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Pensions Bill

I rise with the words of my noble friend Lady Thomas ringing in my ears: ““Say something nice, won’t you, Matthew””. So I will try. I start by paying tribute to the noble Baroness, Lady Howe. She may not know it, but in the dim and distant past I was special adviser to Roy Jenkins when he was Home Secretary, and I remember many meetings considering and discussing the scope of the Sex Discrimination Act. We decided not to introduce this sort of amendment, but life moves on. I am sorry to disappoint the noble Baronesses, Lady Howe of Idlicote and Lady Hollis of Heigham, on this amendment, given that we agree on so much. As the noble Lord, Lord Hunt, said, the gap in life expectancy between men and women has narrowed a bit but it is still substantial. It is life expectancy at 65 that matters, because that is the age at which one generally buys an annuity. I would be surprised if the gap were as little as three years at that level, but even if it is, that is very significant. We are not talking about 3 per cent or 4 per cent; three years on an expected life of, say, 20 years, is 14 per cent or 15 per cent, as borne out by the figure given by the noble Baroness, Lady Hollis. That is a significant difference in actuarial expectancy and the rate quoted by somebody in the market who is trying to make a profit. I did not agree with the noble Baroness, Lady Hollis, or with the PPI calculations. The best rate in the market can be 15 per cent better than the average, but by definition the best is not the average. On average, there is still a big difference. If everyone started getting the best rate, the market would then change very quickly. We will be moving amendments to encourage the widest choice, and annuities to be offered on the most actuarially correct basis. The noble Baroness, Lady Hollis, talked about social class. Will we say that insurance companies have to offer exactly the same rate for every social class? To carry the argument to its logical conclusion, we would have to offer the same rate for annuities to everyone, whatever their age, otherwise it would be age discrimination. There is a genuine theoretical problem and we are in favour of not interfering with the market. If there is a genuine and significant difference in life expectancy, whatever groups are involved, then, sadly, people should be free to quote accordingly. One cannot just say that this approach is wrong and that every other way of pitching this so that it is correctly market-adjusted is right. If such an amendment were passed, insurance companies would, for perfectly understandable reasons, try very hard to find ways of not selling annuities to women. Women would not be best served; unless there were a Star Chamber, the market would not work. I am sorry, but there is a genuine problem. Let us hope that the gap in life expectancy between men and women continues to narrow so there will not be a problem in future. As my noble friend Lord McNally said, if we are looking at social class, the people who ought to be paying the highest possible prices for their annuities are Members of this House.