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Equality Bill

My Lords, Amendment 50 inserts exceptions for age-based holidays, financial services products for particular age groups and insurance based on evidence of risk. We entirely appreciate how keen noble Lords and businesses are to have certainty about what the ban on age discrimination in services will mean for them and we are equally keen to reassure them about our policy and approach on these matters. Exceptions to the ban on age discrimination will be in secondary legislation, in some cases supported by statutory guidance. The exceptions will come into effect on the same day as the ban itself. The policy statement we issued on 27 January reiterates that the future of age-related group holidays offered by Saga and other holiday providers will be secure when the ban comes into force. It makes clear that the financial services exception will allow firms to specialise in particular segments of the market by age. It clarifies that it will be possible to use age in financial services where it is relevant to risks or costs provided this is based on evidence. The policy statement also makes clear that firms will be required to help consumers find a quote for motor and travel insurance through signposting or referring them to another provider, and that there will be publication of some data about how age is used in some products in a form that the non-expert can understand, as is already undertaken for gender. I understand why there is an appetite for these kinds of exception to be written into the Bill now rather than later, but it is important that we get them right. We do not want any unintended consequences for valuable services or inadvertently to allow unjustified discrimination to carry on. That is why we will consult again in the autumn on a draft order containing exceptions, along with draft Treasury guidance on signposting, referral and transparency. Companies such as Saga and those in the financial services sector will have the opportunity to be involved in what the final legislation looks like, well before it is implemented in 2012. Amendment 51 closely resembles a new clause that we debated in Committee. It is worth stressing that age used properly is a valid criterion for pricing risk. Outlawing the use of age as a risk factor could actually mean higher prices or lower quality products for everyone. The research undertaken by Oxera showed that in general prices are fairly based on risk and higher prices are a result of genuinely greater costs. Restricting the extent to which the financial services industry can base prices on risks and costs would distort the market. The financial services exception to be set out in a draft order will allow financial services providers to treat people of different ages differently, but only where this is proportionate to risks and costs. This amendment focuses only on insurance and aspires to a particular outcome—that no one should lose out—but it does not help deliver it. It would be difficult for an insurer to demonstrate that there is no detrimental effect due to age, when there are so many different factors involved in pricing insurance. Where a complaint is made, it will be for the insurer to demonstrate that the provision does not create significant detriment by reference to age and leaves unanswered what would or would not constitute significant detriment in this area, thereby creating significant uncertainty. This shows how framing an exception is challenging, and why further discussion with stakeholders is required to develop an appropriate exception, and which, in particular, keeps uncertainty to the minimum. On the basis of these explanations and the reassurance that I have given, I ask the noble Baroness to withdraw her amendment.