the amendment. I am sitting on the fence, which is a comfortable place to sit for a short time, but I strongly support the review. I do not think I am being chicken, but it is a question that we cannot decide finally today. Perhaps my noble friend the Leader of the House will be able to say that today's debate will be reflected and taken into account in the review. It is last knockings, but there has always been something of a difficulty in meshing together Parliament and reviews. However, this is a golden opportunity.

The noble Lord, Lord Lester, made it sound as though there was not much of a problem in deleting from the top of page 167 of the Bill the point about unfair dismissal. However, his problem is different from mine in that I do not think there is a magic solution in his approach or in the words of paragraph 8(1), as it stands. Does it mean that a default retirement age applies to everyone in a company; or is an individual able to say that he or she personally would do something different from the company arrangements? Is that what is being said?

In the present construction, the new concept of a tailor-made retirement age-the age after which you cannot go to a tribunal-takes us back to square one.

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It leaves us in a position where the employer can dismiss you without any reason other than that you have suddenly reached retirement age. I presume that the employer says, "Good afternoon, sit down; you are dismissed because you are now retired". The person might say, "You what?"-in the vernacular-but they are dismissed in line with the Bill. It defies the common-sense use of English to say, "You are dismissed because you are retired". What happens if I do not want to retire? I am dismissed, full stop. That will not go away and it is difficult to solve.

Perhaps the most reverend Primate the Archbishop of York would ask the Archangel Gabriel to have a go at this but I doubt whether he would succeed. We are all still left in a difficulty. The Equality and Human Rights Commission has a couple of paragraphs on this point but it does not solve the problem any more easily. It supports the amendment but states:

"It should be noted that these amendments would not prevent forced retirement altogether. In exceptional cases, particular employers might continue operating mandatory retirement ages for certain jobs, provided their practice could be objectively justified. However, individual employees facing dismissal would be able to bring an Employment Tribunal claim arguing that the mandatory retirement age was an unjustifiable exception to the general rule against age discrimination".

That does not totally solve the problem but it is an interesting line of thought.

I must not go on any further; it has been a long debate. To end, I add a totally different point about what is stated on line 24, page 167 of the Bill. I have met this before on other Bills. Halfway down the page, it says that the,

"reference to the normal retirement age is to be construed in accordance with section 98ZH of the Employment Rights Act 1996".

I thought I ought to read that, so I went to the Printed Paper Office to get hold of the Employment Rights Act 1996 but could not find it. I went to the Public Bill Office but the staff there could not find it immediately. After about 20 minutes, they realised that something like Butterworths online tells you that it was in a statutory instrument, passed by both Houses in 2006. I will not read that out but have a suggestion for my noble friend to consider with colleagues. Perhaps she could write to me about it and put a copy in the Library. When Acts such as this have statutory instruments attached one after the other, the Printed Paper Office ought to staple into the front cover a list of things which are now changing. Otherwise, we sometimes have no reason to know that there is something additional being added.

The Chancellor of the Duchy of Lancaster (Baroness Royall of Blaisdon): My Lords, the intention of Amendments 102 and 103 is to abolish the default retirement age. Many noble Lords have, this afternoon, made a compelling case for doing this, but I am grateful to the noble Baroness, Lady Morris, and to my noble friend Lord Campbell-Savours for rightly alerting us to the practicalities. I was interested to hear the noble Lord, Lord Monson, talking about aptitude tests; I have worried fearfully about Members of this House and aptitude tests, I have to say.

Through the 2006 Employment Equality (Age) Regulations, this Government implemented, for the first time, a ban on age discrimination for the workforce.

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The ban covers recruitment, training and promotion. In addition, all employees were given a new right to ask to continue working beyond their employers' retirement age. The regulations also extended protection from unfair dismissal to over-65s, except in the case of a genuine retirement. Prior to 2006, employees had no protection from age discrimination, employers were free to set an earlier retirement age and over-65s had absolutely no protection from unfair dismissal. The regulations have therefore improved the legal position of older workers.

The default retirement age was introduced as one part of this overall package, and in response to significant concerns expressed by stakeholders during the consultation. A default retirement age is very different from a forced retirement age, as I am sure all noble Lords realise. The principal aims of the default retirement age were to facilitate workforce planning practices that businesses told us were essential, and to avoid an adverse impact on the provision of occupational pensions and other work-related benefits, such as group health insurance. We considered that it would help fulfil other policy objectives, including: protecting the dignity of workers at the end of their working lives; improving the participation of workers in the 50-64 age group, and encouraging culture change. We will need to reconsider those issues through the review of the default retirement age.

The Government, of course, welcome the fact that more people want, and are able, to remain in the workplace for longer, and that many employers are already adopting more flexible approaches to retirement. We are seeking to encourage that through initiatives such as Age Positive, linking with influential stakeholders, key business leaders and directly with employers to encourage the recruitment, training and retention of older workers, and flexible approaches to work and phased retirement. As the noble Baroness, Lady Morris, said, retirement should be a process rather than an event. We should indeed take into account better appraisal, management and training.

In addition, we have announced a new national guidance initiative to provide help for employers to plan and implement flexible retirement and flexible working practices. Through the review of the default retirement age, we will consider what further can be done to provide support for flexible retirement; there is much potential for win-wins here. Last July, we announced that we would bring forward the review of the default retirement age from 2011 to 2010. Moving swiftly after the High Court's judgment on 25 September, we announced on 15 October last year a call for evidence to be submitted by 1 February to inform the review.

In his introduction the noble Lord, Lord Lester, said that the High Court had said that 65 was unjustified. We believe that much is being made, understandably, of the comments by Mr Justice Blake at paragraph 128 of the judgment. The judge expressed some reservations about whether a default retirement age of 65 was justifiable in 2009; he did not advocate abolition of the DRA altogether, yet I well recognise that his comments carry weight. While I am on legal issues, but on quite a different subject, the noble Baroness, Lady Howarth,

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asked whether the draft directive being negotiated now would allow removal from a job at 65. The new draft directive relates to goods and services only, and the existing framework directive allows an employer to objectively justify a retirement age.

I return to the review, which will consider not only whether the default retirement age is still appropriate and necessary, but these questions. How has the default retirement age operated in practice? What might the costs or unintended consequences of different policy options be, and how can they be mitigated? What more can be done to facilitate retirement planning and flexible retirement options? It is only through a proper review that these issues can be addressed. We believe it is right that policy decisions are based on evidence that is as robust, wide-ranging and detailed as possible. Of course, all the points raised by my noble friend will have to be taken into consideration.

4.45 pm

We need to include the Government's own survey of employers, policies, practices and preferences, which is about to begin its analytical phase and involves a sample of over 2,000 employers. We have always said that we would review the need for the default retirement age and that our aim is to encourage a culture change away from set retirement ages. If, having considered the evidence, our review shows that the default retirement age is no longer necessary, we will abolish it. Equally, there may be other policy options that would better achieve the aim of encouraging participation in the workforce and the widest possible opportunities for all age groups, and I pay heed to the point made by the right reverend Prelate about younger people.

I recognise that most noble Lords in the Chamber today wish us to act very swiftly. The review will need to analyse a considerable volume of evidence but I assure the House that the Government are not dragging their heels on the issue. We will need to reach a conclusion based on the evidence and consult on any proposals that flow from this. It is right that businesses are given time to prepare for potentially significant changes. We would, therefore, expect any changes resulting from the review to be implemented in 2011-not 2026 because that is quite a different issue. For that reason, while I understand why the noble Lord, Lord Pannick, mentioned the need for a sunset clause, I believe that would be rather a blunt instrument. It will be important to implement the findings of the review expediently but to have some sort of flexibility, and that is the best way forward rather than having a sunset clause.

Whatever the way forward, we do not need to make changes or take a power in the Equality Bill; we can rely on Section 2(2) powers. A review based on all the available evidence is a better way forward than summary abolition and we should be wary of unintended consequences caused by abrupt changes to the law with no opportunity to consider them.

Lord Low of Dalston: Before the noble Baroness leaves the review, might I ask her one more question about it? Will the review consider statutory retirement ages for bodies like tribunals? On 1 December, I asked the noble Lord, Lord McKenzie, this question and he

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was not able to answer it at that time. He said he would write to me. I declared an interest in that my wife had recently been obliged to stand down as a member of the Care Standards Tribunal on reaching the age of 70. It was explained to her that, notwithstanding regulations on age discrimination, this was as a result of statutory retirement ages which applied to bodies like tribunals. Is this a point that the review of the default retirement age will look at?

Baroness Royall of Blaisdon: It would seem a sensible way forward. I cannot give any commitment today but I will certainly communicate with the noble Lord in another letter. In answer to my noble friend Lord Lea, I will draw the attention of those undertaking the review to today's debate. In relation to statutory instruments, et cetera, the statute law database is being continually developed with the aim of providing access to up-to-date Acts of Parliament, showing amendments which have subsequently been made. I will now finish on the amendments tabled by the noble Lord, Lord Lester, and ask him to withdraw his amendment in the light of today's debate.

Amendment 104 tabled by my noble friend inserts a power into the Bill for the Secretary of State to require employers with more than 250 employees to provide an age profile of their workforce.

Lord Lea of Crondall: I am very sorry to intervene, but would my noble friend register the huge dilemma that exists given that an employer can say, "Goodbye, this is your retirement day. You are dismissed because you are retired". This is the first time the employee has heard of it and asks, "Who told me I was retired? Who says what the retirement age is? What about collective bargaining?". I am not asking my noble friend to solve this Catch-22 situation this afternoon, but I would be very grateful if she could register that this point above all can be quickly brought within the review. It is the key point in this whole debate.

Baroness Royall of Blaisdon: My Lords, I hear what my noble friend has said and the best thing for me to do would be to respond to him in writing.

I return to the amendment from my noble friend. I would agree with her aim of encouraging further increases in employment among the over-50s, but I am not convinced the proposal would achieve this. First, we must remember that age discrimination does not only affect older people. The Fair Treatment at Work Survey 2008, which gathered comprehensive data on perceived unfair treatment in the workplace, showed that 17 per cent of 16 to 24 year-olds believed that they had been treated unfairly at work compared with 11 per cent of those aged 50 and over. Requiring businesses to have particular regard to the number of over-50s they employ could risk unfairly disadvantaging the young.

Secondly, particular firms or industries may have different age profiles, not because employers are acting in a discriminatory fashion, but because the work involved is more attractive to older or younger workers or perhaps because of the nature of the work itself. We must of course challenge outmoded stereotypes, but

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businesses are themselves diverse, and there may well be legitimate reasons for them to have varying age profiles.

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