[David Taylor in the Chair]

E 02 Chartered Institute of Personnel and Development

E 13 British Humanist Association

E 14 Catholic Bishops’ Conference

E 22 Trades Union Congress

E 25 Equality Network

E 26 Association of British Insurers

E 27 National Union of Teachers

E 28 British Chambers of Commerce

E 29 YWCA

E 30 Gender Identity Research and Education Society

E 31 Race on the Agenda

E 32 Kate Phizackerley

E 33 Law Society

The Committee deliberated in private.

On resuming—

10:39 am
Photo of Vera Baird

Vera Baird (Solicitor General, Attorney General's Office; Redcar, Labour)

I beg to move,

That the Order of the Committee of 2 June be amended by making the following amendments to the Table in paragraph (2)—

(a) in the first entry for Tuesday 9 June, in the third column, at the end insert—

‘Muslim Women's Network

Board of Deputies of British Jews’;

(b) in the second entry for Tuesday 9 June, in the second column, leave out ‘12.30 pm’ and insert ‘1.00 pm’;

(c) in the third entry for Tuesday 9 June, in the second column, leave out ‘6.00 pm’ and insert ‘5.00 pm’.

To put it straightforwardly, the motion amounts to adding two witnesses to this morning’s sitting—the Muslim Women’s Network and the Board of Deputies of British Jews—and extending the sitting beyond 12.30 pm, when it was to end, to 1 o’clock. That will give a little extra time for the second panel of witnesses. The third provision shortens the afternoon sitting—the Committee’s opportunity to question Ministers—by an hour, reducing the time from 4 o’clock to 5 o’clock, instead of 4 o’clock to 6 o’clock. I hope that that will be agreed by the Committee.

Question put and agreed to.

Photo of David Taylor

David Taylor (North West Leicestershire, Labour)

I remind members and witnesses that we are bound by the internal knives—the timetable agreed to last week—which means that this morning’s first evidence session must end no later than 11.30 am, and the second no later than 1 pm. I hope that I do not have to interrupt members or witnesses in the middle of their sentences, but I will do so if need be.

I welcome the various representatives—you are most welcome. We will first hear evidence from the British Humanist Association, the General Synod of the Church of England, the Catholic Bishops Conference of England and Wales, the Muslim Women’s Network and the Board of Deputies of British Jews. Would you please introduce yourselves to the Committee and then we will get moving?

Maleiha Malik: I am Maleiha Malik, representing the Muslim Women’s Network. I am a reader in law at the school of law, King’s college, London, specialising in equalities and discrimination law.

Jon Benjamin: I am Jon Benjamin. I am the chief executive of the Board of Deputies of British Jews, which is the representative organisation for the Jewish community in this country.

Richard Kornicki: I am Richard Kornicki. I am a member of staff of the Catholic Bishops Conference of England and Wales. I have also been appointed as parliamentary co-ordinator for the conference.

Andrew Copson: I am Andrew Copson, director of education and public affairs at the British Humanist Association.

William Fittall: I am William Fittall, the secretary-general for the Church of England Synod and its Archbishops Council.

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David Taylor (North West Leicestershire, Labour)

Thank you. I am going to open up the questioning by passing the floor to Mark Harper.

Q 126126

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Mark Harper (Shadow Minister, Work & Pensions; Forest of Dean, Conservative)

Thank you, Mr. Taylor. It is a pleasure to see you here this morning.

I want to raise two issues, one of which has been raised specifically by the Catholic Bishops Conference. I will question its representative first and then other panel members can comment. The issue is the employment exceptions for the purposes of religion, and the changes between the Employment Equality (Sexual Orientation) Regulations 2003 and the Bill. The Catholic bishops say that the Bill narrows the exception, while the Government’s position is that it simply clarifies existing law. However, you can read it both ways. This specifically looks at the extent to which a particular religion or belief is a genuine occupational requirement of a job. Can I ask you, Mr. Kornicki, to set out your position and the extent to which you feel the language in the Bill does or does not significantly tighten or limit the exceptions in existing law?

Richard Kornicki: Our understanding is that it is a distinct tightening of the law. For example, the explanatory notes make clear that a youth worker would not be entitled to the benefit of the exemption. As this is now formulated, it represents a misunderstanding of how religion works. It is not simply an activity that takes place once a week in a particular place; it is about the whole of life. Important functions will be carried out that will be relevant to religious activity that might be more than, or different from, simply leading liturgical worship.

I can give you a brief example from The Catholic Heraldof 29 May, in which an advertisement was placed by the Catholic archdiocese of Liverpool for an “Assistant co-ordinator for Faith Formation (Marriage  and Family Life Ministry)”. It mentions a diocesan-wide role and a requirement to be a practising Roman Catholic. It is primarily concerned with teaching on marriage, family and life issues. It would be inconceivable that the Church would be required to appoint to that post somebody who was, for example, a flagrant divorcee in a parish who had remarried somebody else civilly, and demonstrated by their life publicly that they were wholly at variance with the teaching that they were supposed to be promulgating.

Q 127

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Mark Harper (Shadow Minister, Work & Pensions; Forest of Dean, Conservative)

Does anyone else have a comment on that, in either agreement or disagreement?

William Fittall: Perhaps I can endorse what has been said from the perspective of the Church of England. There is no doubt that this is a substantial narrowing of the present exemption, which talks of

“for the purposes of an organised religion”.

The narrowing is considerable, particularly under paragraph 8. The Government have a difficulty because they are bringing together various strands of discrimination and, in relation to some strands, the present exemptions are narrower than others. For example, exemption can be necessary in relation to gender, because the priesthood, bishops, rabbis and imams are confined to only one gender—that is quite a narrow restriction. However, there are other areas where we need a bit more scope than the provision provides.

The fundamental difficulty is that, if a religious organisation is imposing a faith requirement on a particular post—we have a lot of posts where we do not—and saying, “You’ve got to be an Anglican, a Roman Catholic, or whatever it might be”, we will, particularly for representational or pastoral roles, want people to lead lives that are consistent with the teaching of that particular Church or faith. Our conviction is that the provision does not allow for that. You might believe that some of our rules and disciplines are wrong, but our view is that that is a matter of religious liberty—a matter for the Church of England, Roman Catholics, the Jews or whoever.

We are not seeking carte blanche, but if a religious organisation is employing someone in a role for which you have to be a member of that faith, it is reasonable that restrictions—whether they be on marital history or whatever—can be part of the requirements. I think that the provision would prevent that.

Q 128

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

Others might want to come in on this subject, so I will not go on to a new topic. When you say “or whatever”, do you mean gay people as well? You gave the example of marital status, which means that gay people would fall into that category, would they not?

William Fittall: Gay people would not fall into that category because the Church of England does not discriminate on what we would describe as sexual orientation. The difficulty is that we have requirements in terms of conduct.

Q 129

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

If they behaved as gay people do, that would mean to have gay sex with someone, which would be outside marriage.

William Fittall: The discipline of many—in fact most—Christian Churches and many other faiths is out of line with what many people in society think. However, our view would be that that is the discipline of that organisation. If people are employed in a representational, pastoral or teaching role, the Government accept that there will be exceptions, but we are arguing about how broad those exceptions should be.

Q 130

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

Let us say that an Anglican who is a youth worker does a good job, gets rave reviews, and is doing well. He then comes out as being gay, his work does not suffer, and he is still doing well. Would your organisation, or an organisation of a Church nature, have the right to sack that person when they come out? Alternately, say someone’s marriage breaks down and they are having a terrible time personally. Do you think that you should have the right—whether you choose to or not—to sack someone on the basis of that private trauma, even though they are still doing a good job by objective standards?

William Fittall: There are two answers to that. First, I do not think that the example of youth workers given in the explanatory notes is correct. I do not believe that the provision, as drafted, would prevent Churches or other religious organisations from applying requirements to youth workers, because youth workers have a very important teaching role. There is a misunderstanding there. One of our difficulties is that this has appeared without any discussion with any of us on the panel.

On the second point, it is always difficult when people come into positions for which there is a requirement. Sometimes people are required to be of a particular faith but lose their faith when they are in the job. You face difficult pastoral situations there, but if there is a requirement that you have to be an Anglican or a Catholic, or one that refers to a person’s personal life, we would contend that you have to have the ability to impose those—both at recruitment and when someone is in post.

Q 131

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

So basically you are saying yes. We can argue about whether a youth worker is wholly or mainly involved in promoting and explaining the doctrine of the religion, or in providing activities for youths—that could vary according to the facts of the case. You are saying, just as when someone changes their religion, that if a person becomes sexually active, that is a matter for you, and it could be a factor in whether they continue with their livelihood.

William Fittall: We would say that if someone disqualifies themselves—

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

So you are saying yes.

William Fittall: I am not telling you what a particular bishop or employer in the Church of England would do, but a faith organisation is entitled to look at the totality of someone’s life. The distinction that is drawn in most employment situations between private life and the workplace does not hold where people have a representational, pastoral or teaching role. That is true on behalf of any faith, not only the Church of England or Christianity.

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David Taylor (North West Leicestershire, Labour)

I will call Lyn Brown and then Tim Boswell. I believe that Andrew Copson also wants to comment.

Q 132

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Lyn Brown (West Ham, Labour)

I want to pick up on a point that you have just made. You told us that different bishops might behave in different ways. The consistency of the Church of England’s position and the way in which it behaves across the country seems to depend on the attitudes of different bishops to different circumstances. Is that right?

William Fittall: I was asked a specific question about a possible individual case. In all religious organisations, you will find that people handle difficult personal situations in sensitive ways. The Church of England—and I think all faiths—has rules and standards. You will never get total consistency in practice, but certain rules are observed strictly by all bishops. For example, to take a non-contentious issue, bishops would not agree to ordain someone in the Church of England who was living outside marriage with somebody of the opposite sex. That person would either have to be married, or not be living together with someone. I do not think that the Bill trespasses on that, but I mention it as there would be consistency on that issue.

Photo of David Taylor

David Taylor (North West Leicestershire, Labour)

Sorry, Lyn, but a lot of people wish to speak. Do you have a further point?

Q 133

Photo of Lyn Brown

Lyn Brown (West Ham, Labour)

I would like to come back on that issue as I am interested in how much we need to understand about somebody’s life in the bedroom in order for them to be employed by the Church.

Photo of David Taylor

David Taylor (North West Leicestershire, Labour)

Mr. Copson, you wanted to contribute on this matter.

Andrew Copson: Obviously, we make use of the exemption in employment for our chief executive, for example, and for our funeral celebrants, who conduct non-religious funerals. As far as we are concerned, we are content that the provision gives us all the scope we need for genuine occupational requirements; we do not see it as a narrowing of the previous requirement. If it were a narrowing, however, we would support that. Our view, which you can see in the evidence from employment tribunals included in our submission, is that some religious organisations have been going well beyond what was allowed by the occupational requirement in the past. Although we would welcome a narrowing, we do not think that this is a narrowing, and we are content that it will let us do what we need to do on preferring non-religious people for a very limited number of posts.

Photo of David Taylor

David Taylor (North West Leicestershire, Labour)

I will call Tim Boswell. Perhaps colleagues will make it clear whether their question is aimed at a specific member of the panel or whether it is open for response. I will call Maleiha Malik in a moment.

Q 134

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Tim Boswell (Daventry, Conservative)

Thank you, Mr. Taylor. My question is to the two Church representatives, unless others wish to contribute, and it is procedural. Are some of the difficulties that we are clearly already in related to the fact that these matters  were not really consulted on? Can you give us a bit of history about when they were introduced to you, and your take on them?

Richard Kornicki: These matters were introduced to us when the Bill was printed. We had no sight or prior knowledge of them. We have good relations with officials. I sit representing both Churches on the senior stakeholders group, but there was no intimation of this at all.

Q 135

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Tim Boswell (Daventry, Conservative)

Thank you. It is understood from the earlier exchanges that we are trying to strike a relatively fine balance between the objectives of equality and not collapsing your position into an at-large licence for discrimination and the rather—as you see it—narrow provisions in the Bill. I noticed in particular that Mr. Fittall mentioned three tests: representational functions, pastoral functions and the third one, which came in as a side wind, teaching. I am not clear whether that is subsumed by the pastoral. Would an amendment along those lines achieve what you want, which is presumably to allow you to deal with situations of scandal or distress to the Church, but outwith the constraints of equality law, without collapsing your position to one of discrimination? How do you see the balance being struck?

William Fittall: That is exactly right. I should have said, as we did in our briefing to proceedings on Second Reading, that we broadly support the objectives of the Bill. Gay rights are important, and people should not in general be discriminated against in the workplace. You are talking about how to balance conflicting rights. The issue is where you strike the balance. Our contention is that it ought to be possible through judicious amendments to strike that balance more satisfactorily.

At the end of the day, we want equality. We also want to preserve religious liberty, which has been an important hallmark of this nation down the years. However wrong people might believe individual Churches or other faith groups are on some issues—whether it is their attitude to divorce, whether women should be priests or same-sex conduct—it must ultimately be part of the teaching of that particular faith strand.

Q 136

Photo of Sandra Osborne

Sandra Osborne (Ayr, Carrick and Cumnock, Labour)

I would be interested in what you think about the recent decision of the General Assembly of the Church of Scotland to enable a Church of Scotland minister to fulfil his calling in a church in Aberdeen? It was voted for by a majority in the General Assembly recently. My understanding is that he lives openly with his gay partner. Could anything in the Bill as drafted stop the Church of Scotland doing that? Would there be implications for how you want to amend it, for example?

I know that you cannot answer for the Church of Scotland and we have no representative of it here, but why did it believe that such action struck a balance between its pastoral care and not discriminating against a person?

William Fittall: I was really disappointed with the statement made by the Equality and Human Rights Commission for Scotland after the careful and finely balanced debate that the General Assembly had a couple of weeks back. The commission said:

“The values of fairness, equality, dignity and respect are of more worth than those of ignorance and intolerance.”

Well, that is a point of view, but there is a danger of polarising the two views. Lots of Churches are agonising over the issue. We saw in the Church of Scotland debate how it was agonising over whether it could move forward. It held two debates, one of which allowed the minister to take up his post in Aberdeen. Two days later, it called a moratorium on ordaining people in gay relationships and set up a commission.

The Church of Scotland is struggling with the issue. The Church of England is struggling with it; we see that clearly. The Anglican communion is struggling with it. Some Churches struggle with it less because they have clear views one way or the other. Our contention is that, whatever our particular position on the spectrum, such things must be worked out within the particular faith tradition.

Of course, we should not be allowed to discriminate, as you would see it, in relation to backroom jobs. The Government recognise that there is a sort of front-of-house role to assist the observation of “liturgical and ritualistic practices”—not a phrase that we would have come up with had we drafted the Bill—and promoting and explaining the doctrine of the religion.

The provision has been drafted narrowly and it creates some anomalies, too. It draws the line in a very strange place. It could enable discrimination against organists, but not youth workers. We need some discussion about that, as the Bill moves forward.

Maleiha Malik: I do not think that there is any evidence that there is a narrowing, but, like the British Humanist Association, we would very much welcome and strongly support any narrowing of the exemptions, for the following reason. The way the exemptions strike the balance between the rights of organised religion to discriminate and the rights of individuals to be free from discrimination is deeply unfair. It gives too much power to organised religions to police their internal members.

Our submission proposed the following amendment —a narrowing of the exemptions to subject them to requirements of reasonableness and proportionality, as in many Scandinavian countries. So, for example, an individual who had worked for a long time and then went through certain private law changes could not be summarily dismissed from employment.

Finally, we strongly recommended in our submission that the current position of having no supervision of how those exemptions are being used is unsatisfactory. We suggested that there should be an annual reporting provision. Those who exercise exemptions should report annually to the Joint Committee on Human Rights.

Q 137

Photo of Mark Harper

Mark Harper (Shadow Minister, Work & Pensions; Forest of Dean, Conservative)

I want to probe a slightly different aspect. I am fairly relaxed in those cases where there is a genuine occupational requirement for the Churches to be able to exercise their right to choose. What I am not clear about, which is the start of my question, is whether the Bill narrows the law.

Under the existing regulations, it is already the case that being of a particular religion or belief can be a genuine occupational requirement of the job. It is already the case in existing law, to pick up Ms Malik’s  point, that the requirement has to be proportionately applied. We seem to be arguing about whether the exact wording in the Bill around

“promoting or explaining the doctrines of the religion”

sufficiently captures those who are not doing so, such as those involved in pastoral work.

Looking at one of the examples given by the Catholic bishops, I would not think that a residential caretaker post was an instance in which being a practising Catholic ought to be an occupational requirement of the job, just because of contact with members of the Church. My reading of the Bill so far suggests that it does not actually—certainly not significantly—narrow the existing law, because the existing law says that it has to be a genuine occupational requirement of the job. What I am looking for is why you think it does.

The youth worker role, from what you have said about it involving the teaching of the religion and its nature, seems to me to fall within the exemption in the Bill. I am not clear what other roles you are talking about that would be excluded.

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David Taylor (North West Leicestershire, Labour)

Please keep questions fairly concise; we have a lot to do before 11.30 am.

Richard Kornicki: My understanding is that the previous legislative provisions did not define the purposes of an organised religion. That is defined in paragraph 2(8) of schedule 9, and it is that definition that effectively narrows the law. That is the change that has been made, as I understand it.

The point that we are trying to make here is that, fundamentally, this goes to the credibility of the post holder in performing their function. The youth worker may have a function that involves supervising teenage children in a church hall, in social activities. That is not formal teaching of religion, but the group may be coming up to their confirmation, and issues of religion will and should arise—issues of morality and of behaviour. It would not be credible for the person holding that post not to be in harmony with the teachings of the Church. The credibility of the function being performed would be at stake in such pastoral, representative roles if the person were not in harmony with the teachings of the Church. That is what we are looking at.

William Fittall: May I clarify? We are not saying that the religious genuine occupational requirement in paragraph 3 of schedule 9 has been changed; it is the other requirements relating to sex, marriage and sexual orientation, which come in paragraph 2. The interaction between those two is where you get the narrowing. In saying that something is a religious post, yes, that remains the same, but what requirements can be set in relation to marital history, sexual orientation, conduct and so on? That is where there is undoubtedly a narrowing—in paragraph 2(8).

Jon Benjamin: The discussion to this point has picked up a number of themes, one of which is the lack of uniformity, be it in the Church or the Jewish religion, over how these things will be applied. In the case of the youth worker who comes out or whose marriage breaks down, an important reaction may be that of the parents or the members of the organisation—how they would respond to that—and,  again, rightly or wrongly, whether the wider population would endorse that view. Their concerns and their rights to practise their religion and to have people interacting with them and their children must be considered.

There is a lack of uniformity, and I do not think that one can fairly press any one of us for an answer—goodness knows, in the Jewish community there is a great breadth of opinion on all those issues. Equally, it comes down to the nature of the occupation or the job. It is very difficult. Maybe Parliament should avoid trying to give a definitive black-and-white view on any of those things.

“Genuine occupational requirement” is a helpful phrase as far as it goes. “Reasonableness” and those words beloved by us lawyers also help, but ultimately, it will come down to not the courts, I hope, but the Equality and Human Rights Commission or whoever is providing guidance. I understand that the commission is considering providing guidance—perhaps statutory guidance—to help people, employers and potential employees through what will be a minefield.

It occurs to me that, taking the example of faith schools, which is an area I am quite involved in, it should be incumbent on employers to provide in the job specification some justification for what is a genuine occupational requirement and the mores and standards of behaviour and activity that they expect. Then, in all fairness to the applicants for a job, they would understand what was required of them and whether they would be comfortable working in a particular environment. That might avoid a lot of these problems down the line, but of course, one cannot foresee a marriage breaking down or someone’s lifestyle changing significantly.

Therefore, there is a very up-front and open approach to what is expected of people. Perhaps the document can be used in some evidential way to show whether the requirements of the community in which someone is seeking to work are set out clearly, so that they know what they are letting themselves in for, and equally, whether the community, the Church, the organisation or the religious institution has set out its stall clearly at the outset.

Q 138

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John Mason (Glasgow East, Scottish National Party)

We are quickly getting into the area of competing rights. In many ways, the Bill does not deal with it, or find any way out. Out of interest—if we have the time—I want to know from all panel members whether you have any suggestions about how we deal with competing rights. Is it your feeling that the courts have been tending to take the line recently that religion is at the bottom of the list, and if there are eight protected characteristics, will the Bill leave us with religion clearly at No. 8?

Richard Kornicki: I think the answer is yes. There is anecdotal evidence—I do not have details to cite—of the number of court judgments that have seen religion as a lesser right when compared to others. The worry is that the Bill sets up in a number of areas issues where different rights will be in conflict and different parties, both of whom are protected under the legislation, may claim the protection of the same legislation against each other. That is difficult.

It is regrettable that the Bill gives absolutely no indication of the means by which those issues are to be resolved. They have to be resolved, but at present every employer and public authority will be left not knowing what effect the law is intended to have. The result of that, inevitably, will be a chilling effect on public practice to avoid the risk of legal action.

Authorities at every level, with increasing gold-plating, will give themselves precautionary rules to prevent anything from happening. That ultimately means that public dialogue will be much less rich, and it will have a suppressive effect on freedom of religion. It is important to remember that article 9 of the European convention on human rights provides for freedom of religion, not freedom of thought. We are talking about the freedom to practise religion in full.

Q 139

Photo of Vera Baird

Vera Baird (Solicitor General, Attorney General's Office; Redcar, Labour)

As the Minister taking the Bill forward, it is my strong view that there is no narrowing in the definition. I would be pleased to follow the question that Mark Harper put to you, to try to get a clearer answer. Perhaps it is best expressed by saying that it is possible to have an exception. We are talking about licensing discrimination, and consequently you will all accept that that exception must be as narrow as possible. The explanatory notes best encapsulate that by stating that employment for purposes of an organised religion can exclude people if

“appointing a person who meets the requirement in question”

—presumably that is adherence to a faith—

“is a proportionate way of complying with the doctrines of the religion.”

That is the definition, which I do not think narrows down what went before. Perhaps you could help me. I assume that nobody wants a disproportionate way of complying with the doctrines of the religion. Why would you want more licence than merely that which is sufficient to comply with those doctrines? That is a two-pronged question.

Richard Kornicki: We may be at cross purposes. We are looking at schedule 9, paragraph 2(8), which gives a definition of employment for the purposes of an organised religion. I understand that that was not qualified under previous legislation. The Bill qualifies it quite strictly in two sub-paragraphs that limit it to

“leading or assisting in the observation of liturgical or ritualistic practices”,

or alternatively

“promoting or explaining the doctrine of the religion”.

The explanatory notes make it clear that a youth worker, for example, would be excluded under the provision. This relates to requirements relating to sex, marriage or sexual orientation only.

William Fittall: May I add a further point to answer the Minister’s question? The phrase “proportionate means” in sub-paragraph (6) was not in the earlier regulations on sexual orientation. Of course we do not want to argue that we should have disproportionate freedom, but it must be asked what the effect of this measure will be. This is a situation in which once complainants have established a prima facie case, the onus of proof is put on the defendant, which would be the religious organisation. Effectively inserting a requirement that someone has to prove that that is necessary—which is what the religious organisation  would have to do—would make this a higher case. In effect, you have provided that for priests, bishops, imams and so on, that would be okay, but we are saying that there is a wider range of jobs.

My director of ministry at Church house has a big representational role. He is not out there teaching the faith, but he is involved in organisation and selection of people for ministry. The director of communications for the Church of England has a representational role, and it would not be credible for him to do his job if he had been married three times and caused a scandal, or if he were a campaigning member for gay rights in a sexually active relationship. Given the Church of England’s position, that would not be consistent. Taken together, I think that sub-paragraphs (6) and (8) make it more difficult for us to impose our requirements. If that is not deliberate, perhaps we could discuss the matter further.

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David Taylor (North West Leicestershire, Labour)

I must interrupt: I am sorry but we are limited in time and I want to move the deliberations of the Committee to the part of the Bill that deals with the impact on religious organisations carrying out public functions. I call John Mason.

Q 140

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John Mason (Glasgow East, Scottish National Party)

On the question of public functions, the main distinction seems to be about whether the public sector as a whole has a duty to provide services. Within that, you could have lots of diverse groups providing those services, or does each individual group have to do everything? For example, the health service provides for abortions, but individual members can be involved in that or not. Similarly, with adoption agencies, schools or other organisations with public duties, do you feel that it is necessary that everybody deals with everything, or is it possible to have separate groups providing different ways?

Andrew Copson: Our view is that there will always be, to some extent, a mixture of provision in that way. There will be some clear needs, especially locally and in particular communities, to provide services by a certain group for a certain group. That is the way that a public authority could satisfy their obligations, but equally it might be the case for services that are delivered or co-ordinated on a national level that they are provided in the other way. However, I do not think that the Bill tends in one direction or the other. Our concern is far more likely to be that if organisations such as religious ones are providing a public function, they are held to the same non-discrimination rules as secular or state agencies and organisations that are performing public functions. That is something that the Bill does not fully do at the moment, because it allows religious organisations to discriminate in employment and in the provision of services, even when they are providing a public service under contract. We would say that they should not be allowed to. We make no judgment about whether it is right or wrong to allow religious organisations to contract to provide public services, but we say that if they do so, they should be subject to the same requirements as everyone else.

William Fittall: We want to say that you need to proceed with a bit of care in this area. If you look at schools, you have 1 million children in Church of England schools and many people in Roman Catholic schools and other faith schools. That is necessary,  accepted by the Government, and the Bill allows it to continue. The distinctive ethos of those schools should be preserved. Yes, there is public money going in, they are part of state education and they have to observe a lot of public requirements, and quite rightly so, but the notion that the Catholic, the Anglican or the Jewish identity of the school should be safeguarded by requiring that the head teacher is of that particular faith does not seem at all a strange proposition. The Government recognise that, and that is preserved by the Bill, although I know that the British Humanist Association is not happy with that. However, on that score, we want the Bill to remain as it is. If you are going to have faith schools as part of the state system, you need to allow them to preserve their ethos.

Jon Benjamin: It is self-evident that charities and voluntary groups, be they religious or otherwise, make a huge contribution to the welfare services in this country. My concern, again, is about apparent conflicts and managing those conflicts and interpretations.

If one takes the example of a care home for elderly Jewish people or a battered women’s refuge, clearly, they are providing a service, possibly because of the vulnerability of the beneficiaries, for a particular group or minority, religious or otherwise. They are providing a service. They may be doing it at some cost to themselves, therefore relieving the state or the local authority of that burden, but there is concern that the public duty of a local authority that procures those services will be interpreted differently from the exceptions that are quite legitimately open to the service provider. It is a matter of helping the people who will apply this to understand that, notwithstanding their public duty in terms of discrimination and equality, it is legitimate for a particular group to provide a care home for elderly Jewish people, battered Muslim women or whoever it may be. That conflict needs to be managed and explained.

Q 141

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

John Mason raised the question of opt-outs and conscientious objection, which exist in statute for abortion. Is it your contention, Mr. Kornicki, that there ought to be more opt-outs for people performing public functions—for them not have to do certain things on the basis of their conscience, religious or otherwise?

Richard Kornicki: What you are suggesting is a new approach to issues in the Bill. I would start from somewhere different, if I may. We are looking for a way in which we can recognise the ability of people to live their lives in accordance with religious teachings as they have done for a very long period, while being consistent with the requirements that the Government are now making. There is a balance to be struck here; in different areas a different approach might be the right answer. Opt-outs might be one answer for some issues—they exist already. There may be other legislative approaches which would achieve the same end, which is what we are concerned about.

Q 142

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

One opt-out, and only one, exists in respect of IVF and abortion. There are calls—amendments have been tabled—which argue that doctors should be able to say, “I am not going to treat Muslims, because my religion will not let me” or “I am not going to treat unmarried women who come to me wanting contraception.” Is that the sort of thing that you would support?

Richard Kornicki: Any professional person should have the right to act in accordance with their conscience. That is a fundamental human right that applies to everybody.

Q 143

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

So you are not making it compulsory—I accept that. But are you looking for the right of doctors and nurses to say that they are not going to treat gay people, unmarried women, or Muslims if their religion does not like them to do that? Is that the point—

Richard Kornicki: No, it is not. To pick up your example—one has to go back to sources— paragraph 2358 of the catechism of the Catholic Church says that homosexual people

“must be treated with respect, compassion and sensitivity. Every sign of unjust discrimination in their regard should be avoided.”

That is what the Church teaches.

Q 144

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

I would certainly endorse that. May I ask a separate question of Mr. Benjamin? There is an exemption in the Bill that allows religious organisations—even, as Mr. Copson said, those performing public functions—to discriminate against people who are seeking to access those public functions, based on their religion. You gave an example of a care home. How do you feel about a Catholic adoption agency saying that prospective Jewish adoptive parents need not apply?

Jon Benjamin: If an adoption agency is catering for Catholic families and helping them to have families and raise them in the Catholic ethos then I do not see a problem. There are agencies out there that will help all sorts of people—gay couples, whoever—to adopt and no one needs to feel that they have missed out. If there is a Jewish adoption agency providing a service for Jewish people, there is equality there. That is real equality, because people have a choice: they can go to the agency that works for them and their way of life.

Q 145

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

My last area of questioning concerns harassment. Can I ask Mr. Fittall whether he thinks that, in terms of the Bill, it is reasonable that children in school should be exposed to unwanted conduct if they are gay—conduct, for example, that violates their dignity and creates an intimidating, hostile, degrading or humiliating environment? Can you picture any circumstances where you think that that would be acceptable in schools, on the grounds of sexual orientation, in the terms that I have given?

William Fittall: There are two questions there. One is whether there are any circumstances in which it is right, and the second question is whether it should be made against the law. I entirely agree with you that there are no circumstances in which that should happen. However, as we have discovered after long debates on the harassment issue—in relation not only to employment, but to services and facilities and to harassment on religious or sexual orientation grounds—you quickly get into significant difficulty, because the definition of harassment has an objective element and a subjective element. You have to ask yourself the wider question: how far do you want the law to trespass into territories where good conduct is best promoted by example and encouragement, rather than by the force of law?

Q 146

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

I accept that, but do you accept that there is a difference between adults seeking to book a hotel and children who are a captive audience in school, where we know that there is a problem—which none of us would support and I am not accusing you of supporting this—of homophobic bullying, and being subjected to an intimidating, hostile, degrading or humiliating environment in school in front of their peers? By the way, I left out the word “offensive” because that is highly subjective.

William Fittall: Homophobic bullying is disgraceful, and a lot needs to be done. Church schools do their best to tackle it whenever it arises. It is a highly contested area. Let us be under no illusion. The whole question of gay rights remains highly politicised. Do you want to bring litigation into such matters or are they best resolved by other means? Our contention is that bringing the law into that area will not be particularly helpful.

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David Taylor (North West Leicestershire, Labour)

I will bring in Maleiha Malik, after which I shall bring in the Minister and finally, Tim Boswell, because I know that he wants to talk about public function and possibly multiple discrimination.

Maleiha Malik: On the issue of conscientious objection, there are provisions in the legislation through indirect religious discrimination provisions to allow some accommodation of religion and belief in areas such as the workplace. My organisation is strongly against further accommodation of conscientious objection, especially in the public sector for the following two reasons. First, we are very strongly against it when the conscientious objection in and of itself constitutes a breach of the constitutional right not to be discriminated against by another person. That would be the case, for example, of the Christian registrar—the Ladele case—who wanted the right not to perform civil partnerships. The case was decided in an industrial tribunal and we endorse the decision of Mr. Justice Patrick Elias at the Employment Appeal Tribunal, who held that, in fact, she had no right to conscientious objection. Our pragmatic reason is that it is wrong, as a matter of principle and practice, to send out a signal that there can be segregated public services when public officials should, rather than setting the tone of discrimination law, be at the forefront of discriminating against users of public services.

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Vera Baird (Solicitor General, Attorney General's Office; Redcar, Labour)

I wanted to ask about multiple discrimination, but Tim was about to ask about it.

Q 147

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Tim Boswell (Daventry, Conservative)

The Government’s suggestion is that it should be possible to provide for multiple discrimination protection when there are multiple protective characteristics. Will that make the law simpler or will it create further complexities, which will be difficult to navigate other than through the courts?

Maleiha Malik: The law is already very complex on that because the different grounds of discrimination mean that people are picking and choosing the grounds. It is actually being resolved. We proposed two things.

Q 148

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Tim Boswell (Daventry, Conservative)

But is there an added benefit of looking at them ensemble?

Maleiha Malik: There is an added benefit in the sense that you capture certain types of harms that otherwise slip through the cracks. It also allows a  greater degree of flexibility for courts in terms of remedies. The most important area in which it is useful is, for example, when an individual falls within race, gender and sexual orientation. That must be the area at which the discrimination law is targeted because they are the most vulnerable people whom the discrimination law wants to protect.

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David Taylor (North West Leicestershire, Labour)

Any further questions for this particular set of witnesses? I have speeded you up a little too much. We seem to have a minute left. If hon. Members have no further questions, I thank the witnesses very much for coming along today and answering their questions. I am sorry if I had to move them along from time to time.

I am now about to ask the next set of witnesses to take their place during which time my colleague, John Bercow, will take over as Chair of the Committee.

[John Bercow in the Chair]

Q 149

11:31 am
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David Taylor (North West Leicestershire, Labour)

Good morning to the next five witnesses. My name is John Bercow; I am the Member of Parliament for Buckingham and am in the Chair for the next evidence session. We are due to hear evidence from representatives of the Confederation of British Industry, the Association of British Insurers, the Federation of Small Businesses, the Chartered Institute of Personnel and Development and the Trades Union Congress. Welcome to our meeting this morning. I ask each of the witnesses, please, to introduce themselves to the Committee—starting with Stephen, on my left.

Stephen Alambritis: I am Stephen Alambritis, head of public affairs at the Federation of Small Businesses.

Nick Starling: I am Nick Starling, director of general insurance and health at the Association of British Insurers.

Dianah Worman: I am Dianah Worman, new diversity adviser for the Chartered Institute of Personnel and Development.

Sarah Veale: I am Sarah Veale, head of equality and employment rights at the Trades Union Congress.

Katja Hall: I am Katja Hall, director of employment at the CBI.

Q 150

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John Penrose (Shadow Minister, Business, Enterprise and Regulatory Reform; Weston-Super-Mare, Conservative)

It is a pleasure to have you in the Chair, Mr. Bercow, and at short notice.

I want to ask each of the panel members quickly some questions about gender pay audits. I was particularly struck by some of the estimates in the impact assessment—the costs of a gender pay audit for companies in the private sector. Pages 138 and 139 of the impact assessment say that the one-off implementation costs of a gender pay audit would be £92.24 per company and the ongoing, annually recurring costs would be £15.38 per company. Do any of you have views on how realistic those costs are?

Katja Hall: We think that those costs are an underestimation of the real costs involved. Possibly the reason for that is that, in calculating the figure, the people doing the impact assessment have not taken  into account what must lie behind coming to that figure. The truth is that there is a lot of background work that needs to be done first by companies, which is particularly true for small firms. Many of our members have said that, in order to produce accurate statistics or gender pay audits, they would need to use external consultants, for example. Unfortunately, few of those charge £92 or £15, so we think that the costs are likely to be much higher than those in the impact assessment.

Q 151

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John Penrose (Shadow Minister, Business, Enterprise and Regulatory Reform; Weston-Super-Mare, Conservative)

Do you have any idea, roughly, what order of magnitude you would expect?

Katja Hall: We do not have any statistical figures. We have asked some of our members what they think the costs involve in doing pay audits. The views range. One member said that they think the cost is equivalent to having one employee working on nothing else for a month or two. That was quite a small firm. A medium-sized firm with about 700 employees—if I remember correctly—estimated the cost of a pay audit to be £14,000.

Q 152

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John Penrose (Shadow Minister, Business, Enterprise and Regulatory Reform; Weston-Super-Mare, Conservative)

Does anyone else on the panel have a view on this?

Sarah Veale: It is probably quite difficult to make assessments. I assume that questions have been asked of companies that already do it, which could produce a realistic figure and say, “It costs us this much.” There are huge variables between different sectors. A lot depends on how companies organise themselves. A well-organised company with a good payroll system ought to be able to identify such things relatively cheaply. If you have never done it before, it will be front-end loaded. The first time you do it, it will cost quite a lot, but as soon as you have got it into your systems, and you are doing it regularly, it would not be a particular administrative cost. For a smaller firm it is a different exercise. In a very small firm, you can simply look around and you will know almost off the top of your head who has paid what for doing what.

Q 153

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John Penrose (Shadow Minister, Business, Enterprise and Regulatory Reform; Weston-Super-Mare, Conservative)

And the Government are only proposing it for businesses with 250 employees or more, I think. The Government would agree with you that it would cost more up front. They think the set-up costs would be £92 and then £15 ongoing. Does that seem reasonable to you? Does anybody else on the panel have any evidence? Have any of their members been consulted on whether these are reasonable?

Sarah Veale: It seems reasonable to me if you agree with the principle that you should eliminate gender pay discrimination. If you are going to do that, you have to find out where it is going on. You might find that it is not going on, in which case that is good for your company.

Q 154

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John Penrose (Shadow Minister, Business, Enterprise and Regulatory Reform; Weston-Super-Mare, Conservative)

Sorry, I mean is the cost a reasonable estimate of the true cost?

Sarah Veale: As I said before, it varies so much from company to company. You are always going to get a very crude analysis, unfortunately, so I would not like to say.

Stephen Alambritis: We are very relaxed about this aspect of the Bill. As you know, it applies to companies with more than 250 staff. That is 9,000 companies in total out of a company ratio of 5 million in the UK. We have a pyramid system. We have millions of tiny small businesses and just a few thousand very large companies. The vast majority of small firms would be excluded from this, so we are very pleased with that aspect. It could be that some of the costs would be passed on through the fees from organisations like Sage and through the accountancy profession. But small firms would be completely and totally excluded from the imposition, and we are very pleased. We lobbied for that and got it.

Dianah Worman: I cannot comment on the costs. As Sarah said, it probably varies from organisation to organisation, but where we come from, it is just good business sense to know how you are spending your money and how you are managing your pay bill. Your approach to that ensures that people who work for you feel that you value them appropriately. So our position is to encourage voluntary activity because it is just a common-sense way of managing things. The costs may vary, but why would you pay money out to people without knowing whether it is effective? We encourage the voluntary approach—very much so.

Q 155

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John Penrose (Shadow Minister, Business, Enterprise and Regulatory Reform; Weston-Super-Mare, Conservative)

Thank you. Can I move on to the broader issue of the gender pay gap and how one addresses it? I expect and hope that everybody here would agree on the principle and importance of trying to deal with it. I am interested in how much of the gender pay gap you believe can be sorted out within companies, as opposed to it originating there and needing to be dealt with through action elsewhere in society and the community as a whole. Equal Opportunities Commission research says that 38 per cent. of the gender pay gap is due to

“other factors associated with being female”,

which include “direct discrimination”, and also a variety of indirect factors and “systematic disadvantage”. I am concerned that we might be looking at a relatively small proportion of the gender pay gap in company activity and action. Do any of you have views on whether that analysis is correct?

Stephen Alambritis: Firms in the UK small business sector typically employ 10 or 20 people. The staff have a very close relationship with the employer and talk to each other regularly. We believe that the element of a gender pay gap within the small firm sector is very tiny. I have used the word “sector”, and the best way to address the gender pay gap is to look at it sectorially. It is particularly such sectors as those involving catering, supermarkets and part-time work that might require company targeting. In terms of business size, we do not think that any exercise within the small firm or research sectors would unearth huge gender pay gaps.

Sarah Veale: I would suggest that there are a number of contributory factors, as is suggested by research from the Equal Opportunities Commission. The TUC has never said that the gap is due solely to the fact that employers are discriminating, either indirectly or directly, but there is clearly a sex discrimination element, which is why pay auditing is important. There are other huge extraneous factors, such as the availability of flexible working, and measures to facilitate women returning  from maternity leave and to provide the extra training that they might need to catch up. It is a complex picture, and a lot will depend on what the company does and what sort of people it is trying to recruit.

We would still argue that sex discrimination—usually indirectly, but occasionally directly—is an important factor, and something within the employer’s control. That is why the TUC has been concerned to ensure that measures are in place to work out what the problem is and to promote workplace solutions. We are pushing hard at the idea of developing people within the work force who can work with employers to identify and deal with those complicated issues, and we hope that the Government will support that. Union equality reps should be given the statutory rights that other union representatives have to help employers to work on equality issues and eliminate discrimination. That would save the public purse a lot of money on often unnecessary litigation, and it would solve systemic problems in the workplace, which is where they need to be solved.

Q 156

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John Penrose (Shadow Minister, Business, Enterprise and Regulatory Reform; Weston-Super-Mare, Conservative)

I want to ensure that others have a chance to answer that point, but I think that the Government’s estimate is that there will be a 1 per cent. reduction in the number of tribunal cases as a result of this. Do you think that that is a large benefit—and is that figure right?

Sarah Veale: I think that you can get far more than that just on matters of equal pay, which is now one of the biggest jurisdictions in the employment tribunals. If we can deal with an unequal pay system, that would remove literally thousands of claims from the tribunal system for a large workplace. As long as it is pitched right, the training is available and people can have the time off to do that training, we could effectively take a lot of cases out of the system. I think that the number would be far more.

Q 157

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John Penrose (Shadow Minister, Business, Enterprise and Regulatory Reform; Weston-Super-Mare, Conservative)

That is useful—[Interruption.] I am sorry, I should allow others to respond.

Dianah Worman: As Sarah was saying, there are a lot of issues that can cause problems. Poor management practice can lead to issues of unfair or unequal pay, which is why the auditing process is very important. Digging deep to find out the causes of the situation would mean that an employer could manage their pay bill far more effectively.

This is a complicated matter, and there are many issues that are not under the direct control of the employer. There are issues about women preferring to make decisions about what jobs to go for, and the trade-off decisions that they might make in terms of access to part-time work versus pay levels—that is very important—or the distance they need to travel to work. Another issue might be the confidence levels that women have regarding bargaining for pay in the first place. Those complicated issues must be dealt with on all fronts, not just left as the responsibility of the employer. Employers need to get their act together, and it is common sense for them to do so, but we need to work in partnership on this issue and not simply depend on the usual defence of market rates. Market rates can have an inbuilt bias, and we must be  conscious of those dimensions and ensure that we work together more coherently to deal with the gender pay gap.

Katja Hall: We agree that the causes are complex, and if we want to make progress, we must find a holistic solution that tackles the education system, the choices that girls and boys make at school and the fact that vocational training still has such a strong gender bias. We must also look at child care and the choices that women make to take time out of the labour market.

Employers also have a role and they can—and should—do more to help women to progress in the workplace. We suggest that more progress can be made by looking at issues such as flexible working, particularly at senior levels within an organisation. We should look at things such as leadership training for women, and performance training for line managers in some cases, to ensure that there is no bias. We should also look at things such as networking and mentoring schemes that help women progress in the workplace. Companies all have different challenges, and they need to be able to find the solutions that work for them and deliver real progress.

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David Taylor (North West Leicestershire, Labour)

Continuing the theme of gender pay audits and equal pay, I will call Lynne Featherstone, followed by Nia Griffith, Tim Boswell and Sandra Osborne.

Q 158

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Lynne Featherstone (Hornsey and Wood Green, Liberal Democrat)

I have one question each for Sarah and Katja. Last night I sat for two hours at the meeting of Unison and the Fawcett Society. The room was full, and every person who spoke said that the most important thing in the workplace was to have mandatory pay audits, yet they have been left out of the Bill. I wonder what Sarah thinks are the effects on women’s poverty in perpetuity if we cannot amend the Bill and include the audits.

Sarah Veale: It would be regrettable if the Bill was not an opportunity to introduce mandatory pay audits. We in the TUC have never said that they are a panacea or that they alone will solve the problem, but you will not be able to identify unequal pay until you carry out systemic monitoring to find out where and why the discrimination is taking place, and then hopefully work out workplace solutions for addressing it.

We have had years and years of reviews—equal pay has been reviewed more times than anything else. The Equal Opportunities Commission has done it, and we have had the Kingsmill review and the women and work commission. They have all said that it is essential to have pay auditing if you are going to crack the problem. However, the trouble is that they have all shied away from making it compulsory.

With the greatest respect to Katja, employers are simply not doing it enough. There are some who are doing it, admirably, who have found that it is not the problem that they thought it was going to be and that it has delivered huge benefits. However, there is a hard core in the private sector—the public sector is different—that simply will not do it. Until it is done, we will not be able to crack the problem, which is why the TUC has been adamant about pushing that point. I would add, however, that we do not think that that  alone will solve the problem, and I agree with the proposition that there are a number of other extraneous factors, but you must do that, and again we urge the Government to do so.

Q 159

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Lynne Featherstone (Hornsey and Wood Green, Liberal Democrat)

It seems pretty much central to me, and we have seen that with exposure, publication and comparison—when people can see what is happening—you get it dealt with. That is the case in point.

Katja, we have met, and I have talked to the CBI, so we know where you are coming from: you do not think that that is the answer. Cost and the recession are often brought into the equation whenever this discussion occurs. The Government have said that this will be voluntary until 2013, which is, without question, four years too late. Two quarters of downward growth in returns signifies a recession. Would the CBI think that it would be a good move if I tabled an amendment to say that there should be two consecutive quarters of growth to signify the start of mandatory pay audits, so they would begin in either 2013 or after two quarters of growth—whichever came earlier?

Katja Hall: No, because mandatory pay audits would be the answer only if the main cause of the pay gap was discrimination between men and women doing the same job.

Q 160

Katja Hall: We know that that is not the main cause based on the women and work commission report and other research. Nobody has been able to establish that it is a factor, or how much of a factor it is. I am not aware of any research suggesting that that is the main cause of the pay gap.

There is a place for pay audits; many companies choose to do them on a voluntary basis. We survey our members on the issue every year, and we know that more than 50 per cent. of large firms now undertake voluntary pay audits, and they do so as part of their package on diversity in the workplace. Many of them find that useful. However, we also know that, in the vast majority of cases, when they find a pay gap, it is not between men and women doing the same job. We need to be realistic here: the audits are expensive, time consuming and bureaucratic. For a company with limited resources, there are often better and more effective ways of spending money than on a pay audit.

Q 161

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Lynne Featherstone (Hornsey and Wood Green, Liberal Democrat)

In terms of equal pay for equal work, in many companies the jobs of women are not the highest paid, and nor do women reach the highest end of the grade. There is discrimination that is about not equal pay for equal work, but what jobs are actually available to women. We cannot see that without exposure of the whole range.

Katja Hall: I do not think you can say that the fact that not enough women are in senior jobs in the United Kingdom is to do with employer discrimination. If you want to look at getting more women into senior positions, I suggest that you might need to look at participation levels within different organisations because pay levels would not give that information. If you want more women at senior levels, I still think that one of the best things to do is to encourage companies to offer more flexibility in senior jobs.

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Lynne Featherstone (Hornsey and Wood Green, Liberal Democrat)

I am certainly not saying that there are not other issues.

Q 162

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Nia Griffith (Llanelli, Labour)

I am picking up a certain degree of negativity from the representatives from the CBI and the FSB about a form of compulsory pay audit. What sort of reporting would you regard as helpful for identifying pay gaps? Will you ask yourselves whether you really are an organisation that takes diversity and equality seriously? Most importantly, if you do not have some form of reporting, how do you measure progress?

Stephen Alambritis: With regard to the smaller business centres, I have intimated that the boss or employer—increasingly the female boss or the female employer—in the new archetype has females over 35 as employees. Increasingly, that person knows exactly who gets paid what, and good employers who want a good reputation and to access local authority and public sector contracts will do all that they can, and will probably have in place a structure through which everyone is paid equally. We worked with the Equal Opportunities Commission, as it was then, on equal pay toolkits for small employers, which worked very well. We are relaxed and content about the threshold and the acknowledgment that, for smaller employers, it is best to vouchsafe them before bringing them on to a regulatory element, so that they are free to employ more people.

One way forward could be to talk to the major audit industries and the Institute of Chartered Accountants to see whether they can provide a solution. The large companies—the CBI members—are audited annually by those in the industry. As for whether the audit on equal pay can be carried out at a reasonable rate, the audit industry should look at the cost argument.

Q 163

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Nia Griffith (Llanelli, Labour)

The point of reporting is to communicate something from one person or body to another. I am not sure how your knowledge of this, that and the other, regarding a particular member of your organisation, can rely on a descriptive method of saying what is going on, rather than arising from something that is easy to see and analyse.

Stephen Alambritis: Well, 3 million self-employed people do not need audits—they do not have audits as such. We are talking about 1 million companies doing statutory audits. As for including businesses that do not have fiscal audits anyway in another audit, that would have a fairly regulatory impact. We approve of the exemption and the voluntary elements. If all that does not work, it is obviously up to the Government to think about whether there should be a mandatory element. I refer you to the equal pay toolkit that was devised by the EOC along with the Federation of Small Businesses, which was a solution to our members, and to think along those lines. The Equality and Human Rights Commission might be one way forward to get the message out.

Q 164

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Nia Griffith (Llanelli, Labour)

So you would be encouraging your members to look at ways of reporting.

Stephen Alambritis: To make sure that there are things out there that can help them to double check that they are paying equally. When asked the question,  the vast majority of my members do pay equally. They are so small—with five staff—they would pay equally, and I cannot see how they would not. In a small firm where everyone knows everyone else, if you pay unequally, the resentment that is bred, as well as the employment tribunal prospects, are horrendous for small employers.

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Nia Griffith (Llanelli, Labour)

I am still unclear about how we communicate that in the small print.

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David Taylor (North West Leicestershire, Labour)

Does anyone else want to come in?

Katja Hall: Of course, there is a trade-off between a simple metric figure, which would be easy to compare across organisations but would risk being meaningless if taken out of context, and a more descriptive or narrative form of reporting that might be more meaningful, but would not be as easy to compare. Where the CBI and most of our members come from on this issue is about what we need to do. Of course we need to encourage greater transparency, and of course companies need to have some idea of where they are in order to know where they want to get to, but where we would like to start is by finding out what works. I do not think that we have a clear idea at the moment about what companies are doing out there, and about what they find works and delivers progress. We know of companies that monitored for years and years and made very little progress, but then they introduced staff surveys and tracked the satisfaction rates of different groups of employees, which has enabled them to make real progress. For them, that has been a much more meaningful way of reporting—or whatever you want to call it.

In the first instance, we would like to find out what works and what does not. We would see us—the CBI—as having a role in gathering that information. On that basis, we think that there could be merit in developing, in a sense, a basket of indicators that companies could pick and choose from when it comes to transparency. That might be an equal pay figure, but it might be such things as female levels of participation, participation of women at different levels within the organisation, take-up of flexible working and possibly even child care—there is a range of indicators. What works in one company and is meaningful in one company would not necessarily be meaningful in another company. However, if companies first find out what works, then we spread that message of good practice and, thirdly, give employers the tools from which to pick and choose, we think that real progress could be made.

Q 165

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Tim Boswell (Daventry, Conservative)

I would like to ask Sarah Veale—others may want to contribute—a little more about part-time workers. My first question is a sort of technical one, which is whether the threshold would pose greater problems for employers who typically have a large part-time or fluctuating work force. I think you are nodding, but is that at least a potential—that setting a threshold for audit might create difficulty?

Sarah Veale: It is clearly much more difficult if you have a work force that is peripatetic or working various or different types of hours.

Sarah Veale: It would be more expensive but, again, the costs are initial. Once you have worked out the metrics and whatever, I do not see that it would be any more complicated. Employing part-time workers often gives employers a greater degree of flexibility and there is nothing wrong with that at all, but that greater degree of flexibility sometimes comes with more demanding administrative costs.

Q 166

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Tim Boswell (Daventry, Conservative)

Thank you. I wanted to touch on the question of the discrimination that may or may not be inherent in part-time work. My suspicion would be that there is a structural imbalance between part-time employees and full-time employees—in terms of their remuneration—that is gender neutral. Secondly, there may well be an indirect form of discrimination, because females tend to occupy more of the part-time positions. There are two factors operating, both of which in a sense are discrimination, but one of which is not particularly inherent in the Equality Bill—it may be, but in a different way, and it is not gender discrimination. Would you see that as a reasonable interpretation? Do you think that you can differentiate the factors arising from gender discrimination from what I might call structural discrimination—by the nature of whether the employment is full-time or part-time?

Sarah Veale: One of the problems with the law is that disentangling the two is difficult, because of how equal value is done. The problem with part-time work is that the question may not simply be one of possible indirect discrimination in the workplace. A lot results from people’s lives outside work and the reasons why people work part-time. The reason why more women work part-time is that they still tend to be the prime carer at home.

Q 167

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Tim Boswell (Daventry, Conservative)

There could also be people with a mental health condition, for example, or a disability.

Sarah Veale: Absolutely, or older people who want to phase themselves out of the workplace and do two or three years part-time as they go. You would have to differentiate and weigh in some of those factors. I do not think that makes the operation undoable, but as I was saying earlier, it makes it slightly more complex. Certainly, the TUC has always highly encouraged part-time work, but the problem with it is that employers, and often society, do not value it in the same way as full-time work, even if the person is doing exactly the same as their full-time equivalent.

We know of examples of job-share schemes where employers have taken on two or three part-time workers to do a full-time job. If it is managed well, you get huge benefits. You get one and a half times what you would get from one person. Good managers will appreciate how to deal with what are often societal demands for a more flexible approach to how people do their job. I do not know whether that helps. The trouble is that equal pay law is not really being touched in the Bill. It is immensely complicated—more complicated than the laws affecting discrimination against part-time workers, which are a separate but linked issue—and probably a lot more work needs to be done on it.

Q 168

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Sandra Osborne (Ayr, Carrick and Cumnock, Labour)

The legislation to date has not provided the remedy that it should have provided after such a long period, and there are all sorts of other complications that have been discussed, on which progress has also not been made. It is also difficult for individuals to seek redress in the current circumstances. What are the panel’s feelings about the idea of representative actions, in which groups of people could take action at the tribunals? Would that make the system more efficient and possibly even cheaper? Would it provide a better remedy for individuals and a more positive way forward?

Sarah Veale: Do you want me to start? That is one of the TUC’s propositions, although I am obviously very interested to hear what everyone else thinks. We put it forward because, particularly with the large multiple cases and specifically on equal pay, the current system does not allow you to group together very efficiently the common points of law that exist across a grade of staff against whom you are alleging indirect gender pay discrimination. The joy of representative actions would be that an organisation such as a trade union, or maybe a citizens advice bureau, could be given a locus to identify the key legal issues and run a representative test case, if you like, to which all the individual women would have to sign up.

Our view is that that would enormously expedite litigation. At the moment, we have cases where women make a submission and, after it has gone through the various appellate stages, it is not finally resolved for 11 or 12 years. One of our unions told us that, tragically, one or two of the women they represented died before receiving the benefits of the compensation that they were owed. Clearly, anything that expedites the process would be enormously helpful, so we have put that forward. We are grateful to the Ministry of Justice for looking into the issue and seeing what might be done.

I emphasise for the record that we are not talking about class actions. We are not talking about allowing members of the public to sign up willy-nilly to any cause that they might think affects them. The case would be specifically marshalled, and the locus would be given only to groups such as trade unions and perhaps the Equality and Human Rights Commission, which could do it expeditiously and curtail it, and not expose employers to wildcat litigation. We firmly recommend it—certainly to be looked at—as a means of helping the process work more efficiently and much more cheaply.

Katja Hall: This is an issue where the CBI and the TUC disagree quite strongly. We think that it is a myth that representative actions would somehow streamline the system and facilitate the progress of such claims. Whatever system you have, you cannot avoid looking at each individual claim at some stage. The question really is whether you front-load or back-load it. Whatever system you have, you still have to assess the individual claims.

We think that under the current system there is already the ability to look at claims and group them together. We think that could be used much more widely to speed up the processes involved. We also need to be realistic about the other potential risks of representative action. Sarah helpfully says that the TUC is not pushing for class action, which is welcome,  but I am not sure that the line between the two is always that clear. We already know that employers—especially small firms—do not have much faith in the employment tribunal system. There is a real risk that representative action would lead to a more litigious society and greater pressure on employers to settle cases even when they are pretty sure that they would win.

Dianah Worman: We can go almost full circle because the process is back-loaded; it is a technique. Employers need to understand why it makes sense to look at the concept of total reward and how to better manage the pay bill. In that way they signal the fact that they are valuing their employees. Looking at flexible working and part-time working may, as a result of doing an audit, expose the fact that they are not valuing those people in the right way—they are not accessing bonuses and so on and so forth—and they are getting disparities. It would be much more effective to front-load and educate employers, give them the good practice guidance and build on the expertise we have had over the years, but expand that through the provisions that are allowed by the EHRC taking forward the guidance. That is critical. You cannot do this stuff unless you understand what to do. Simply being told that you have to do it in law is not the answer. I am afraid that we have to spend a lot more time investing in helping people to understand why the proposal is sensible. That is why it makes sense to push the concept of the business case for diversity so people get the message and their mindsets switch and they begin to drive the agenda in a much more proactive way.

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David Taylor (North West Leicestershire, Labour)

Thank you very much. We will have a very brief interjection by Stephen Alambritis, then we will move to Evan Harris. I should then like us to move on to some of the other matters that need to be addressed.

Stephen Alambritis: My members want access to justice themselves. They get free legal advice on employment issues from the FSB. If they take any action in contravention to that advice, we will not support them in the run-up to an employment tribunal. Likewise, staff deserve access to justice. I think that in the early ’90s, there were 30,000 employment tribunal cases and the latest statistics show something like 200,000, so there is an increasing tendency for employment disputes to end up at employment tribunals. What we do not want is vexatious applications that undermine the confidence of employers, both large and small, in the employment tribunal system. Some years ago—about four or five years—we helped one of our members through an employment tribunal case. The judge awarded £10,000, which is the highest that can be awarded, against the worker because it was so vexatious and litigious. We need to ensure that it is a fair system. Behind all those stats, there are the areas to which Katja referred where there is an agreement to close the case even though the employer is fully justified in carrying on. We need to get that balance right. We need access to fair justice for both sides.

Q 169

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

I just want briefly to clarify the CBI’s position because I do not want it to be misunderstood. Hopefully, these questions can be answered quite quickly. Do you accept that there is a pay gap between men and women at the moment that is unacceptable—for whatever reason?

Katja Hall: Yes.

Q 170

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

Okay. I think that you have accepted that part of that gap, even if you do not think that it is the main part, is due to illegal, gender-based pay discrimination—on average; not in every company.

Katja Hall: A very small part.

Q 171

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

Is your problem, therefore, that you do not think that pay audits will solve the problem of dealing with this illegally caused and unacceptable gap, or is it that you think that it is at too high a price, or both?

Katja Hall: We think that if an employer is discriminating, it is unacceptable. We have a strong legislative framework in place with uncapped compensation so that the employee can seek redress. But if you want to make real progress on the pay gap, pay audits would be barking up the wrong tree.

Q 172

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

So you do not think that they would be effective? What evidence can you cite that the existing law, and/or the practices of leadership programmes about which you have talked have made a significant difference to reducing the pay gap? It may have kept it the same—it has not got wider thanks to all these little initiatives—but what evidence can you cite me, with a reference, that suggests that our existing legislation is dealing with the problem of the last 40 years?

Katja Hall: I think that I am right in saying that in 1970 the pay gap was 37 per cent., and it is now 13 per cent. if you look at median earnings. So clearly, the pay gap is shrinking, but it is not shrinking by as much as we would like and progress is not as quick as we would like. But to say that there has not been progress would not be true.

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

Sarah Veale, is that your view?

Sarah Veale: I dispute those figures. I think that the gender pay gap has been somewhat underestimated there, so I disagree quite strongly. The fact of the matter is that it has been stubbornly stark on what is a much higher figure for part-time workers, which, by the way, is nearer to 40 per cent. I do not think that indicates that 40 years of a piece of legislation has worked on a voluntary basis and with a few employers being kicked willy-nilly into the tribunals.

I think that there is a problem with the individual basis of the law. You need more collective solutions, but it is not working. Any other piece of law that had not been working for 40 years would be a cause of national outrage. It is illegal to discriminate, yet it is happening.

Q 173

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

So all you can give me, Ms Hall, are some contentious figures to show that what we have at the moment is good enough. I am asking you for a  reference to some academic work that shows that what we have at the moment—the current legal structure and practices—is solving the problem, and that we will eliminate the unacceptable pay gap, which we both accept, in five years’ time. Help me, please.

Katja Hall: The figures compare the median earnings of full-time and part-time employees. There is nothing wrong with them. You may choose a different figure, for example, looking at only full-time or only part-time. You may choose the mean instead of the median, but there is nothing wrong with the figure itself.

As to why there has not been more progress, to know that, we need to understand the causes. As we have already discussed, they are complex—they have to do with our education system, with child care, women’s experience in the workplace and things such as flexible working.

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

I do not want you to repeat everything that you have said.

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David Taylor (North West Leicestershire, Labour)

Thank you. Can I just say to colleagues and witnesses that I would like to move on to other matters at 12.15 pm, because there are other issues to be explored. I have just called an Opposition Member, so I will now call Vera Baird and then John Howell. It would be helpful if both questioners and witnesses could tailor their remarks accordingly.

Q 174

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Vera Baird (Solicitor General, Attorney General's Office; Redcar, Labour)

Can I ask three quick questions? First, Katja, do you accept that equality and diversity are good for business, and not its enemies? Stephen and I are assuming that you do, because of what you said. Let me ask that of you as well, Dianah. You have made the position clear.

Secondly, you have talked a lot about direct discrimination and how small you think it is. Indirect discrimination can only really be disclosed by transparency, which requires some process to reach. Perhaps we are talking not about culpable employers, but about employers who do not know that they are paying unequally because of some historic system—they have never gone through it and done it in a systematic way. Do you agree?

Thirdly, you were looking, a short time ago, at what you think would work for businesses in terms of improving gender equality more broadly, but particularly the gender pay gap. You were talking about a quest for a basket of indicators, which would inevitably include pay. That is a good proposition, is it not? That, I think is what the Equality and Human Rights Commission is going to be asking the CBI to join in doing with the TUC, precisely to look for those indicators. That can fit on some metrics, and we can properly measure pay disparity—we seem to be allied there about that—but do you agree further that what is really important is that that should be done, and then everybody should be asked, however involuntarily it is put to them, to comply with disclosing those measures? That way, we can see, even if it has to be done differently sector by sector, what companies A to Z are doing about their pay. The point, surely, would be to get those metrics worked out between employers and employees as a group, and then move it into all of your sectors. Would you take responsibility, as the CBI, for driving that disclosure through all your businesses?

Katja Hall: Yes, of course I agree that equality and diversity make good business sense and are important. Not only does it enable employers to recruit from the widest possible pool of employees, but we know that employers need to respond and serve the customers of the markets in which they operate, and to do that effectively, their workplaces must be diverse.

On your question about indirect discrimination, I think that it is important that companies continually look at their pay systems. There are a lot of ways of doing that. We talk to members every day about the different ways in which they look at their pay systems and make sure that there is not bias within them. It is not just to do with different jobs and whether people are paid the same. It is to do with things such as starting salaries, women taking time out of the labour market, and, if you have an incremental pay scale, making sure that women do not fall behind because of that. Of course companies need to assess their pay systems and make sure that they are fair. On your question about disclosure and transparency, the CBI would definitely be keen to be involved in an exercise that shows the different ways in which meaningful progress can be made to tackle the pay gap.

Q 175

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Vera Baird (Solicitor General, Attorney General's Office; Redcar, Labour)

I just wondered about the answer to the third question. Will the CBI take responsibility once the metrics are worked out with the rest of it for driving the requirement through its membership to comply with disclosing those metrics?

Katja Hall: We would absolutely encourage our employers to use it if we come up with a system that works, but I have to be equally clear that we do not support a legislative solution in this area.

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David Taylor (North West Leicestershire, Labour)

I have had expressions of interest from colleagues in asking questions about contract workers, agency workers, disability and positive action. I do not know what John Howell wants to raise, but he has been waiting patiently.

Q 176

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John Howell (Henley, Conservative)

I would like to move on to a couple of questions relating to age discrimination. The first one relates to issues around the mandatory retirement age. My first question is about attitudes towards that and whether you think that will help. The second is to try to get a sense of where you see the balance in terms of helping to end age discrimination. Is abolishing or decreasing the mandatory retirement age going to achieve more compared with a lot of other measures that can be introduced to encourage employment for people in the 50 to 69-year-old bracket?

Stephen Alambritis: The FSB is of the firm view that there is no justification for any employer to discriminate on grounds of age. Employers look to the Government to set an age for retirement that would focus everyone’s minds. Small employers, in particular, do not have the resources to try to decide a way through what should be the retirement age of their staff, so a retirement age decided by the Government is a focal point for small employers in particular. If one of our members has a member of staff who is valuable, loyal and productive, and there is a strong relationship with the business, they would strive to do all that they  could to keep that member of staff on. We do not see any element of age discrimination as a huge problem within the small business sector.

Q 177

Katja Hall: We supported the age discrimination legislation when it was introduced. We believe that it is right to have a default retirement age. We supported the right to request postponement of retirement. That system is working well. It is encouraging employers and employees to have a discussion about retirement. Based on survey evidence that we have conducted, the vast majority of the requests are accepted. As far as we are concerned, the current system is working well at the moment. We have accepted, though, that the Government are committed to reviewing it in 2011 and we will respond to that review, but we do not think that it would be right to get rid of the default retirement age altogether.

Q 178

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John Howell (Henley, Conservative)

I think I saw the TUC representative shaking her head.

Sarah Veale: We have been around this course a few times with the CBI. We find it very strange that you have a piece of anti-discrimination legislation that has sitting within it almost a green light to discriminate. The good employers will know how to manage retirement properly. If you retain a mandatory retirement age, it allows sloppy practices and it does not make employers think carefully about whether the individuals are actually fit and capable and want to carry on. The CBI has its evidence. We have evidence that suggests that the meeting that you can have with the employer to discuss these things is very weak. The employer is not obliged to give any response whatever. The absence of complaints simply means that there is not a process for putting those complaints through. We at the TUC would encourage genuine flexibility of retirement, bearing in mind people’s access to their pension schemes. That is another issue—some people cannot afford to retire early while others might want to do so for all sorts of different reasons. It is a complex issue, and we welcome the review that will take place and will submit our views. We feel that this provision must be taken out of the system, as it is inherently wrong to allow for discrimination within anti-discrimination legislation on such weak grounds.

Dianah Worman: We never really supported the default retirement age, which we felt was a compromise when it was introduced. There is no real reason to have an end point and a mandatory retirement age. Many organisations have abandoned mandatory retirement, and there are strong arguments at national, organisational and individual levels for having a more open-ended situation. If people can and want to work for longer, and are able deliver value to an employer, they should have the opportunity to do that. If the employer wants to carry on working with someone, why set up a system that stops them from doing that without jumping through unnecessary hoops?

This is not only a UK issue. Changing demographics are affecting countries around the world and we must change our mindset about when retirement might be. Do we need to revisit the concept of retirement? Many people are living longer, healthier lives and are still fit.  The concept of being 60 today is more like being 50 or 40—people feel a lot younger than they used to 10 or 20 years ago.

Having an end point does not make sense. The problem is that people do not like dealing with difficult situations and managing people. That goes back to the crux of the argument about good people management, which has been behind all the conversation we have had today. If we were better at managing people—and we have lots of advice and guidance on how to do that better—we would not have the difficulty of needing to set up a legal framework that makes it more difficult to retain the talent we need. We must ensure that we can manage the talent pipeline better, both at the younger and older ends, or businesses will miss out on the skills that are needed.

Q 179

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John Mason (Glasgow East, Scottish National Party)

I would like to press Dianah and Sarah on their answers. My gut feeling is that I like what you are saying, and I do not like people having to retire at a specific age. However, I wondered about the practical issues for an employer, especially a small employer, where there is no retirement age at all, be that 70, 80 or whatever. Suppose that somebody who has been a very good employee starts deteriorating a bit. Does that not put the employer in an impossible position?

Sarah Veale: There are measures you can take about that. If someone is genuinely not capable of doing a job any more, a good manager will know how to deal with that and, sadly, that person will have to go. That is not beyond any good manager’s capability. If there is a compulsory age, however, they do not have to think about it and can say, “Right, you have got to 65, off you go.” In fact, they should be having a conversation with that person, and if it turns out they are no longer capable, for all the acceptable, fair in law reasons, an employer can take the appropriate legal measures to deal with that. Employers should not be allowed to skip all those considerations, arbitrarily take a decision that someone has reached a magic age—as Dianah said, that does not really indicate anyone’s fitness or otherwise these days—and get rid of them willy-nilly.

Q 180

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John Mason (Glasgow East, Scottish National Party)

Would 70 or 75 be a compromise?

Sarah Veale: I do not think that there should be a mandatory age. Some 70-year-olds are perfectly able to carry on working for another five years and some 50-year-olds are not. It is not that easy. Humans are all different, and a good manager will get to know a person and make a decision based on what they do, what they have done and what they are likely to be able to do.

Q 181

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John Howell (Henley, Conservative)

I want to push the discussion on to a connected aspect of age discrimination that relates to goods, facilities and services. The insurance industry has made a big case for retaining age discrimination or age categorisation, and although I can understand some of the points that have been made, it does lead to pronounced difficulties, particularly for older people. I am thinking of some constituents of mine who are over 85. They have led a very active life and although insurance for travel is available, after having shopped around they find that having to pay £3,500 for  insurance to go to Australia is having a major effect on their lifestyle and ability to conduct what one would consider a normal life.

Nick Starling: Thank you for giving me the opportunity to demonstrate that I can actually speak. Age is an extremely important risk factor in insurance. It is vital that insurers can carry on differentiating by age. I wish to give two examples: an 18-year-old driver is 10 times more likely to be killed or seriously injured than most of the people in this room. Similarly, an average claim of a traveller aged more than 65 is about three and a half times the cost of that of people in this room. Age is an extremely important factor in pricing insurance, and it is important that insurers can continue to do that. You would think that there would only be a need for the Bill to act on age if the market were not working, and we think that it demonstrably is working. There is a wide availability of insurance for people of all ages.

Our concern is that, under the Bill, insurers would be required to “write across the range of ages, whatever their business model”. For example, they would have to offer a quote for an 18-year-old in a sports car and a 108-year-old, whatever the circumstances. The industry benefits from the fact that it is competitive. It has the ability to concentrate on particular market segments. Some insurers concentrate on older travellers, some insurers concentrate on backpackers and there are insurers who offer lifestyle pension products and so forth. The fundamental basis for insurance needs to continue.

We recognise the difficulty of access to insurance, particularly for older people, and that is one thing that we are keen to address. I cannot comment on Mr. Howell’s particular constituency problems. I suspect that there are issues other than age involved in that sort of premium. The issue is that of enabling people to access the insurance that we know is out there, rather than forcing insurers to offer particular products in particular circumstances.

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David Taylor (North West Leicestershire, Labour)

Thank you. Whenever witnesses want to come in, please indicate and, subject to the constraints of time, I will always try to include people. We should now move on to the subject of contract workers and agency workers. I call Jim Sheridan.

Q 182

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Jim Sheridan (Paisley and Renfrewshire North, Labour)

Unfortunately, there has been a growth in the use and exploitation of temporary agency workers across all disciplines, all workplaces and of both genders. Those temporary agency workers are discriminated against in the sense that they have lower terms and conditions, pensions, holidays and everything else. Part 5 of the Bill seeks to deal with part of the problem. I wonder whether it addresses the concerns from the perspective of the TUC and employers. Does it comply with the EU directives?

Katja Hall: Can I make a general observation on the issue? We dispute that temporary and agency workers are discriminated against. We need to be clear about what we are comparing. Agency workers are not employees of the user company in which they may be placed. Their relationship is with the agency for which they work. They are covered by the vast majority of employment  legislation in the United Kingdom—the minimum wage, working-time regulations and health and safety regulations. We now have, of course, consultation on the implementation of the agency workers directive, which will introduce further protections in that area. We do not agree that agency workers or temporary workers are being discriminated against.

Sarah Veale: I think that we probably disagree. Consultation is going on, and we are talking to the CBI and others. The problem is for the agency workers themselves who are not as protected—I respectfully suggest—as the CBI thinks. They do not have contractual status, so a lot of employment law does not apply to them, and they are discriminated against on that basis.

The other impact is that employers often use agency workers to substitute for a full-time person, who would get full protection. We shall have to wait to see what happens with the agency work regulations, which the TUC very much welcomes. The trouble is that, unless you get a very strong comparator basis and you can do proper comparisons between the terms and conditions on which you employ the permanent workers and those on which the agency workers are contracted to supply their labour, you have an inherent built-in inequality, so I can see exactly where you are coming from on that. In a sense, it is another area of discrimination that I know is being dealt with elsewhere, but it often locks in and meshes with the elements of discrimination covered in the Bill.

I hope, as the CBI no doubt does, that we can do something together constructively to make the position of agency workers much better in the UK. That remains to be seen. I do not doubt the will of the Government to do something, but it is a tricky area, because we have a two-tier employment market in the UK, which employers choose to stick with because they benefit from it. The TUC has spent a lot of time disputing whether it is fair and equitable to have some people working as workers and not employees, with no protection, while others are in a completely different position. The position is rather arbitrary and random, but that is probably a bigger question than the context of the Bill. I hope that that helps.

Q 183

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Jim Sheridan (Paisley and Renfrewshire North, Labour)

I am absolutely amazed that the CBI is saying that temporary agency workers are not discriminated against, because I see it every day of my life. Some 700 agency workers at Hewlett-Packard have just been made redundant simply because it is easier to make them redundant, so I would like to see the evidence that suggests that agency workers are not discriminated against.

Katja Hall: I cannot comment on the particular—

Q 184

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Jim Sheridan (Paisley and Renfrewshire North, Labour)

What is the incentive for an employer to take on agency workers?

Katja Hall: Because of the greater flexibility that those workers offer. May I check whether those workers were made redundant because the assignment with the user company ended, or because they were no longer contracted through the employment agency? There is misunderstanding, but they are not the employees of the user company.

Q 185

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Jim Sheridan (Paisley and Renfrewshire North, Labour)

That is a technical term.

Katja Hall: We know from other cases that if the assignment ends, they can go and work elsewhere—they will be placed elsewhere. If they are employees of the agency and they have been with that agency for two years or more and they no longer work and are made redundant, they will, of course, be entitled to a redundancy payment, but they are not the employees of the user company.

Sarah Veale: That is the point. If they are not the employees of the user company and they are agency workers, they do not get redundancy pay. They do not get anything—they can just be dismissed without any pay whatsoever.

Q 186

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Jim Sheridan (Paisley and Renfrewshire North, Labour)

To suggest that those people are not discriminated against is incredible.

Katja Hall: Could I also make a more fundamental point? The reason why the UK has a lower unemployment rate than most of the rest of Europe is because of our flexible labour market. We consider agency workers to be a key part of that. The truth is that we still, even now, have a lower unemployment rate than a lot of our European competitors. So, the question is not whether those agency workers in other countries would have had a permanent job or an agency contract, but whether they would have had a job at all.

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David Taylor (North West Leicestershire, Labour)

Thank you. Does any other Member want to come in on this subject? No, in that case, we will move on to disability.

Q 187

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Mark Harper (Shadow Minister, Work & Pensions; Forest of Dean, Conservative)

I have a brief question for everyone. When making recruitment decisions, employers are allowed to use pre-employment questionnaires to ask a range of health and disability-related questions of people whom they plan to hire. We have been urged to include within the Bill amendments to prohibit the use of such pre-employment questionnaires, although employers would still retain, as they do in the United States, the ability to withdraw a job offer, if the potential employee disclosed information that made them unable to perform the role, but that withdrawal would have to be on good grounds. Would any of you, particularly the business organisations, have any problems if such an amendment were tabled and accepted? Katja, will you answer first?

Katja Hall: Most of our members would be relaxed about such an amendment. Increasingly, companies do not rely on pre-employment questionnaires and, in fact, when they ask about the health of the individual, it is at the point when they are offering a job. We need to make sure that there are not particular jobs where health and safety issues are of particular concern, where there may be a case for using pre-employment questionnaires, but, subject to that, I do not think that it is something our members would have a big problem with.

Stephen Alambritis: There is no evidence of the wide-scale use of pre-employment questionnaires within the small firm sector. As a former disability rights commissioner, I have taken soundings with members, who want to employ the best person for the job. We would have no qualms about an amendment along those lines.

Dianah Worman: We certainly think that screening should be post-offer to check that everything is okay for the reasons that Stephen has mentioned.

Sarah Veale: I agree with that, you will be delighted to know. There is consensus on that.

Nick Starling: It is not a direct answer to that point, but insurers discriminate on the basis of disability. It is essentially just a matter of whether any particular issues arise from, for example, adapted vehicles and so forth. That could arise in an employment context as well.

Q 188

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Jim Sheridan (Paisley and Renfrewshire North, Labour)

Before asking this question, I want to make sure that I have the right person. Are you the Mr. Starling who received a prestigious award for the work that you did in denying compensation to people with pleural plaques?

Nick Starling: Am I obliged to answer that question? The Association of British Insurers has a very strong position on pleural plaques, which is that they are not an illness and therefore do not merit compensation. But I am Mr. Starling of the Association of British Insurers, yes.

Q 189

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Jim Sheridan (Paisley and Renfrewshire North, Labour)

I would like to establish whether you are the Mr. Starling who got an award for the work that you did in denying people compensation.

Nick Starling: I have not received any award, other than my salary from the Association of British Insurers.

Q 190

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Jim Sheridan (Paisley and Renfrewshire North, Labour)

The question that I want to ask is, given the work that the insurance industry has done in denying people compensation for pleural plaques, there is a significant school of thought that suggests when you are diagnosed with that illness, you are disabled. Certainly, if it develops into full blown mesothelioma, you are disabled—if not dead. Given that, I want the insurance industry to clarify whether the measures in the Bill will assist it in denying people who have been diagnosed with mesothelioma or pleural plaques proper compensation.

Nick Starling: I do not think that the Bill has any relevance at all to paying compensation for illness or injury derived from the workplace. I do not believe that there is any link here at all with that sort of issue and I do not fully understand the reason behind the question.

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David Taylor (North West Leicestershire, Labour)

I allowed the question, Mr. Starling, because the issue that we are covering is that of disability. It seems to me that the question is clearly within that category, and for that reason I allowed it. However, you are, of course, at liberty to answer as fully, as comprehensively or, indeed, as briefly as you think appropriate.

Nick Starling: If you wished to buy health-related insurance and had mesothelioma, clearly that would be an issue. You would not be able to obtain cover for that for understandable reasons. If you have pleural plaques, that is an indication of exposure to asbestos and would be part of any risk assessment, but it is not directly related to the provisions in the Bill, as I understand them.

Q 191

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Jim Sheridan (Paisley and Renfrewshire North, Labour)

You said that you do not discriminate against people with disabilities. Do you recognise that mesothelioma is a disability?

Nick Starling: No. My understanding is that having a disability relates to people who have a long-term disability  that they might be born with or develop. Mesothelioma is an illness. Unfortunately it is a fatal illness, and it is dealt with by insurers in that context.

Q 192

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Jim Sheridan (Paisley and Renfrewshire North, Labour)

So you discriminate against people with mesothelioma.

Nick Starling: If you have mesothelioma, clearly it is a very serious cancer and there would be circumstances in which it would be difficult to get particular sorts of insurance, because they are health related and you would not be able to get them.

Q 193

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Mark Harper (Shadow Minister, Work & Pensions; Forest of Dean, Conservative)

May I come in briefly on this, because it illustrates whether we are correct in using the word “discrimination”? On Mr. Sheridan’s point, if you have a terminal illness and you know that you have it, clearly you are not going to be able to take out a life insurance policy. That is straightforward and, particularly in relation to age and other types of discrimination, it goes to the heart of what discrimination means. Clearly, an insurer has to have a range of facts at their disposal to price the risk appropriately, and the extent to which you can price the risk appropriately is an issue raised by the Bill. If you cannot price the risk appropriately, will that mean that insurance is available to people? Will insurers then cease to write that business at all? Will you expand on the ability to price risk and particularly on the extension, which is around age?

Nick Starling: In insurance, some risks are extremely difficult to price. As you say, if you have a terminal illness that might be one such risk in terms of life or health insurance when travelling abroad. Having said that, there are specialist providers that cover such risks or provide insurance that manages them. If you did not have that ability to manage risks, in some circumstances insurance would be almost impossible to buy across the piece.

In effect, if you have a disability, such as being wheelchair-bound, the risk is that the insurer’s price will be associated only with things such as special modifications to a vehicle and will not otherwise affect the way in which insurance is provided.

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David Taylor (North West Leicestershire, Labour)

Evan Harris wants to come in on the subject of positive action.

Q 194

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

I just want to ask members of the panel who have a view on the new provisions what their views are. If you have a strong view, now is your chance. I am happy to start with Stephen if he has a view on the provisions whereby positive action is allowed in making employment decisions between “equally qualified candidates”.

Stephen Alambritis: We do not have a strong view. We are relaxed and content with the intentions of the Bill on this. The chances of a small employer having in front of them two equally qualified candidates who are both suitably qualified are minuscule, whereas the consultants or recruiters used by a large firm would normally present it with two excellent candidates and leave it up to the employer to make the final decision.

Dianah Worman: We welcome this new tool in the kitbag for progressing diversity, but we do not see it being used very often. It could be used successfully only  by sophisticated organisations that can evidence why they are using this particular technique. It is more likely to be useful in situations in which you are recruiting a number of people, such as fast-track graduates, and you want people with certain kinds of talents and to develop certain opportunities. You might want to show that you need to choose more women than men or a greater proportion of people from minority ethnic groups to work towards a balanced work force. You would have to ensure that you evidenced why you were doing that. For example, you might have wanted to address an existing imbalance in your work force.

You would have to be sophisticated to use this technique successfully so that there is no backlash. There is a great deal of confusion about what positive action is. People only want to be appointed because they have merit in the first place. That has to stack up, but we need it in the kitbag.

Sarah Veale: I agree with that. I do not think that regulation is the right way to take positive action further. What the Government have done is very welcome, but other organisations such as the Chartered Institute of Personnel and Development and the Equality and Human Rights Commission have a big job to do in explaining what positive action means so that what Dianah has described can be put in place. It is much more complicated than looking simply at recruitment decisions. It goes far further than that. Much more guidance and help is needed.

Katja Hall: I agree with you on this issue. We would like to see many more employers use positive action to improve diversity in their work forces. We have some concern about how the clause is drafted. It could lead to legal uncertainty, which would make employers reluctant to use it. We would like to see tighter drafting of the clause.

Q 195

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Mark Harper (Shadow Minister, Work & Pensions; Forest of Dean, Conservative)

I want to pick up on one point that Dianah made. Dr. Harris’s question was specifically about clause 153, which is about recruitment and promotion decisions. My reading is that the explanatory note applies only to people who are equally qualified, whereas the language in the Bill—which we will probe in Committee—talks about people who are “as qualified”. That does not seem to be the same thing. The measure does not allow you to have a policy of discriminating in favour of particular people. It must be done on a case-by-case basis. I agree with the broad consensus that it will not be possible to use it very often. The chances of there being two equally qualified candidates are pretty slim. There must also be evidence that they are equally qualified. Given that—one or two of you have already picked this up—is this really the right way? If you look at clause 152, you will see that it focuses much more on the positive steps that employers can take to reach out into different groups that they perhaps do not recruit from. Is that a more productive way of approaching this matter than clause 153?

Dianah Worman: You need many different tools in the kitbag to make progress; you cannot depend on one. The discussion has gone back to good people-management practices. If you get your act together on that, you are less likely to have to introduce these techniques, but we need them all to make progress.

Katja Hall: A lot of the focus should be on the pre-recruitment stage in terms not only of encouraging people to apply to work in a particular company, but of  tailoring training to ensure that particular groups progress within the workplace. That is correct.

In terms of the drafting of the clause itself, we need to be clear what it refers to, but I am not sure that we are at the moment. We have some concerns. The explanatory notes and the clause are different, but we are also not entirely clear as to what “as qualified as” means in this context. Some of our legal members have been saying that it could be taken to mean just qualifications. We would like to see a much broader definition including experience and a reference along the lines of “‘as qualified as’ in the reasonable judgment of the employer”. Only with those caveats will we give employers the confidence to use the power. Otherwise, it will be a missed opportunity.

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David Taylor (North West Leicestershire, Labour)

We have less than 14 minutes to go. I am going to call Vera Baird and then John Penrose.

Q 196

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Vera Baird (Solicitor General, Attorney General's Office; Redcar, Labour)

On the same point about positive action, my understanding from conversations with some business organisations is that this kind of step is being taken now. For instance, if somebody wants to market something to a black and minority ethnic group, and if two sales people apply for the job, one of whom comes from the group, they would want to favour the person who comes from the group, given that they would be under-represented in the community of employees and that it would be appropriate and helpful for the marketing prospects of the business. If that happens now—it would be surprising if it did not and the evidence that we have garnered is that it does—the danger is that it would be discriminatory at the moment. Protection will come from this clause in this Bill.

Katja Hall: Basically, employers want certainty and clear parameters. That requires some redrafting of the Bill. We have not had a lot of feedback saying that employers are using it at the recruitment stage at the moment—obviously, there are different rules relating to disability. Employers want clarity above all and good practical guidance. We urge the EHRC to make that one of its top priorities and to give employers the confidence to use it.

Q 197

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Vera Baird (Solicitor General, Attorney General's Office; Redcar, Labour)

Forgive me for pressing, but I do not believe that you have answered my question. Leave disability out of it; it is not what I meant. I referred to race. It would be discriminatory to do what I have suggested happens at the moment in business, whether you have any experience of it or not. Will this clause give some protection to managers who wish to take steps of that kind?

Katja Hall: Yes. That is why we support the clause.

Stephen Alambritis: Yes, we agree as well. Employers have an eye to marketing and sales, and to getting the best possible deal and symmetry between their staff and customers, so actions would be taken, as they are today, that are positive about whom to employ. The positive action clause would help in that regard.

When debating amendments, we would put into the pot the use of the word “suitable” as well as “qualified”. A small firm would look at the suitability of the potential employee as well as at the strap line of whether they are “qualified”.

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Vera Baird (Solicitor General, Attorney General's Office; Redcar, Labour)

Thank you very much to both witnesses.

Sarah Veale: We completely agree with that. Guidance is essential and positive action is a very good thing. We support the clause.

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David Taylor (North West Leicestershire, Labour)

We have just more than 10 minutes to go. Do colleagues have further questions? If so, does someone want to indicate an interest?

Q 198

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Sandra Osborne (Ayr, Carrick and Cumnock, Labour)

Can I ask you about the public procurement provision in the Bill? Do you welcome it, and how do you think that it will be implemented? What would be the best way of implementing and monitoring it?

Katja Hall: We welcome the provision in the Bill. It is not particularly detailed, so we look forward to seeing the consultation document and the follow-up to that. We believe that procurement can be an effective lever, and our members support the general principle behind the clause. For the clause to be effective, we suggest that it needs to be focused on outcomes and not on processes or ticking boxes. It also needs to be relevant to the contract and to be sufficiently flexible to enable you to focus on different issues in different areas. So, for example, if you are delivering welfare-to-work services in Bradford, race may be a relevant factor. However, if you are contracting for stationery in Devon, race would probably not be a relevant factor. So the clause needs to be sufficiently flexible.

The only other point that I would make about procurement is that our members get quite frustrated about the inconsistency in approach. We would like to see much better guidance given to local authorities and public service organisations about what questions they should ask, what they should be looking out for and about how the bids are assessed. Certainly, the feedback that we have received is that there is a lot of inconsistency at the moment and employers do not quite know where they stand.

Stephen Alambritis: The key point in ensuring that the procurement process is good for everyone, including large and small firms, is simplification of the process. What we would seek, as we talk through the clause, is to use the principles of the Glover review, which looked at public procurement and sales, to see whether or not the clause can take advantage of that simplification of procurement processes. So, in dealing with the procurement aspects of the Equality Bill, we would be content if the Glover review recommendations were thought of as the Bill is being considered.

Q 199

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Vera Baird (Solicitor General, Attorney General's Office; Redcar, Labour)

May I pick up on Katja’s example? I am sorry; I am not deliberately directing all my questions at the CBI.

Katja, you talked about the difference between delivering welfare-to-work in a place where there is a large BME population, where you would have thought that procurement to assist equality and diversity is appropriate. By contrast, regarding the delivery of pencils in Devon, the suggestion is that it would not be thought appropriate. However, you would not want public authorities to procure stationery from a stationery manufacturer in Devon that had repeatedly broken equality law and that had been brought to the tribunal for being racist, sexist or for discriminating against disability, would you? So,  in that situation it would be relevant as to whether or not that company was included in the pool, would it not?

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David Taylor (North West Leicestershire, Labour)

Before the answer is given, I just want to say that I would like all four colleagues to get in and ask questions. Therefore, really pithy answers would be appreciated.

Katja Hall: If that company had been found repeatedly to have been discriminating, I think that it would be relevant. However, I think that we need to be careful not to penalise companies for a one-off mistake.

Q 200

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Vera Baird (Solicitor General, Attorney General's Office; Redcar, Labour)

It would have to be proportionate, would it not, to exclude them? However, that possibility of exclusion ought to be available.

Katja Hall: We would need to look at the detailed drafting. If the company were a repeat offender, then it might be relevant.

Q 201

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Vera Baird (Solicitor General, Attorney General's Office; Redcar, Labour)

“Relevant”? It would be a good reason to exclude that company. As a public authority, with your equality duty, you would not buy public services from somebody who paid black people less than white people, would you?

Sarah Veale: That is the key thing. The provision needs to be linked to the public sector duty; it is not there on its own. What the Government have done is extremely helpful in explaining how this could work.

Q 202

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John Penrose (Shadow Minister, Business, Enterprise and Regulatory Reform; Weston-Super-Mare, Conservative)

I want to pick up that precise point, and I particularly want to ask Stephen and Katja a question. If we are going to talk about “outcomes-focused duties”, which I think both of you have mentioned, the example that Vera just gave is quite important, because you would be most interested in obtaining the best value for money from your pencil supplier regardless of what that supplier had done, providing that it was operating within the law. If it had not operated within the law, it would have fallen foul of the law in some way.

I am interested in whether, if you believe in outcomes-based procurement, that alters the answer you gave the Minister just now.

Stephen Alambritis: I do not think that we should seek to reward bad employers through the procurement process. The award of a public sector contract is a huge plus and a huge bonus to firms, large and small. We believe that the award of public procurement contracts should be based on commercial grounds, but that the reputational aspect of the business should be taken into account by buyers and purchasers. We need to be mindful, as Katja has said, of the one-off offender, and I agree with Vera with regard to proportion. If a firm is continually known to be defying employment legislation, they are a bad employer and should not be rewarded with a public procurement contract.

Q 203

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Sharon Hodgson (Gateshead East and Washington West, Labour)

There will still be a provision in the Bill for a default retirement age or forced retirement at 65. You are probably aware that this issue is currently being considered by the High Court. Do you believe that this form of direct age discrimination is justified?

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David Taylor (North West Leicestershire, Labour)

We have discussed this issue.

Stephen Alambritis: Small employers are helped where the Government has an indicator of what the retirement age is. We would leave the retirement age up to the Government. But a small employer without a human resource or legal department is helped by an indicator.

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David Taylor (North West Leicestershire, Labour)

I have given a business voice a sentence or two, so I shall give the same to a trade union voice.

Sarah Veale: Just to repeat, we do not think that there is a justification for having a mandatory retirement age. We think employers should judge on the individual’s ability. It is contradictory to have within age discrimination laws a provision that specifically allows employers to discriminate purely on the grounds of age.

Q 204

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

I want briefly to ask the gentleman from the insurance industry a question. Do you recognise that there is concern that there might be discrimination against people who have genetic factors that put them at risk when it comes to getting fundamental insurance, such as life insurance associated with a mortgage, if the moratorium were to go?

Nick Starling: At the moment, there is a moratorium on genetic testing. It is an agreement between the Government and the insurance industry. I believe that it will last until 2014, but I will have to check that.

Q 205

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

So if it went—

Nick Starling: There is no question of its going at the moment. It is there, in place.

Q 206

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Evan Harris (Oxford West and Abingdon, Liberal Democrat)

After 2014, unless you can see the future, it might well not be there and the insurance industry would presumably want to stratify, because that is its job. Do you recognise that there is a risk—it may not be your problem, but it may be a public concern—that there would be an uninsurable group of people who therefore, essentially, could not get insurance because of their genetic characteristics?

Nick Starling: One of the reasons why we extended the moratorium to 2014 is because that is quite a long time away and we do not quite know what the position of genetic knowledge will be or what the situation would be if people could do their own genetic testing and find out about themselves. So we have extended it precisely because it is an uncertain future and an unknown situation. That is why we think that a moratorium, which the Department of Health and Ministers have agreed has worked well, is the best way forward. I do not want to speculate on what might happen by then, except to say that we have agreed that there has to be a lot of discussion leading up to 2014, based on the current science.

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David Taylor (North West Leicestershire, Labour)

Thank you.

I thank Stephen and Nick, Dianah, Sarah and Katja for their evidence.

Ordered, That further consideration of the Bill be now adjourned.—(The Solicitor-General.)

Adjourned till this day at Four o’clock.